Processing

Weekly kill: Forward bookings now deep into October, as grids continue to slip

Beef Central, 19/09/2023

DESPITE the activation of Saturday overtime shifts at numerous beef processing plants across eastern Australia to try to clear the backlog of cattle, forward bookings on slaughter cattle now extend deep into October at many locations.

Some operators are now more or less fully subscribed for October kills, offering space bookings only for November. Others have withdrawn (or continued to withhold) direct consignment grids altogether for the timebeing, knowing they have more than enough slaughter stock on hand.

The current log-jam of meatworks cattle now looks as bad as it has been since the depths of the 2019 drought, when some plants had waiting times of two months on slaughter stock. The difference then, however, was that weekly kills were often above 160,000 head a week, when labour was more plentiful.

Weekly national slaughter has risen marginally over the past month, averaging better than 125,000 head since the week ending 25 August – three of the largest kills seen all year. Earlier this year a popular theory emerged that national slaughter might struggle to get past about 115,000 head this year – but nobody at that time anticipated that seasonal conditions and cattle supply pressure would deteriorate as it has.

The current heat-wave episode across parts of southern Australia, forecast to extend north into Queensland tomorrow and Thursday, is only throwing fuel on the fire on the current cattle supply/demand environment. And BOM’s latest temperature forecast suggests above median maximum temperatures are ‘very likely’ (greater than 80pc chance) for almost all of Australia for October to December.

Despite that forecast, one large multi-site processor said vendor inquiry had tended to slow a little this week, after a noticeable spike in calls last week.

Grids slip another 10-20c/kg

There’s been further pressure on direct consignment slaughter cattle prices as a result, with grids typically falling another 10-20c/kg across different parts of eastern Australia since Friday.

In Queensland, processors in the nation’s highest concentration of operations in the state’s south have taken another 10c/kg off their over-the-hooks grids, repeating last week’s adjustments.

It means competitive processors in southern Queensland today sit at 465-470c/kg for four-tooth export-weight steer (with HGP) and 390-395c/kg for heavy cows. Expect to see 10c/kg less than that for the concentration of plants in Central Queensland, due to the freight differential.

Further south, some sheds are not quoting this week due to supply congestion, but  southern NSW grids seen this morning show four-tooth grass ox at 455c/kg and heavy cows 360c, and eastern regions of SA, 475c the steer and 440c on heavy cows, both back 20c.

It’s getting harder to find precedents for pricing at this level, but from what we can see, direct consignment grids were last at levels like this back in 2014-15.

Saleyards continue decline

Direct consignment price trends are also clearly reflected in saleyards selling, with most sales early this week described as ‘soft to very cheap.’ Gunnedah this morning yarded 2880 head, up 8pc on last week, with reduced competition throughout. Heavy grown steers were back another 20-30c and better cows up to 14c easier.

Rain is the only variable that can turn things around now, but it needs to be remembered that September/October are often dry months in the northern half of Australia, before the onset of storms.

Unless conditions change dramatically, it’s now looking increasingly likely that large export processors will continued their 2023 seasons as deep as possible into December, with 21 or 22 December being earmarked by some for final kills, before the traditional Christmas/New Year closure starts.

 

 

 

HAVE YOUR SAY

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. Paul Franks, 19/09/2023

    I would say while it is like this, processors will be going as hard as possible. The profits they will be making on these prices will be very handsome.

    When it rains and turns around. It will be hard to have any sympathy if processors have to pay high prices for cattle. It is just business.

Get Beef Central's news headlines emailed to you -
FREE!