AN acute shortage of slaughter cattle again this week is weighing heavily on processing operations, with last week’s eastern states beef kill reported by NLRS at just 116,920 head – some 23pc below this time last year.
The combination of more wet weather, which has re-activated supply difficulties from regions like western Queensland and western NSW, and the general lack of finished supply has severely hampered processing activity last week.
Beef plants from Central Queensland to Victoria are planning to skip processing shifts again this week, as the supply challenge further intensifies. One plant in Central Queensland is planning to operate for just a single day this week, and plenty of others only have sufficient cattle in from of them for three days.
Central Queensland’s position has been made worse, because all three plants were earlier pulling large numbers of western Queensland cattle, where rainfall of 25-75mm across large areas fell this past week, making delivery impossible.
On the positive side of the ledger, JBS Townsville re-opens this week after an extended closure, following January’s flood damage.
In a desperate attempt to flush out a few more cattle, some southern Queensland grids have risen 10c/kg this week, with one company’s offer for HGP-free four-tooth grass heavy steer reaching of 650c, and heavy cows 570c.
Competitors have remained unmoved at 10-20c/kg behind those rates, however, at 640c for four-tooth steers and 550c on heavy cows. They claim that simply throwing more money at producers will not lift cattle supply, under current difficult market and weather access conditions.
“It’s just going to send the wrong signals to producers – the meat market absolutely does not justify it,” one contact told Beef Central.
“Sheds would be dropping days this week even if it had not rained, because there just isn’t the depth of supply. We’re watching the world beef demand situation every day. There’s just no appetite to kill cattle at present, given what’s happening with coronavirus,” he said.
“If it wasn’t for wanting to try to keep plants open to provide income for our employees, we’d be shut,” one operator said.
Cattle in some areas have now been doing well on new feed for three or four weeks, and attention is starting to focus on likely turnoff periods.
“Even though they have freshened-up in appearance, cattle will need time on good feed to get weight into them,” one processor buyer said. “It doesn’t happen overnight.”
“There will be a big lag now until we start to see some grass-finished cattle in May and June – but even then, I don’t expect to see any depth to it.”
“Later in the year, some good Channel Country bullocks might emerge following that region’s recent rain, but again, not in really big numbers.”
There was also a risk of a lot of finished cattle (following the benefit if recent rain and pasture growth) hitting the market at the same time, one processor said.
“But how long it lasts is the big question.”
Numbers of slaughter cattle are also rapidly tightening up in southern Australia. Beef and sheepmeat plants including JBS Scone and Southern Meats at Goulburn dropped shifts last week, as supply tightened and prices rose.
Southern Meats Group CEO Coll MacRury told ABC it was a short-term strategy to help manage costs and avoid running at a loss.
“The prices are just crazy at the moment and … we will continue to be in out and of the market while it remains at this level,” he said.
Southern Meats will be operating with limited kills this week but the outlook is likely to get even harder for sheep processors. Mr MacRury confirmed to ABC that the company’s other in Western Australia WAMMCO would continue to operate at this stage.
Kills ease further
In last week’s eastern states kill, Queensland accounted for 53,112 head, a massive 32pc behind this same week last year, while NSW, at 30,515 head, was 16pc behind last year. Victoria was 10pc down, year-on-year, at 24,644 head, while South Australia was 2pc down at 3974 head, and Tasmania 6pc down, at 4675 head.