MOUNTING supply side pressure being seen this week both via saleyards and direct consignment is having a further dampening effect on slaughter cattle markets.

Another round of 20c/kg reductions have been seen early this week in some over-the-hooks grid offers, continuing a trend that started in mid-March as dry conditions started to bite.

Physical sales held early this week are all showing strong downwards price trends, with some very large yardings again being put forward (details below).

The best of the cows offered at some southern Queensland sales this morning averaged only around 290c/kg liveweight.

Beef processing plants across large parts of eastern Australia are now heavily booked through until the late stages of May, and into June in a couple of cases.

Many operators have not seen supply-side pressure like this since the dark days of the 2019-20 drought.

In southern Queensland, grids since the start of March have now fallen 65c/kg (from 830c/kg) on four-tooth ox, and 70c/kg (from 750c) for heavy slaughter cows.

The big surge in supply and forward bookings has prompted some large export operators to offer space bookings only at this stage, with prices to be negotiated with vendors closer to slaughter date some time next month.

In Queensland, some grids have moved downwards sharply again since Friday – back 20c/kg in places. Others have not yet moved on last week’s rates, but warned Beef Central that further changes were likely.

Best offers seen this morning for kills in southern Queensland (for held bookings, due to die in three weeks time) were 765c/kg for four-tooth heavy grass ox (775c for no HGP on some grids) and 680c/kg on heavy cows.

Expect to see grid prices 20c/kg below that in Central Queensland, where May and early June bookings are loading up fast.

Perhaps most alarming is the fact that there’s not yet any sign of the market finding a floor. The only influences likely to change that are an exhaustion of the current heavy turnoff cycle in dry areas, or widespread rain relief.

In southern states, best offers seen this morning include 845c/kg on grass ox in eastern parts of South Australia, down 20c, and 740c on cows and 830c on grass ox in southern NSW, also down 20-30c. Some southern processors have suspended quoting on direct consignment cattle altogether this week, content that they have spaces covered for the next few weeks.

Southern processors continued to operate strongly in the Queensland market this past week, principally out of the paddock but also via the saleyards, despite the big freight bills to get them home. Lack of killable-weight cattle further south as been cited as a reason.

Oats window closes

With the planting window for winter oats now closed on most areas, some concern remains about feed resources to background feeder steers and finish bullocks over the cold months and into spring, out of the Downs/New England region.

Supply chain sources say alternate arrangements are being made in areas further north in Queensland with plenty of grass, and southern areas below the drought impacted region of NSW. Plenty of young backgrounder type cattle as well as breeding cows have already been shifted onto tick-free agistment as far north as Blackall, Barcaldine, Winton, Jundah, Longreach and into the Channel Country, and south onto new season feed in Victoria and even South Australia.

“We are just lucky that most of Queensland is just so good, season wise,” one livestock supply chain manager said.

How effective this is in filling well-grown feeder requirements come August remains to be seen.

Some states (Queensland not included) will miss a day’s kill next week due to the ANZAC Day public holiday, which will only add to processing congestion pressure.

Saleyards channel

In the saleyards system, some very big yardings are being seen again this week, with strong downwards pressure on price evident in some categories. Cattle exiting desperately dry areas of northern NSW and southern Queensland now dominate many offerings. Friday’s AuctionsPlus offering of +24,000 head included an unprecedented 61pc of the entire offering drawn from dry areas of northern NSW.

Direct consignment processor business activity out of dry northern areas is clearly impacting pricing on saleyards cattle this week.

One of the challenges identified by processors with saleyards cattle during a time like this is that kill roster space has to be found promptly, to accommodate them – even when space is very tight. Direct consignment, on the other hand, offers the luxury of some breathing space before delivery.

Wagga sale yesterday offered 4800, up 1100 on last week – partly in anticipation of next week’s closure for Anzac Day. Well-finished cattle across all classes were notably limited. The usual buyers were present, but not all orders were active, leading to fluctuations in demand throughout the sale. Restockers appeared more subdued, reflecting a cautious approach amidst the current conditions. Cow prices experienced a decline of 35-60c, attributed to abattoirs feeling the pressure from the overwhelming number of cattle coming out of the north. The export market presented its own challenges, with not all buyers showing interest in heavy steers and bullocks, which exerted downward pressure on prices. Processors exhibited a subdued response to the 1255 cows offered, largely due to the overwhelming supply coming from the north. Heavy cow prices fluctuated, with many sales reflecting significant price drops. The bulk of the heavy cows sold from 325-358c.

Tamworth offered another huge yarding of 6900 yesterday, with large numbers of cows on offer once again. A full field of buyers were present and active with steady competition from the south on restocker cattle. Yearling steers to feed were considerably cheaper making 370-492c/kg while the heifers ranged from 350-442c. Prime grown cattle were over 40c cheaper, with prime grown steers topping at 430c/kg while the prime grown heifers made it to 424c/kg. Cows were over 25c cheaper across the board, with score 2s and 3s heavily represented and making from 172c to 330c/kg. Prime heavy cows made from 305-359c/kg to average 332c.

Wodonga yarded only 680 this morning due to earlier price corrections at other markets. Not all major exporters made it to the sale and not all operated with some watching the sale. Heavy steers and bullocks were scarce and trade cattle were limited. Feeder steers were few in number, selling from 312-484c/kg, while feeder heifers saw a price correction of 18c with the better types making from 370-460c/kg.   Heavy steers and bullocks suitable for processors were few and not all processors bid. The bulk made from 396c-465c/kg. Heavy cows were in reasonable numbers and most buyers operated, but at a new price levels with prices slipping back by 31c/kg. The bulk of the better heavy cows ranged from 337-365c/kg.

Roma sale yarded 8700 this morning, up more than 2200 on last week. A preliminary report showed big declines in price on most young cattle and feeder descriptions. Full report tomorrow.