Weekly kill: Hot, dry weather pushes cattle forward, further pressuring prices

Beef Central, 07/03/2023

HOT, dry weather across most parts of eastern Australia has sparked a flush of slaughter cattle this past week, putting further pressure on already deteriorating direct consignment grid price offers.

In sharp contrast with Queensland’s Gulf, and the NT’s Barkly and VRD regions which have received a drenching 150-250mm in the past seven days, there’s been little rain across the eastern states for the past month. Even many coastal areas have had only 25mm or less since the start of February.

It’s sparked a sudden surge in offload activity.

In Queensland, some processors are now booked a month ahead for spaces into early April, and indeed one large operator in the state’s southeast has suspended over the hooks offers for the timebeing, confident it is well-covered.

Some competitors do not want to commit on price too far forward, in what is obviously a falling market.

We’d have to cast back to depths of the drought turnoff in 2019-20 to find a week where forward bookings held by processors have been so advanced.

Several processors said their phones really started to ring over the weekend, and had only continued yesterday and this morning.

“There’s some big licks of cattle among them – people with 500 bullocks that have to go, and another thousand behind them, because of the deteriorating pasture conditions,” one contact said this morning.

Grids back another 10-20c

Quotes seen this morning from active exporters for kills in southern Queensland in coming weeks have four-tooth heavy grass steer (with HGP) at 605-610c/kg, with heavy cows 520-540c. Add 10c on some grids for HGP-free ox. Both steer and cow quotes are back another 10-20c/kg on this time last week.

Quotes a month ago in early February still had cows at 570-580c, and steers 635-650c – a fall of 40c/kg on both.

Quotes are more active in Central Queensland, typically 10c/kg behind the figures above from sites in southern parts of the state. Look for money around 530c/kg for heavy cows in Rockhampton or Biloela, and 600c for four-tooth ox.

Dry weather is also impacting slaughter cattle supply in southern states, after a very tough first two months of the new season. Some southern processors are now at least a week to ten days ahead in bookings. Southern quotes seen this morning have four-tooth heavy steer, no HGP at 650c, and best cows 570c.

Processing tipping point?

All the indications are that this current week’s national kill (when reported by NLRS next Tuesday) may again test the processing industry’s capacity threshold, given current extreme labour constraints.

A situation now appears to be emerging where it may only take an extra 10,000 slaughter cattle to come to market in any given week to upset the supply-demand apple-cart – such is the delicate balance with processing labour availability.

It’s known that one large southern Queensland processor carried out a Saturday overtime shift last weekend, as part of a catch-up requirement. That’s the first time we’ve heard of a weekend boning shift in years.

Urgency in kills in coming weeks will also be impacted by looming public holidays, which along with Easter, Anzac Day and local show holidays will see up to four weeks out of five reduced in processing capacity before the end of April.

There was no national slaughter report available by the time this item was published. Results will be added here when they arrive.

Weather change ahead?

A big factor later this week could be a substantial weather change forecast by the Bureau (see image) which could deliver 25-50mm or more across a large portion of Queensland, from the northwest to the southeast, and northern regions of NSW.

Decent falls could see the current heavy supply pressure slow somewhat, cattle buyers said this morning.

“Everyone is looking at the sky,” one contact said.

“It will steady the ship, if the rain is widespread and significant enough,” he said.

One processor said he was considering pulling up on quotes as recently as yesterday, but had left the gate open for the timebeing, given the weather forecast for later this week.

“That rain, if it delivers, could be just enough to put a bit of pressure back on in Queensland – particularly the CQ plants,” he said.

“But any disruptions would only be very short-term.”





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