Rain – or at least the prospect of it – had little or no impact on rates of kill across Eastern Australia last week, as yet another record seven-day throughput was recorded by the National Livestock Reporting Service.

The Eastern States slaughter tally for the seven days ended Friday reached 167,241 head, another 2000 head up on the previous record set the week before.

The fact it occurred during a week when large parts of eastern Australia were hopeful of receiving some rain relief shows just how deeply entrenched the current drought-driven turnoff cycle has become.

Unfortunately, as a general rule, the best of the rain last week did not fall in the areas that have been responsible for recent heavy supply activity.  

In contrast with the impact on direct consignment, the past week’s patchy rain across parts of Queensland and NSW has had a more significant impact on the store market, with national cattle saleyards throughput week-on-week down by as much as 29 percent.

Queensland saleyards reported by NLRS were back 36pc for the past week, which is no surprise considering the recent weather events. Numbers across NSW followed a similar trend, with consignments declining 35pc, due to the large reduction in throughput from the New England markets. Cattle supply through Victoria was relatively unchanged on the previous week, yarding around 11,000 head.

The Eastern Young Cattle Indicator regained the early losses experienced through January, to jump 15¢ week-on-week, finishing on 307.25¢/kg yesterday.

The biggest effect from last week’s rain, where it did fall, is that it may provide a ‘home’ for some store cattle, where no home existed the week before. Those producers fortunate enough to receive good moisture may now step back into the market, to try to begin a recovery process. Agistment may also start to reappear, where there was none a week or two earlier.      

Kills in all reported states were well up last week, relative to this time last year.

Queensland, at 83,989 head, was easily the highest kill this year, and within sight of two extraordinary record-setting weeks in May last year. The figure was up 1pc on the week previous, and +9pc on this week last year. Helping lift the momentum further in Queensland was the return to work after a maintenance break of Nippon Meat Packers’ Mackay plant, adding another 5000 for the week to the Queensland tally.

In NSW, last week’s kill went within a whisker of 40,000 head (39,343) – a number exceeded in the record books only by a +40,000 head kill in mid-December, and a horror period of extreme drought kills back in 2006. Last week was 15pc above this time a year ago for NSW.

The NLRS also logged big numbers for Victoria, where the seven-day kill reached 28,813 – back 3pc on the previous week, but a massive +21pc up on a year ago.

South Australia and Tasmania also logged bigger numbers, killing 9419 head and 5077 head respectively – both 11pc higher than this time on 2013.

All Queensland processors spoken to this morning said they remain under heavy supply pressure, despite some of the biggest early-season kills seen in history, since January. Many remain heavily booked well into March and April.

Public grid offers for SEQ slaughter this morning were around 330-340c/kg for 0-2 tooth heavy grassfed steer, 320-335c/kg for 4-tooth, and best cows anywhere from 285c-305c/kg. Lighter cows are obviously being priced more severely. In grainfeds, we found 100-day YG steer at 365c, and 70-day MSA steer at 350c, for boning groups 1-8.

As highlighted in Beef Central’s report on Friday over live export developments, there is an unusual phenomenon occurring in Queensland grids at present, bought on by strong demand pressure for cattle from live exporters.

Grid prices for four-tooth grassfed steers in Townsville, last week, for example were around 350c/kg. That’s about 10c/kg better than Rockhampton, where prices on Friday for the same animal were 340c/kg, while Rocky was in turn 5c/kg better than the best southeast Queensland plant quote of 335c/kg.

Apart from some end-of-season or start-of-season weeks where processors sometimes throw out some bigger money in the north because of rain disruptions, this pattern is probably unprecedented. Townsville, historically, is never better than southeast Queensland, and often well behind.

It’s a symptom of one thing: competitive pressure from live exporters frantically filling boats, which is echoing down the Queensland coast from north to south.

EU prices strong

An interesting segment to watch at present is EU steer, particularly grassfed.

One SEQ processor lifted rates for EU steer to 380c/kg this week, up 10c, while another quoted 390c to Beef Central yesterday. The reason is it’s getting close to the end of the EU quota shipping year (March 31), with Australian exporters keen to fill their quota entitlement.

Another factor, because of the drought, has been a lot more EU-eligible cattle going onto feed, now destined for the market’s high-quality grainfed quota, rather than the Hilton grassfed quota, where they may have been originally intended. That’s making grassfed EU relatively scarce, a source said.

In contrast, the grid price for HQ grainfed steer is around 430c/kg, while feeders are making 210c/kg.

That may sound like a big split between grain and grassfed ox prices for the EU, but there’s one critically important factor to keep in mind: there’s a 40pc tariff applied on the grassfed quota exports, while the newer grainfed quota, crucially, attracts a zero tariff.

As a result, EU-eligible Australian exporters can afford to pay considerably more foir grainfeds.