SOME of the biggest slaughter cattle price increases seen since the 2022-23 era when cattle supply was greatly hampered by herd rebuilding have been seen this week.
Queensland direct consignment processor grids have lifted 30-40c/kg in the past seven days, reflecting a rapid turnaround in supply dynamics. The same trend is evident in saleyards price movements in the past week, with some blistering price rises seen in some slaughter lines, on the back of fewer numbers.
Some saleyards heavy cows sold this week and last week have gotten back to 440c/kg liveweight. Some estimates suggest the best of the saleyards bullocks sold in recent days would represent 880c/kg dressed weight, at plant.
The NLRS processor cow indicator today sits at 390c/kg – having risen a dollar a kilo from 293c only five weeks ago (see graph below). Today’s cow indicator level was last seen briefly in November last year, before drifting lower over the next five months as heavy cows turnoff due to drought unfolded. With that cycle now over, cows are again in very tight supply.
The last Wodonga sale contributed almost 1000 cows to the processor cow indicator, averaging an incredible 429.59c/kg liveweight.
Some Queensland processors are this week reporting substantial kill slots available as early as next week, as recent rain and other factors influence cattle availability.
Market watchers suggest that some cattle previously booked for direct consignment on space only (no price attached) with Queensland plants have now been re-directed into saleyards, given recent price movements.
It’s not that uncommon for saleyards to leap ahead of over the hooks rates for short periods in a rapidly rising market like that we’re seeing this week.
That’s left some processors – particularly those that do not have a large grainfed supply around which to build other kills – in a sharp deficit situation.
Tax management is coming into the equation for some cattle vendors, with June 30 now only a little more of than three weeks away, meaning some producers are now holding cattle back for the new financial year.
Constant competition in Queensland from southern processors is another factor, but some are now asking how long that can continue, give the enormous freight cost attached to transporting those cattle home, on top of a sharply rising market.
Losses for southern processors operating on Queensland cattle are inevitably mounting, suggesting southern plant closures or fewer working days may be very close.
“They’ve got to be tearing up large sums of money on every northern steer or cows shipped back to Victoria, especially when the 60c/kg freight cost is added,” one northern meatworks buyer said.
“Our guys are shaking their heads watching what’s going on – like they’ve got water in their ears,” he said.
Some think the current grid price rises in Queensland are an attempt by the locals to drive the southern competition out of the market, but with widespread rain in some parts of southern Australia, that’s looking unlikely.
Southern Queensland processor grids seen this morning show some dramatic 30-40c rises, with good quality heavy cows now making as much as 740-750c/kg on heavy cows. Heavy grass steer four teeth are quoted as high as 820-840c/kg this morning.
Central Queensland supply is less challenged with rates this week anywhere from 20-40c/kg behind competitors in southern regions of the state. However some individual private paddock deals have unfolded in CQ in recent days at rates much higher than that. One report suggested 750c/kg for heavy cows delivered to one of the three CQ export sheds.
In southern parts of NSW, some export processors have reasonable supply on hand, and have left grids unchanged from last week. Eastern regions of South Australia showed heavy cows as high as 800c on MSA-eligible cows this morning, +20c on last week, and four-tooth grass ox also +20c on 880c/kg up 10c.
Disconnect happening from meat prices
At the same time at cattle prices are surging, export beef market prices are trending in the opposite direction heading towards mid-year, creating some considerable disconnect from livestock prices.
Global export meat values under pressure in the lead-up to China’s 55pc tariffs being triggered some time later this month, which will push more beef (both Australian and Brazilian) into alternative markets like the US and Indonesia. In Australia’s case that also extends into Japan and Korea, but at this time, at least, Brazil does not have access to those markets.
Australian 90CL trimmings prices into the US in A$ CIF terms have declined from their record high above A$13.00 in November to $11.24 last week, down $1.76/kg or 13pc. Those prices only look like falling further heading into the new financial year.
Saleyards channel:
Numbers contracted substantially in many selling centres early this week due to recent rain, leading to some hefty price rises in many categories.
Numbers significantly decreased at Gunnedah this morning – back to just 850, 1650 less then the previous week, mostly better quality weaner and yearling types. All major buyers were present for an overall much dearer market. Prime cattle to the processor were limited and ranged from 440c to 506c/kg. Yearling steers and heifers to feed were both 50c dearer and more in places, with the steers making 510-584c to average 559c/kg and heifers 450-564c. Cows were in short supply, with score 2s and 3s making 350-420c/kg and prime heavyweights from 416-437c/kg.
Tamworth yarded only 1139 head yesterday, about half the numbers seen the week before. It was an improved quality yarding of predominately yearling cattle and cows. All major buyers were present for an overall much stronger market. Prime grown cattle to the processor were 15c to 20c dearer. The steers made from 400-498c/kg and the heifers made from 328-486c/kg. Score 2 and 3 cows were 5c to 8c dearer, with score 2s making from 270-345c and score 3s 355-383c, and heavy cows 15c dearer from 400-438c/kg.
No interim Roma report was available at time of publication – full report tomorrow.
its a real positive seeing prices jump like this. Is it because cattle numbers are dropping on the back of record numbers being killed. Processors are still pushing for supply and paying the price. Despite all the costs they are still reporting record profits.
So my question is do all the beef exporters like JBS and Cargrill who export to their own companies in the US, make more profits out of australian beef when its sold in the US, than what they do here.