Processing

Weekly kill: February rain outcome will have big bearing on rates of kill

Jon Condon, 30/01/2018

RAINFALL, or perhaps the lack of it, during February is shaping up to have a big bearing on rates of slaughter across eastern Australia during the next few months.

If the Bureau of Meteorology’s eight-day forecast published below comes close to fruition, slaughter cattle availability might slow somewhat, but if the weather impact is less than hoped-for by many cattle producers, big decisions about reducing numbers will be made across large parts of Queensland and NSW in coming weeks.

Source: BOM. Full weather wrap in tomorrow’s weekly rainfall report.

Mid-to-late February has been a line drawn in the sand by some producers to receive a late break to the ‘wet season,’ which has so far come to nothing. Tough decisions will follow to lighten off numbers if there is no result.

Destocking, rather than selling-down, is already being discussed in some parts of Queensland’s central west, but a challenge will be found in access to agistment, with such large expanses of Queensland and NSW now suffering extremely dry conditions and feed shortages for this time of year.

MLA’s annual 2018 industry projections issued this morning has revised the 2018 national beef kill slightly downwards, due in part to developments in seasonal conditions and the large number of young cattle that were pushed into feedlots in 2017 due to lack of decent feed – stock that otherwise would have been finished in the paddock and sent to market in 2018.

MLA is suggesting that adult cattle slaughter this year will now reach 7.4 million head, up 3pc on last year, before rising to 7.7 million next year.

“The impact and recovery from the drought years has been by no means uniform and, as such, availability of slaughter cattle this year will vary across the nation,” MLA told stakeholders in this year’s Projections.

“Cattle flow from Victoria and southern NSW should see some decent improvement in numbers, while WA and NT – which both went largely unaffected through the 2015-16 drought years – will continue to perform as the season dictates. Both Queensland and SA will likely see the tightest supplies and strong restocker demand, should weather provide the opportunity,” it said.

In Queensland, it is likely that supply of slaughter stock during the winter months will be tight in 2018 compared to 2017, if average seasonal conditions prevail, before slaughter cattle supplies potentially improve towards the end of the year.

Female slaughter will likely remain relatively low for the next few years given the rebuild.

Grids continue to soften

Under pressure from the resurgent Australian dollar (at US81c this morning), strong international export beef competition and adequate cattle supply, direct consignment processor grids have continued to ease since Friday, with most large multi-site processors in Queensland reducing offers by an additional 5-10c/kg.

Export weight grassfed steers in southern Queensland have now fallen 30-35c/kg since their November recent high-points around 500c/kg, and are around 75-80c/kg below where they sat this time a year ago. On a typical 330kg steer carcase, that’s a year-on-year decline of close to $250 in value.

Most southeast Queensland grids seen this morning have four-tooth grassfed heavy steer at 475-480c/kg and best heavy cows from 410-420c. A large northern NSW export processor had offers out this morning of kills for week commencing 5 February of 440c/kg for four-tooth heavy grassfed steer, and 415c for heavy cows.

While kill slots are starting to fill up for coming weeks, Queensland processors spoken to this morning said there was not yet a ‘waiting list’ for access to kill slots, but described the situation as ‘fairly full’, without being strained. Most, of course, have the capacity to lift their schedules, if supply pressure conditions get too extreme.

Eastern States kills up 12pc year-on-year

While last week’s weekly kill was impacted by the Friday Australia Day holiday, reducing most sites to four production days, the five eastern states still managed throughput of 112,560 head.

That’s a significant 12pc rise on the same holiday-shortened week last year, and reflects the rapid deterioration in the summer grass season. The result would have been even more acute, except for a 41pc decline in South Australia’s weekly kill compared with last year, due to the TFI Murray Bridge plant fire in early January.

Queensland’s slaughter last week reached 56,657 head, as more regional plants got back to work after their summer break. The figure was up 10pc on the previous week, and 25pc higher than last year.

The NSW four-day kill at 27,500 head was +3pc year-on-year, while Victoria (20,300) was up 12pc on last year. Tasmania’s kill rose 4pc year-on-year to 3887 head.

 

 

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  1. Peter Winterflood, 13/03/2018

    thanks

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