QUEENSLAND and northern NSW slaughter grids have dropped sharply in the past week, due to a combination of adequate cattle supply and increasingly difficult meat trading conditions in the US, where beef production this year is booming.

Plants in southern parts of Queensland have adjusted grids downwards by 10-15c/kg since this time last week. Grids seen this morning have best heavy cows back to 420-435c and 460-495c on grassfed four-tooth ox. Some Central Queensland grids have recorded 20c/kg declines since last week.

Also reflecting growing supply, in northern NSW, one export processor had offers for kills week commencing 21 May (not April) of 445c/kg on four tooth ox and 410c on cows.

Processor numbers in Queensland are now building on the back of the big March rain event, with cattle having had some time on good feed. All processors spoken to for this report indicated they were now reasonably well-covered for kills in the weeks ahead (next week is a four-day week, due to the ANZAC Day holiday.)

Saleyard numbers remain strong, and are only likely to keep coming if it stays dry. Depending on location, saleyards prices in Queensland are currently 5-15c/kg below direct consignment rates, on a carcase weight equivalent basis, before factoring in costs.

That perhaps demonstrates the current supply pressure being exerted in Queensland, and similar circumstances apply in the south, where the impact of very dry weather is having a serious impact on the market. Another big yarding is forecast for Dubbo this week, and sizeable sales were held at Wagga and Gunnedah, where big numbers of store cows are turning up each week due to the conditions.

Operators are killing the better end of those southern cows, while others are finding homes in the paddock. Queensland operators have had a presence at recent southern sales like Gunnedah, Dubbo and Wagga, apparently both slaughter and store buyers, attracted by the numbers of suitable cattle on offer.

Good feeder steers at Wagga and Gunnedah did not make any less than similar steers at Dalby last Wednesday, but lighter southern cows have slipped perhaps 20-30c/kg in value compared with a couple of weeks ago. Good black cows that were making 200c/kg liveweight only a few weeks ago were making 170c/kg this week in quoted southern sales.

The current high turnoff of cattle in the south could put a hole in Victorian and southern NSW processors’ kills later in the year, one processor said – perhaps pushing buyers north earlier than they otherwise would.

Larger recent kills across eastern Australia have presented problems for export sales desks, now facing a large and growing supply of beef being generated in the US industry. Trade into the US, particularly, is proving difficult this week, as well as mounting US export competition into other primary markets like Japan and Korea.

There’s been a sharp decline in the value of 90CL lean grinding beef into the US over the past three weeks, down about A20c/kg in price.

One worry that’s starting to emerge is the condition of March-planted oats crops on the Darling Downs, most of which have received no follow-up rain and are starting to stress with further hot weather and no sign of follow-up.

Kills strengthen

The eastern states weekly kill last week recovered sharply after the early holiday-shortened weeks, reaching 134,102 head – the second largest throughput so far this year.

Queensland jumped 20pc versus Easter-Monday week the week before, reaching just over 64,000 head, while NSW was up 24pc to 34,800 head.

Victoria jumped 21pc to 25,700 head; South Australia was up 17pc to 5160 head; and Tasmania lifted 12pc to 4366 head.

Year-on-year comparisons are where the current very dry conditions can be seen in slaughter numbers, with Victoria up a massive 59pc compared with this week in 2017, and NSW up 46pc.