Processing

Weekly kill: Grid prices stabilise, after previous week’s dramatic rises

Jon Condon, November 5, 2019

QUEENSLAND processor grid offers stabilised this week, after dramatic 20c/kg rises seen in last week’s kill report.

Prices in both southern and central parts of the state climbed to all-time record levels late last month, with four-tooth grassfed heavy steers currently quoted by some processors in the state’s south at 600c/kg (some sites 10c/kg less for HGP-implanted descriptions), and heavy cows at up to 500c/kg.

Current money is easily the highest offered for export steers and cows in history, valuing a typical 350kg slaughter bullock at $2100.

Queensland prices started to move north in late September, and have now lifted around 50c/kg on cows and 40c/kg on steers, in a series of rises.

Resurgent international demand is being tagged as the key reason behind the most recent sharp kick in slaughter cattle prices, and this week the trend continues.

On top of already huge gains, lean imported grinding beef prices into the US climbed another 54c/kg this week, to currently stand at 819.3c/kg CIF. That’s a mind-boggling 7pc rise in a week, on top of a lean grinding beef market which has climbed steadily throughout the year, from a low point of 600c/kg back in January – a 37pc jump in ten months.

Movements like this are sparking some speculation around the industry this week around just how high cow prices might go next year. One well-connected stakeholder source has suggested a 600c/kg cow price might be seen some time in 2020, almost regardless of whether it rains or not.

If realised, that would represent another 100c/kg on top of what is already a record high on slaughter cows, driven by China demand for meat protein. A 600c/kg market would price a typical 280kg carcase weight cow at $1680.

Over the hooks quotes

NLRS over the hooks summaries for direct consignment cattle reported rises in cow prices in both NSW and Victoria last week.

NSW grids on average rose 6-7c on slaughter cows, with heavy cows lifting to 468c, while grown steer prices averaged 1c/kg higher.

In Victoria, cow grid offers last week lifted 3-4c/kg on average, while grown steers slipped 2-3c in value. Quality heavy cows +280kg without too much fat cover were quoted at 465c in Victoria last week, and grown four-tooth steers +300kg at 556c.

Rain impact virtually nil

While it was greatly welcomed by those who received it, rainfall in pockets of central western Queensland and northern NSW over the past ten days has had virtually nil impact on cattle markets or flows of slaughter cattle, processors said this morning.

Falls of up to 100mm around Cunnamulla and decent rain around 30-50mm around Moree, Blackall, Longreach and Charleville fell away to much smaller registrations in surrounding districts.

“Some people in areas that received a little relief are sitting on the fence for a minute, but that’s normal. But in truth, they are all going to need decent follow-up rain over the next three weeks to have any impact on pasture growth whatsoever,” one processor said this morning.

“Anybody who has no bulk of feed in front of them will still continue to sell, even if they received a shower last week,” he said.

“It just hasn’t been anything like enough to have had an impact on decision-making.”

A blast of hot weather forecast for much of eastern Australia later this week would further impact turnoff decisions, another processor said.

“Whatever green pick emerges could be gone in another week, without follow-up,” he said.

Slaughter cattle supply heading into mid-November remains solid due to drought pressure, and one large processor said he now expected supply to outstrip available capacity for the remainder of 2019, unless a dramatic weather turnaround occurred.

Some large processors are now starting to discuss season closure dates, with 19 December already nominated by several as the last 2019 kill.

Several will hold their first 2020 slaughter shift on Friday 3 January, allowing normal boning shifts to recommence on Monday 6 January.

There was no weekly slaughter report provided by NLRS at time of publication. It will be added to this report when it arrives.

 

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