Weekly Kill Reports

Weekly kill: Eastern states tally in freefall, collapsing below 100,000 head

Jon Condon, August 18, 2020

THE Eastern states weekly slaughter fell to almost unprecedented mid-season lows last week, in the face of sustained supply pressure caused by the past two years of drought-forced herd reduction.

The National Livestock Reporting Service this afternoon reported the seven-day eastern states adult slaughter tally to Friday at just 97,793 head. Barring Christmas/New Year closure periods, and weeks with a gazetted national or state public holidays, that’s the lowest weekly kill seen in Australia since disruptions caused by extensive flooding in early 2011. The likely trend was forecast in this report two weeks ago.

Click on Beef Central’s home-page Industry Dashboard to see graphs. Earlier sharp drops in kills this year are Easter weeks, and the week ending 13 March when kills dropped to 111,000 head after the big rain event.

Last week’s kill was 17pc lower than the previous week, and a dramatic 30pc down on this time last year.

While a Brisbane show holiday last Friday accounted for a small portion of the decline, impacting a small number of plants in and around the state capital, the overwhelming factor was sheer difficulty in sourcing slaughter-ready stock at present. And it came well before JBS Dinmore’s planned two-week closure starting this Friday, flagged in this earlier Beef Central article.

If the trend continues, a decline in national slaughter throughput of this scale will inevitably put considerable pressure on Australian beef’s ability to adequately service key export markets, Beef Central was told.

Queensland’s kill at 43,538 head last week was down 39pc year-on-year, and declined 28pc on the previous week. Victoria also crashed, declining 27pc on the week before to 14,893 head (41pc below this time last year) as the JBS Brooklyn closure took effect. The NSW kill was less affected, falling 14pc year-on-year to 31,070 head, while Tasmania declined 21pc on the previous week to 3917 head.

South Australia was the only state to record progress, lifting 34pc on the previous week, and 8pc on this time last year to 4375 head.

Mid-August is traditionally a difficult time to fill kill rosters, but the challenge has been made all the more difficult this year by the lingering effects of last year’s drought on cattle supply.

Cow rates show signs of softening

Processor rates for slaughter females have shown some signs of softening this week.

One large Southern Queensland processor which previously led the direct consignment market for cows at 385c/kg, has dropped rates 20c/kg this week.

Other competitors this morning showed offers for southern Queensland kills at 560-570c/kg for heavy cows, while steers remained unchanged at 625-640c on four-tooth grassfed heavy steer (some offers at the top of that range are for HGP-free only).

Central Queensland rates are again similar to southern parts of the state, while in southern states, competitive rates around 615c are being seen this week on four-tooth steer, and cows 550-560c.

In the saleyards channel, some sales early this week showed a softer trend for slaughter cows, especially further north where one large competitor was not operating. At Warwick (southern Queensland) sale this morning, NLRS reported that cows generally could not maintain the levels of the previous week, with losses of 7-13c/kg liveweight, however some of that reduction in price was quality related. Heavy cows also slipped in price at Toowoomba yesterday.

Further south, saleyards cow numbers were limited, but generally held up better.

Dinmore effect

One of the obvious questions in the slaughter cattle market this week is whether the ‘Dinmore effect’ will have a bearing on cattle prices over the next couple of weeks.

As reported on Beef Central last week, JBS Dinmore – the largest processing plant in Australia – will close for a minimum of two weeks from this Friday. This current week, Dinmore is operating for only two days, suggesting the impact, if any, may already be happening.

But given how tight the overall cattle supply currently is, even the removal of one large competitor like this is having little material effect on competition or cattle price, several trade sources told Beef Central.

Speculation has also circulated about whether JBS will simply divert cattle and expand kills at other sites – Beef City and Rockhampton in Queensland, and Primo near Scone in NSW – to compensate for Dinmore’s closure.

The company says that won’t happen, and Dinmore will simply try to consolidate cattle for a week or two to bolster kills after it gets back to work, sometime in September.

Other closures likely?

Rumours have also swirled this week about other possible processing plant closures to follow Dinmore’s and JBS Brooklyn’s example. No real evidence for it could be found, apart from the prospect that Bindaree Beef in northern NSW may close for a week later in September, as part of a fairly routine annual closure carried out at the plant each year for maintenance. Low slaughter stock availability and lack of profitability will obviously make that decision easier to make this year, but it is not an unusual occurrence, Beef Central was told.

 

 

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Comments

  1. John Carter, August 19, 2020

    Isn’t it time for MLA/NLRS to use the PIC/ NLIS /NVD/LPA network to find how many cattle are alive in Australia?
    Any future predictions are meaningless without this basic figure.
    The Queensland beef debt figure is scary.

    You raise a good point, John. Much of the methodology behind reporting herd size is so crude, it is crazy. The privacy limitations behind our industry systems is the problem. Editor

    • John Carter, August 20, 2020

      When we had the NSW MIA we knew how many stock were reported to be on farm in NSW to the then Pastures Protection Board.Two years ago, as I became concerned at the agent reports on falling numbers –and our own district’s shrinkage, I tried to get the NSW figure from the PP Board’s successor–LLS. I was told that Privacy rules forbade it. I asked if they supplied figures to ABS or MLA. No, Privacy laws forbid it. There is no individual ownership figure involved–it is a total, so there is no privacy issue-. This is a country that is going mad.

    • Pat Harper, August 19, 2020

      John, this comment fails to appreciate the role these systems play in industry. NLRS is only intended to report on saleyard throughput, NLIS & NVD once cattle leave the farm. If producers won’t (and you would be the first to highlight producers rights) report the numbers they actually own then we will never accurately know. Isn’t it time to stop blaming systems and start taking personal accountability on farm if you want to know the industry numbers? Just a thought

      • John Carter, August 20, 2020

        Pat,
        I know the roles but surely the NVD /NLIS roles should be able to get a figure. When we claim to have full traceability to the World but don’t know within 20% of our number of cattle we are in trouble–MLA budgets for long term contracts must be a nightmare.
        I also know that some producers won’t be accurate but at least we should try. If the USA and UK can do it we should be able to.

  2. Rob Atkinson, August 18, 2020

    Drought forced herd reduction has been going on since 2013 in many parts of Queensland. Female slaughter numbers have been very high for years.
    Don’t forget that many regions in Queensland are still in severe drought.

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