Processing

Weekly kill: More southern cattle heading north

Beef Central, 19/11/2013

 

AS cattle supply out of large parts of Queensland becomes depleted after a long, hard turnoff year, large southern Queensland export processors are increasingly pulling cattle out of New South Wales and as far south as northern Victoria to maintain current high rates of kill.

The flow of available stock from the gulf country and north western Queensland has noticeably declined, with the majority of cattle now being sourced from western districts and south of the Queensland border.

Saleyards number also reflect the trend, with total Queensland yards throughput last week reduced 17pc week-on-week to total 9000 head. Scattered showers over the supply area saw numbers at Dalby slip 41pc, while Warwick eased 4pc and the Toowoomba sales 62pc and 18pc on the previous week.

The trend over the past three weeks or so has been for Southern Queensland processors to operate actively as far south as Wodonga. Road train loads have been running north out of centres like Forbes, Gunnedah and Dubbo in some numbers both this week, and last.

That’s being driven by two things:

  • Hitting the bottom of the barrel in terms of sourcing cows, particularly, closer to home out of Queensland, and
  • Plentiful supply and attractive price differentials making the freight-bill back to southern Queensland worthwhile.

While it’s not complete unusual for southern cattle to come north at this time of year, particularly in the thick of the southern annual cow turnoff after preg testing, it is more pronounced this year because of the growing northern supply issue.

Here’s some sums. Cows around Dubbo and centres further south like Wodonga are currently around 35c/kg deadweight, cheaper than the same cow in southern Queensland. Cows worth 275c/kg carcase weight in the south are currently worth 310c in southern Queensland, a difference of $91 on a 260kg carcase weight animal. That more than covers the $60-$70 or-so a head freight bill for the 1200km trip north to Dinmore, Oakey or Beenleigh from southern NSW/northern Vic.

Liveweight prices in Dubbo and similar centres in NSW recently have been around 125-135c.

“We haven’t had to rely on those southern cattle so much over the past few years, but it is more pronounced this year,” a large Queensland processor said this morning. “The growing local shortage can be seen in Queensland’s weekly female kill, which was relatively light again last week, at around 35pc.”

Last week’s Eastern States beef kill reported by the National Livestock Reporting Service saw numbers remain stubbornly high. The five-state tally of 155,997 was barely 200 head less than the week before, and continues the sequence of big kills much deeper into the year than many expected possible. To put it into context, last week was still the seventh largest Eastern States beef kill of the year.

The difference now is that whereas the massive weekly kills earlier in the year were being driven squarely by all-time record tallies in Queensland – the biggest processing state accounting for about half the national total – equilibrium is now starting to shift south.

Queensland’s kills are still very large, reaching 76,310 head last week, still up 1pc on this time last year, but it’s evident now that killable cattle are becoming increasingly harder to find.

What’s happening is that very high southern state kills are now adding to the Queensland numbers, to maintain the high throughput trend.

 

Three-year high for Victoria's kill

Victoria last week, for example, had its biggest kill week in at least three years, accounting for 28,018 head, up 11pc on last week, and 51pc higher than this week last year. It’s being driven because the ‘numbers are there’ this year, and the state remains dry in spots.

Last year, for example, the highest kill all year for Victoria was only 22,950 (early December) and the year before that, in 2011, the high point was in January (23,754 head).

NSW weekly kills are also at near threshold levels, accounting for 38,525 head last week – up 14pc on this time last year. Tasmania was also well up, killing 4598 head last week (+18pc on the previous week and +35pc on last year), while South Australia was the only outlier, processing 8546 head last week, -6pc.

It seems like ages since southeast Queensland processors last significantly altered their direct consignment grids, and once again there was very little change last week. One large processor lifted cow prices 5c, reflecting the trends discussed above, but most processors were all square on earlier spot rates.

Processor grid price offers from Southeast Queensland yesterday showed the top of the heavy cow grid is currently sitting at 305-315c/kg, with grassfed 0-2 tooth steer at 345c, and four-tooth 340c. The best grassfed MSA steer money we could find yesterday was 360c/kg, and grainfed MSA, 375c. 

 

 

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