Weekly kill slides further 7pc

Jon Condon, 19/07/2011


The weekly Eastern States cattle kill declined a further 7 percent last week due to earlier well-documented plant closures and sluggish international beef demand. 

The NLRS slaughter report issued yesterday afternoon for the week ended Friday, July 15 produced an adult kill figure of 121,199 head, down from 129,956 a week earlier.

The report covers the three major eastern beef producing states plus South Australia and Tasmania.

Queensland showed the least change of all states last week, but only because it’s big decline in slaughter throughput had already occurred a week previous, when it was down 11pc on earlier kills. Queensland’s tally for last week was 66,635 head, a modest 1pc rise on the week ended July 8.

There were consistent declines in all other states. The kill in New South Wales last week reached 34,014 head, down 9pc on the previous seven-day cycle. The decline was due to a ‘general easing’ in throughput numbers at most plants, rather than individual closures, NLRS personnel said yesterday.

Victoria’s kill also declined a further 2pc last week, to 16,650 head, while Tasmania was back 5pc to 3367.

South Australia was a special case last week, with an unusual decline of 91pc in weekly kill to just 533 head. This can be explained by the fact that the state’s two major export abattoirs were both shut for refurbishment and/or annual maintenance. Teys Brothers’ Naracoorte plant has been shut for two weeks due to a plant upgrade and general maintenance, while T&R Pastoral’s Murray Bridge plant was also closed for scheduled annual maintenance.

As one of Australia’s largest multi-species plants, the loss of T&R Murray Bridge last week was also clearly reflected in savage declines in SA’s sheep kill (down 65pc) and lamb kill (down 28pc). Murray Bridge is due to re-open on Tuesday this week, company sources said yesterday.

As reported on Beef Central earlier, JBS Australia’s Beef City grainfed plant near Toowoomba in southern Queensland yesterday ended its two-week closure due to adverse trading conditions for grainfed beef in Japan. While this will potentially lift Queensland’s kill tally for the current week in progress, other large abattoirs around the state and further south continue to skip shifts, to better match supply and demand.

Nippon’s Wingham plant in NSW will miss one or two days this week, company sources said, however the company’s large Oakey plant has yet to skip shifts, due to committed grainfed supply programs.

As a result it does not look like Queensland will go near its ‘full’ weekly kill of about 78,000 for some considerable time yet.

Processors continue to write disastrous losses on grainfed export cattle, and little better on grassfed export stock.

In a breakeven calculation published on Beef Central last week, it was shown that forward-contracted 100-day product closing-out on July 13 (going on feed in April as feeders worth 205c) carried a breakeven of about 400c/kg, which represented a breathtaking $285 per head loss to processors in today’s market, based on a current spot price of 325c. That figure, alone, demonstrated the extreme pain export processors handling grainfed product are currently experiencing.

“The recent temporary closures of grainfed plants will not change the pricing dynamic for grainfed beef one bit,” one processor said.

“The Japanese and other customers knew that those cattle were not going anywhere – they’re still in the feedlots, and are current for processing. We might not like it, but processors are probably paying the price for paying too much for forward-priced grainfed cattle five months ago,” the processor said.

The big build-up of meat in domestic cold storage as a result of the difficulty in selling meat into sluggish Japanese and US export markets was still weighing heavily on the overall trade. There was still a long way to go to reach supply/demand balance, a respected meat trader said this week.

Eastern states saleyard throughput at MLA's NLRS reported markets was back 17pc last week compared with a week earlier, and 10pc year-on-year, with turnoff consistently lower across all states.

Queensland saleyards numbers were back by 29pc – mainly due to numbers halving at Roma after a particularly large yarding the previous week. Throughput was consistently lower in NSW markets apart from CTLX, which resulted in an 8pc fall in supply. Victorian throughput was back, while supply across SA markets contracted by 32pc.

As reported in Beef Central on Friday, livestock producers and meatworks buyers are engaged in a stand-off, with neither party overly keen to trade cattle given the current market conditions and mixed demand signals. Flat demand in key export markets has seen processors and feedlots ease rates over the past six weeks, and these signals are motivating cattlemen to hold on to cattle where possible, waiting for the cycle to change.

  • The Eastern Young Cattle Indicator closed yesterday at 376.5c, up 1.5c from a week earlier.


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