Weekly kill: Rise in numbers may have peaked

Jon Condon, 22/11/2016

EASTERN states beef slaughter rates continued to rise last week, but some doubts are now starting to emerge that the recent lift in slaughter activity will in fact be sustained through to Christmas break.

MSA grading 3 - CopyThe National Livestock Reporting Service logged an eastern states kill of 136,134 head for the seven days ended Friday, a further 2pc rise on rates seen the previous week.

That continues a strong run experienced since mid-October. The past four weeks has produced eastern states weekly kills averaging 132,900 head, a sharp 18pc increase of 20,000 head per week from 113,400 head/week killed over the previous four-week period.

But both saleyards and direct consignment books are again looking like slowing during the back end of November, agency and processor contacts indicate.

Some Queensland processors who just a week or two earlier were delighting in the fact that they had kill slots more or less covered for the next fortnight are now much less well positioned for the weeks ahead.

It’s possible the surge in numbers from mid-October forecast earlier may in fact run out of steam.

“Maybe the bigger run of cattle that we’d all predicted pre-Christmas has now run it race, and perhaps the depth was not as big as we’d anticipated,” one regular processor contact said this morning.

“It’s not uncommon for hard-going in the run from now through to pre-Christmas – especially if it gets particularly hot,” he said. “Vendors that normally offload three or four decks of odds-and-ends at the end of the year are this year battling to find a deck or two,” he said. “They’re booking half the numbers of ‘cleanup’ cattle for late November slaughter that they normally do.”

Both Dalby sale today, and Roma yesterday were well back on numbers, as oats-finished cattle all but disappear from the system and the last of the Channel country bullocks looks to have been consigned, in the face of hot weather across large parts of eastern Australia. Just a week ago Dalby was still yarding consignments of good heavy bullocks from the far west, but that supply now appears to have slowed considerably.

The labour commitment involved in the big grain harvest may be another factor restricting flow of slaughter cattle from mixed farmers at present, processors say.  Harvest was one of the reasons offered for a similar declining trend seen at Wagga sale yesterday, where numbers were back to 3490 head.

After a series of grid price corrections since late October, Queensland over-the-hooks quotes seen this morning have remained unchanged on this time last week.

Best offers from large Queensland export processors for kills in coming weeks were 535-540c/kg for grassfed four-tooth ox, and 480-485c/kg for heavy cows.

A large northern NSW processor has offers this week for delivery week commencing 12 December of 520c for the four-tooth ox (no HGP) and 470c/kg on heavy cows.

One of the only positives on the horizon is the performance of the A$, which has fallen about 3.5c since Thursday last week, mostly in response to a strengthening US currency, based on Trump policy signals. That’s adding some benefit in Australia’s competitiveness in the grinding beef trade into the US.

Queensland’s kill this week was unchanged on the previous cycle at 70,000 head, while NSW numbers were 4pc higher at 31,800 head. Victoria’s kill reached 21,650 head, up 3pc, while South Australia was down 7pc to 8000 head. Tasmania showed a 39pc leap as a major processor got back to work after a week off, accounting for 4700 head.




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