Biggest kill of the year as feed conditions decline

Jon Condon, 29/05/2012


Eastern States beef processors notched up easily the largest weekly kill of the year last week, driven primarily by a big lift in supply as pasture conditions deteriorate following cold weather.

Every state recorded a rise in throughput last week, headlined by a big 11 percent lift in activity in Queensland, representing around half the nation’s tally.

Overall the Eastern States kill reported by the National Livestock Reporting Service reached 141,001 head, a 6.3 percent lift on the week previous.

Queensland’s kill was also a record for 2012, reaching 74,387 head, driven by a return to a holiday-free week and the resumption of work at Nippon Oakey after an earlier lengthy stoppage over industrial action.

In southern States last week, the NSW kill reached 33,156 head, up 1pc on the previous cycle, but still 9pc shy of this time last year. Victoria’s kill was +1pc on the previous week at 20,403 head, while South Australia was +14pc at 8142 head. Tasmania also lifted its kill 3pc to 4913 head.

Rainfall across the southern half of Queensland and well into NSW late last week had only negligible impact on cattle flows, although some saleyards were back in numbers. The fact it fell from Friday meant most supply arrangements for the week were already well in place. Some western sales on Monday this week were cancelled.

The rain continued over the weekend, with plenty of reports of 30-60mm giving young oats crops in many areas of Qld/NSW a much-needed drink, and promising to provide a good finishing resource for cattle at the back end of winter.   

Queensland processor livestock personnel yesterday indicated that they expect the large flow of winter-onset cattle to continue, and likely expand further heading into June.

An exception could be mixed cropping/grazing areas of NSW, where some producers might swap the saddle for the tractor seat, seeking to plant winter crop on last week’s rain. That could impact on cattle flows in NSW this week and next.

While many producers in cooler regions will have already made turnoff decisions in preparation for winter, especially with frosts impacting feed quality, the benefit from last week’s rain on winter crops and warmer regions still able to register pasture growth should be significant.

Southeast Queensland grid prices mostly showed a 5c decline across the board either mid-last week, or yesterday, following a fairly common 5c rise in value a week earlier due to rain.

SEQ prices quoted yesterday included four-tooth grassfed Jap ox 315-320c, milk tooth 325c, cows back to 290-295c. MSA steers also came back 5c, sitting at about 335-340c for grassfed at the top of the tree.  

Another rain influence forecast for later this week could throw a spanner in the works in supply terms for processors in Queensland and NSW.


Dollar impact

While the easing in the value of the dollar to its lowest level for 2012 has created an expectation that cattle prices may rise, international customers are anticipating the adjustment and are wanting to ‘share’ in the relief, after 18 months of being squeezed upwards by processors saying they need more, in A$ terms, for their product.

As can be seen on Beef Central’s currency value graph on the home page, the best aspect about the A$ presently is that while it has been in steady decline, its day-to-day performance has been relatively stable, with none of the jagged ‘sawtooth’ daily adjustments seen earlier in the year.

Similarly, while the 90CL grinding meat price into the US (again, see our home-page graph) is trending upwards again since the A$ slide, this is not yet being reflected in relatively higher cow prices.

The EYCI closed yesterday at 367.5c, 4c higher than a week earlier, but 26.75c below where it sat this time last year. Heavy steers averaged 3¢ lower than a week ago, at 174.8c while medium cows eased 1c to 125.8c.




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