WITH just five full kill weeks left before the customary Christmas/New Year seasonal processing closures start, what happens to slaughter access if the current drought-driven supply of cattle is not interrupted by rain?
It’s a question stakeholders are beginning to ponder.
At current rates of weekly slaughter, well above 170,000 head – much of it driven by urgent need to exit females and other cattle as the drought impact grinds on – a two or three week closure in large export sheds Queensland and northern NSW could potentially create an enormous backlog of cattle looking for a kill slot, if it doesn’t rain.
Most large Queensland plants spoken to this week indicate they are anticipating their last killfloor shift this year on Thursday, December 18, and last boning shift Friday, December 19.
Barring widespread rain, many plan to re-open Monday January 5, with others not anticipating a 2015 season start until at least the week after that.
The obvious question is, couldn’t processors simply limit this year’s seasonal closure to the gazetted public holidays, and kill on, to keep up with demand?
It’s not a simple as that, processors suggest.
- Firstly, each company has long-standing commitments to employees over the timing and duration of the Christmas break that would make it difficult, if not impossible to over-ride, with holiday travel and accommodation arrangements already booked.
- Secondly, the traditional summer ‘wet season’ closure is often used for annual maintenance and plant upgrades. This year again, several plants have indicated to Beef Central that they have major engineering works booked in, including boilers and heavy infrastructure that are not only impossible to postpone, but will require lengthy closures in order to complete.
- Thirdly, there is the fatigue factor among staff. Many plants across Eastern Australia have been operating at, or above capacity for the past nine or ten months, with Saturday kills and overtime commonplace. It means staff are exhausted, and will be badly in need of a decent break, come December 18, managers say.
All this means there is little prospect of processing activity for a fortnight-plus in the north, beyond those dedicated supermarket supply chain sites like Australian Country Choice, Churchill/Brismeats (Woolworths) and several others.
What’s happening now is that a log-jam is starting to happen, with most large Southern and Central plants now heavily booked into December. At least one has stopped quoting this week, confident that it has it’s roster well-covered for the next three to four weeks.
As Beef Central has pointed out earlier, adding to the congestion has been the high turnoff in grainfed cattle out of feedyards, that do not have the flexibility in slaughter timing that grassfed cattle do. Once they’ve done their time, grainfed cattle have to go, or they start costing lotfeeders money.
This morning’s companion article, “Grainfed cattle numbers hit eight-year high at 908,000 head” illustrates how this competitive element for available kill space is perhaps getting worse as the year ends, not better.
Last week’s seven-day Eastern States slaughter complied by the National Livestock Reporting Service showed a five-state kill of 172,279 head, down about 500 head on the week before.
Queensland and NSW throughput rose 5pc and 4pc respectively, perhaps including some catch-up for a day lost the previous week due to a butcher’s picnic holiday at some sites. Queensland hit 87,077 head, still up 10pc on this time last year, while NSW reached 41,940 head, still close to a weekly record, and +9pc on this time in 2013.
Victoria was the odd man out last week, with slaughter falling about 5000 head for the week to 29,249 head. The reason? Many Victorian plants take the first Tuesday in November off each year, for obvious reasons.
Despite the 14pc drop in numbers, week on week, the kill was still 16pc above where it sat this time a year ago.
South Australia poked its nose above 10,000 throughput for a second time in a month, logging 10,032 head, heavily influenced by more drought cattle being sold off. The figure was +10pc year-on-year. Tasmania killed 3981 head for the week, up 2pc on the previous year.
September statistics reflect severe drought conditions
During September, Australian cattle slaughter continued its unprecedented run, with the ongoing drought conditions offering many producers little option but to offload stock.
Adult slaughter was 800,000 head, up 12pc year-on-year, taking the number of cattle killed for the first nine months of 2014 to just below seven million head – up 12pc from last year’s already high base.
The number of females accounted for in the adult kill eased to just below 50pc, at 395,000 head – historically, however, in September, females usually account for 43pc, reflecting the extent of the current female liquidation.
Female slaughter in Queensland (185,771 head) and NSW (90,330 head) during the month were dramatically higher, up 40pc and 42pc year-on-year, respectively.
With cattle slaughter significantly higher, so too was beef production, with the September volume up 11pc year-on-year, to 220,421t, taking the volume for the first nine months to 1.9 million tonnes cwt, up 10pc.
Looking forward, given the unwelcome three month rainfall outlook for most key cattle producing regions, it is likely Australian beef production will remain high at least until the end of the year, MLA said.
Grids under pressure
While most southeast Queensland processor grids remained unchanged for the seven days ended yesterday, cattle supply pressure is continuing to mount, and one large multi-site processor reduced its grids by 10c/kg this week, in response. Others said offers would be reviewed daily, but another processor is not offering a price on direct-consignment cattle at present, being well covered for the time-being.
Most physical cattle sales held early this week in the three eastern states showed bigger numbers on offer due to drought turnoff, MLA’s Tuesday cattle summary reported.
Numbers at Toowoomba Elders sale increased 41pc, to 1132 head, as the hot and dry seasonal conditions continue throughout key cattle supply regions. Medium C3 yearling steers to feeder orders eased 3¢ week-on-week, to average 192¢, while light C2 yearling heifers to feed were back 1¢, selling from 160¢ to 194¢/kg. Medium C2 grown steers sold to lotfeeders 3¢ dearer on 176¢, and heavy D4 beef cow grades improved 2¢ from last week, to average 176¢/kg.
There were 4pc fewer cattle yarded to the previous sale at Tamworth, at 1892 head, with quality a contributing factor to some price variations, as the usual buyers were in attendance. Medium C2 yearling steers to feed averaged 3¢ higher than a week ago, making between 174¢ and 205¢, while the equivalent heifer portion also increased 3¢, to average 177¢/kg. Heavy C3 grown steers to slaughter orders were up 7¢ week-on-week, selling from 180¢ to 203¢, while medium D2 cows to processors increased 7¢, to average 128¢/kg.
Consignments at Wagga increased 18pc week-on-week, at 4145 head, with secondary cattle well supplied which sold to mixed trends from buyers. A large yarding of yearling steers saw heavy C2 lines to feed decline 2¢, making from 172¢ to 202¢, while heavy C3 yearling heifers to slaughter eased 1¢, to average 173¢/kg. Heavy C3 grown steers sold to processors 1¢ lower than last week on 182¢, while heavy D4 beef cows were back 4¢, ranging between 142¢ and 161¢/kg.
- At the close of Monday’s markets, the Eastern Young Cattle Indicator reached 343.5¢/kg, down almost a cent on Friday.
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