AFTER a sequence of four or five weeks where there has been a steady correction in direct consignment grid offers from Queensland and northern NSW processors, most over the hooks quotes this week are unchanged from seven days ago.

It perhaps best signals that processors now recognise that the recent rally in cattle supply brought on by worsening seasonal conditions across large parts of eastern Australia may be coming to an end, and the delicate balance between supply and demand now runs some risk of over-extending.

Processors spoken to this week suggested they are reasonably well-covered for slaughter cattle requirements for the next two weeks, but numbers are again starting to tighten up from week commencing September, week two.

Last week’ eastern states kill reflects that, with numbers back another 3pc on the week before, and continuing to gradually trend down over the past four weeks.

Putting further pressure on grid offers this week would only add to processors’ supply challenges going forward, several said.

The depth of the impact that the dry conditions is having is clearly evident in the numbers put before processors, both via saleyards and direct consignment since June. Many Queensland and northern NSW processor grids have now fallen 50-60c/kg since the start of the new financial year.

With the exception of one Queensland processor which has eased its steer and cow offers another 5c/kg since last week, most others north of the border remain unchanged from our previous report.

Grid offers seen this morning for southern Queensland kills in coming weeks ranged from 455-490c/kg on the benchmark four-tooth heavy grassfed ox, and heavy cows from 400-430c.

A large northern NSW export processor has offers this week for kills week commencing September 18 of 450c/kg for four-tooth steer (HGP-free), and 400c/kg on heavy cows.

30c gap in grids between north and south

The recent price movement in northern regions has opened up a 25-35c/kg price difference between northern and southern processing offers at present, fuelled further by recent rain in parts of Victoria and southern NSW. It’s pushed a number of Victorian and southern NSW processors into southern Queensland chasing cattle over the past week or two, content to pay the $80-$100 freight bill to get the cattle home, knowing they are getting a 30c/kg discount off the local price.

That trend has been evident at a few southern Queensland and norther NSW sales recently, but it’s hardly a rush at this stage, Dalby agents told Beef Central this week. It’s not at all uncommon to see ‘Mexicans’ north of the border trying to buy slaughter cattle in late August, even in normal years.

The spot market for 100-day grainfed cattle continues to struggle at present, with one of the nation’s largest export processors not offering a quote on grainies this week. Other have offers out for prices from 495-505c/kg, indicating that feedlots are full, and there’s little need to chase supply. At the other end, it’s still tough going for grainfed cuts on the international meat sales desks.

This week’s eastern states kill for the week ended Friday of 126,215 head is back 3pc on the week before. Queensland was worst affected, being back 7pc to around 65,500 head – almost entirely due to a 21pc decline in female slaughter. South Australia also dropped 5pc, to around 6900, while Tasmania was slightly softer at 4316 head. In contrast, NSW lifted its weekly kill 7pc to 29,500, while Victoria rose 2pc to 20,100 head

Feeders continue to ease

Feeder cattle prices continue to slip this week, with many descriptions back another 5-10c/kg liveweight, MLA reported.

At least a part of that may be the closure of the ‘window’ necessary in order to place cattle on feed in time for slaughter after 100-days on feed, before most export beef plants close up for their traditional Christmas/New year break. Often there is at least a fortnight when heavy feeder buying activity goes quiet during late August, for this reason. Resumption in September some time will be for 100-day slaughter some time in the early new year, after grainfed plants get back to work.

Good flatback feeders this week on the Darling Downs are making 285-290c/kg, buyer say.

EYCI heavily impacted

The heavy impact of dry conditions is evident in the Eastern Young Cattle Indicator, which yesterday reached a new 16-month low of 541.5c/kg.

That’s down a breathtaking 177c/kg on this time last year – possibly the largest-ever year-on-year change seen in the indicator since it was launched in 1997. As recently as early June, the EYCI still sat above 655c, more than a dollar higher than today’s rate (see home page ‘industry dashboard’ graphs).