QUEENSLAND direct consignment slaughter grids have fallen another 20c/kg over the past week, as export processors struggle to bring livestock prices and red meat returns into closer alignment.

Quotes seen this morning from competitive processors in southern parts of Queensland now have heavy cows on 670c/kg and four-tooth grass heavy steer on 760c. Some of those steer quotes are for HGP-free, with implanted cattle 10c less.

As recently as mid-June, those same buyers were still quoting 740-750c/kg on heavy cows and 830-840c/kg on heavy grass steer. Since then, both steers and cows have slipped 80c/kg, worth $240 on a typical 300kg cow or $280 on a 350kg grass steer.

Central Queensland plants are 20c/kg behind the current rates quoted above, and North Queensland another 20c behind that.

Queensland processors appear reasonably well-booked through to the end of August and into early September, with numbers now flowing out of bigger cattle operations in the state’s northwest, central west and central regions. Channel country turnoff is yet to make a real appearance, but is likely to start soon, Beef Central was told.

In southern states, there’s little change evident in over-the-hooks rates this week, which, if it persists, can only motivate southern buyers to press north again to supplement modest local supply, because their prices now look relatively more attractive than those being offered in the north.

Offsetting that, however, is freight costs, which are rising again as a result of latest Middle East turmoil. Some transport rates have risen 10-15pc on the freight surcharge over the past few weeks.

Best direct consignment quotes seen in eastern regions of South Australia and southern NSW this morning for heavy cows were 760c/kg and grass four-tooth heavy grass steer 830c. MSA yearling steer in Victoria is anywhere from 900-920c/kg this week, with best cows close to 800c on some grids and MSA-eligible cows up to 820-830c.

Seasonal closures are still evident in some southern plants this month. TFI Murray Bridge remains dormant this week for a large installation, designed to take daily throughput up from 750 to 1100, in gradual increments over the next 12 months.

Reports have circulated this week about mainland slaughter cattle going onto boats to supplement kills in Tasmania – not that unusual at this time of year, evidently. That’s been reflected in buying patterns in some southern yards including Mortlake, Wodonga, Echuca, Shepparton and Leongatha – all a little dearer than yards like Naracoorte this week, because of transport cost to get them onto a Bass Strait boat. Some reports suggest that trade might be totalling 400-500 a week at present.

Meat markets looking ‘awful’

Here’s some of the fundamental demand-side reasons why slaughter cattle prices have started to drop recently:

• Proceeds from meat sales into a wide range of export meat markets have softened over the past couple of months, due to a range of factors. Some operators described the current meat trading conditions as ‘awful’ or ‘bleak.’
• The rot started when Trump attacked Iran and traffic through the Strait of Hormuz started to tighten. That created energy inflation that’s been reflected in tighter economies and tighter consumer spending, worldwide. While ever fuel prices are up and down, it damages consumer confidence, and that’s being directly reflected in expensive commodities like beef
• China’s 55pc tariff on Australian meat has lessened demand from that market, and in turn has pushed more Australian beef into alternate markets, where buyers are acutely aware of the fact, and have endeavoured to adjust pricing accordingly. Our beef trade into China last month was about a quarter of what was seen two or three months earlier
• “When the biggest beef market in the world – China – puts a 55pc tariff on the biggest beef exporter in the world – Brazil – then the global meat trade is going to have problems,” a trusted export meat trader said this morning
• Hitting our Korea Safeguard last month has only served to further tighten export market options, as well as impacting pricing into Korea
• Australian lean manufacturing beef prices into the US have continued to deteriorate since late November, falling about A$2.40/kg or 18pc over the past seven months.
• Brazil at one point earlier this year was pushing 160,000t of beef a month into the China market, but has now filled well above 80pc of its China quota for the year. As a result, Brazil is now flooding 60,000t of beef a month into the US, whereas a couple of years ago, its entire annual exports to the US only reached 100,000t. That’s added significant competitive pressure for Australian beef in the US, even if the quality, shelf-life and other attributes are different.
• The Australian domestic market is also very flat at present, due to lack of consumer confidence, house price declines, fuel prices and uneasiness over their investments.

Saleyards channel

Rain has impacted yardings in some southern states selling centres over the past week.

Naracoorte yarded only 276 head this morning, after handy weekend rain. The market for most descriptions was described as ‘either side of firm.’ The few grown steers sold dearer, while cows were close to firm, with heavy score 3 and 4 cows making from 380-425c and a few lighter plainer types from 331-366c/kg.

Wodonga numbers were halved to 630 head this morning due to the extreme wet conditions across the supply area. Cows again made up almost half the yarding. Heavy steers and bullocks suitable for processors were very good but in limited numbers, the bulk making from 410-544c/kg. The bulk of the heavy cows were firm to 5c easier with the well finished types ranging from 395-438c/kg.

Tamworth yesterday yarded 1410, escaping the rain impact on numbers seen further south. There was steady competition with heavier weight cattle certainly being rewarded. Feeder steers over 400kg improved in quality and in price to range from 540-598c/kg. Prime grown cattle to the processor made from 360c to 454c/kg, with cows 8-10c cheaper across the board. Score 3 cows made from 336-374c/kg and the score 4 heavy cows from 380-399c.

Gunnedah yarded 1550 this morning, down 730. All major buyers were in attendance in a market that saw the few prime heavier weight cattle offered improve, while most other grades were cheaper. Yearling steers to feed lacked quality and were 25c cheaper to make from 482-585c/kg. Score 2 and 3 cows were 15c cheaper, with the 2s making from 348-364c and 3s from 358-370c/kg. Prime heavy cows held firm to make from 380-412c/kg.

There was a much smaller yarding of 7800 at Roma this morning, down 3500 on last week. An interim report (full summary tomorrow) showed yearling steers 330-400kg made to 534c to lotfeeders and 526c/kg to backgrounders almost 15c/kg better. Grown steers 400-500kg sold to 488c/kg to lot feeders, slightly easier. Grown steers 500-600kg sold to 458c/kg while bullocks +600kg topped 440c/kg, almost 10c/kg dearer.