Processing

Weekly kill: Numbers ease as killable cattle become harder to come by

Jon Condon, 06/08/2013

 

While on face value last week’s Eastern states kill showed little change, take out a couple of aberrations and there is clear evidence that numbers are adjusting downwards.

The official tally 149,946 was less than a hundred head lower than the week before, but the comparison was bolstered by several factors, including a return to work after a three-week seasonal break at one of southern Australia’s largest sheds.

The T&R factory at Murray Bridge, with capacity for around 800/day, produced a 69pc rise in throughput in South Australia’s tally last week (up to 6317 head), which made the trend last week look more modest than it really was.

Similarly, the combination of butcher’s picnic holidays in some sheds, and some local show holidays around Brisbane this week and next will further dent regional slaughter figures in the next little while. Dinmore, for example, will have its show holiday next Monday.

Reports out of southern Australia have suggested a few sheds are now starting to operate on four-day rosters, while others, like G&K O’Connor at Pakenham, have maintained a five-day kill through winter so far, but are pushing through reduced numbers each day.

That’s normal for this time of year in the region, as killable cattle become harder to come-by, and recent higher prices for slaughter stock across Victoria and southern NSW  become harder to justify for regional processors at higher slaughter levels.

Southern processing numbers have been supported recently with more slaughter stock out of central and even northern NSW and cows out of Central Australia, contacted suggest. Southern grids are now a clear 15-20c/kg better off than southern Queensland equivalents on many descriptions, as the southern seasonal supply shortage takes hold.

While cattle supply north of the border remains strong, Queensland’s kill last week eased 3 percent from a week earlier to reach 79,867 head. Shift rosters appear unchanged, but numbers were marginally lower at a number of large plants, including JBS Dinmore and Borthwicks Mackay, where a backlog of frozen product in storage was reported, curtailing killing capacity for a day or two.

In historical terms the Queensland kill remains large, however, being 14pc above this time last year. The gradual increase in kills during the back end of 2012 did not really kick in until mid-August.

NSW kills also declined last week, falling 2pc to 36,207 head, while Victoria rose 2pc to 23,537. Tasmania was unchanged on 4018 head.        

Processors continued to report a big inflow of grainfed trade and export cattle last week, surplus to requirements in many cases, due to the big inflow of feeder cattle into feedlots three to four months ago caused by drought.

Currently, grainfed non-MSA 70-day steer is worth around 340c/kg in southeast Queensland grids, +10c for MSA.

Grid pricing trends continue to bounce around, with no clear trend in evidence.

One large SEQ processor dropped rates 8c/kg across the board late last week due to an ample supply of slaughter cattle on its books, and a desire to curtail forward bookings a little. That appeared to be partly driven by the falling dollar, as well as downward saleyards price trends last week.

Other major grids remained unchanged. Current public grid prices for Southeast Queensland are around 300-305c for grassfed four tooth heavy steer, 310-315c for milk and two-tooth, and 255-265c best cow.

Teys races to fill kill roster

 A standout in the southeast Queensland market this week is Teys Brothers, which purposely ran-down its booked cattle for Beenleigh late last week due to uncertainty surrounding the outcome of last Friday’s staff vote over accepting the company’s Enterprise Bargaining Agreement offer of 3pc over four years.

The offer was ultimately accepted by staff, but it’s meant Teys Beenleigh has now been left with a big livestock hole to fill on short notice.

While the company’s public grid has not officially changed, attractive deals are definitely being done by Teys Beenleigh to raise a kill this week.

Most other southern Queensland processors said they still had plenty of cattle around them for the next two to three weeks, and plants further north were still very busy, with solid bookings well into the week starting August 19.

  • The Eastern Young Cattle Indicator closed yesterday at 325c/kg, back 0.75c on Friday, and a full 5.25c/kg below this time last week.
  • The A$ dropped sharply again overnight, falling to US89.15c this morning (-0.26c on yesterday) in expectation of a drop in official interest rates to 2.5pc by the Reserve bank later today.

 

 

 

 

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