Weekly kill statistics produced by the National Livestock Reporting Service continue to stun market observers, as the impact of the serious drought across inland and northern parts of Eastern Australia again weighs heavily on slaughter performance.
The week ended Friday set all-time record seven-day kills for Queensland, and the combined Eastern States.
Queensland’s kill reached a new high of 82,866 head, more than 1000 head above the previous record set more than a decade ago, while nationally, the Eastern States figure reached 155,286 head.
That’s easily the largest number seen since MLA stated this data-set back in July, 1998.
It reflects the acute supply-side pressure now in motion as inland and northern producers work desperately to exit surplus cattle in preparation for the likelihood of a long dry spell ahead.
Today’s Roma store sale for example, the nation’s largest weekly cattle sale, is expected to draw for more than 13,000 head – again, getting close to a record yarding.
MLA chief analyst Tim McRae said last week’s slaughter report number was so large that NLRS staff went back and double-checked their collected figures to ensure it was accurate.
Last week’s kill was possibly exacerbated by the prospect of short killing weeks ahead, and an attempt by processors to ‘stockpile’ some beef in preparation:
- This week will produce only a four-day kill due to the Good Friday holiday
- Next week will be the same due to Easter Monday, and
- Four weeks hence, another short week will fall due to Anzac Day on April 25.
None of that is conducive to clearing the heavy backlog of cattle trying to find a place in the market.
Some processors yesterday speculated that because of the supply pressures, extended manning of shifts, and/or weekend kills, Queensland could go close to killing its ‘normal’ five-day weekly kill this week in just four days.
The cycle may have already reached a seasonal peak, however, as large export processor Kilcoy Pastoral Co is due to close for its annual seasonal and maintenance break for a fortnight straight after Easter, effectively reducing Queensland’s killing capacity by about 3500 head until the week starting April 15.
Compounding the effects of the large recent Queensland kills has been some big tallies recorded in southern states. Last week:
- NSW recorded throughput of 36,267 head for the seven-day cycle, up 4pc from the week before and 21pc higher than this time last year.
- Victoria (23,259 head) was up 22pc on the week previous, and 41pc on year-earlier performance (albeit impacted by public holidays)
- South Australia was +4pc at 8605 head (54pc up on last year, again, somewhat impacted by a public holiday) and
- Tasmania rose 16pc in a week and 21pc on last year to post a kill of 4289 head.
Both physical saleyards prices and direct consignment quotes have declined substantially – dramatically in places – again over the past week, as the supply pressure mounts.
Not surprisingly, Southeast Queensland grid prices have lowered further again this week – in many cases now down 20-30c/kg on prices seen a just a few weeks ago.
Southern Queensland public grid prices quoted to Beef Central yesterday included 310-315c/kg for milk and two-tooth ox; 300-310c/kg for four teeth; 300-305c/kg for six teeth; and 275-285c/kg for heavy 300kg cows. Even the quality end has been dragged back, with MSA steers down to 350c/kg in quotes this week, and EU grassfed steer 360c.
Quotes in Central Queensland were typically 10-15c/kg below those rates this week.
One large processor said his Queensland plants were heavily-booked, kill-slot wise, through to “nearly the end of May.”
“The hardest part with the number of cattle running around is to find trucks,” he said.
A major rail derailment on the Mingela Range, west of Townsville, had also created huge headaches in getting cattle out of the western line by rail.
The derailment has effectively shut the line for a week, with services not due to recommence until Sunday at the earliest. Prior to the stoppage there were at least five Cattletrain services a week clearing drought-affected cattle out of northwestern Queensland rail-heads, and the closure is now creating major supply disruptions, a central Queensland processor said.
Figures tend to be 'under-reported'
An important point to note about the NLRS weekly kill report, which makes the current numbers all the more remarkable. It actually ‘under-reports’ processing activity in eastern states, due to a number of substantial processors choosing not to provide weekly statistics. In Queensland, Nolan’s at Gympie does not report its numbers, leading to a potential under-reporting of the Queensland kill by about 2000 head per week.
In Victoria, the list is longer, including MC Herd, Wagstaff (currently closed due to fire, see Beef Central’s report yesterday), Ralphs and others. In percentage terms, Victoria is likely to be the most ‘under-reported’ cattle slaughter state, sources tell Beef Central.
In total, there could be 4000-5000 head per week that remain ‘un-reported’ in the weekly NLRS summary.
The main reason for processors’ non-reporting seems to be linked to a long-standing dispute with MLA’s NLRS over market reporting methodology.
Despite those omissions, the kill numbers produced nationally, and state-to-state, are still of considerable value in painting a picture of overall trends.
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