Decline in beef kills continues across eastern states

Jon Condon, 20/08/2013

The recent handbrake on beef kills continues, with a further two percent decline in weekly throughput recorded by the National Livestock Reporting Service last week.

The Eastern state beef kill reached 144,359 head for the seven days ended Friday, about 3000 head lower than the week previous.

The result was the smallest ‘full-week’ (a seven-cycle not impact by a national public holiday) seen in five months. The last time a smaller full-week kill was recorded was back in early March, when numbers fell to 137,000 head due to the combined impact of heavy rain along the Queensland/NSW coastal belt, and local holidays in some southern states.

Only Tasmania recorded a rise in kill numbers last week, lifting 3pc to account for 3722 head. All other states were either all square, or in negative territory.

While still accounting for well over half the national tally (albeit in winter cycle, when southern kills are slow), Queensland’s figure of 73,366 head was back 4pc on a week earlier. The biggest influence was JBS Australia’s Dinmore show holiday Monday last week, which in itself accounted for a loss of about 3400 head.

In comparison with the same week last year, however, Queensland’s kill remained 4pc higher, and is unlikely to fall below year-ago weekly comparisons for some time yet.

New South Wales recorded zero change in rate of kill last week, accounting for 36,679 head, while South Australia was also unchanged at 7067 head. Victoria’s tally fell 1pc to 23,525 cattle, reaching its seasonal low-point.

Useful to excellent seven-day rainfall of 25mm to 75mm across large areas of Victoria, Eastern SA, southern NSW and southern WA could put some pressure on slaughter cattle supply in the current week, several local processors said yesterday.

Extensive bodies of water were reported across south-eastern South Australia, based on aerial observations tracking from southeast Queensland late yesterday afternoon.

As stated last week, some Queensland processors are purposely trying to curb kills a little at present, to relieve pressure on supply into a very flat export and domestic wholesale market. The state’s weekly kill has now fallen close to 9000 head in the past three weeks.

A resurgent currency hasn’t helped export prospects, with the A$ lifting US2c over the past ten days from the 89s to the high 91s yesterday. That appears to be encouraging some importers to hold off placing orders, in the expectation that the A$ may start to settle again, exporters said.  

The domestic wholesale environment is faring little better, struggling under the weight of volume with particular difficulty being experienced in selling striploins, cubes and other barbecue items.

Most southern Queensland processors yesterday said they still had plenty of cattle around them for the next two to three weeks, and plants further north were still very busy, with solid bookings well into the week starting September 2.

Some SEQ grids show 5c lift

There has been upwards movement evident in some southeast Queensland grids in the past week to ten days, with one large processor lifting rates 5c/kg on all grassfed cattle (grainfed descriptions are still in strong supply due to earlier drought-driven placements in feedlots). Another large SEQ processor also lifted rates 5c/kg, for both grass and grain.

That’s due to numbers slowing a little, particularly for the better killable cattle. Plainer cattle and stores remain in abundant supply.

Grid prices for Southeast Queensland this week are around 305-310c for grassfed four-tooth heavy steer, 310-315c for milk and two-tooth, and 260-270c best cow.

Southern grids are still 10-15c/kg better than Queensland, due to seasonal supply, but southern cattle numbers are starting to improve, suggesting the price differential might start to narrow soon.



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