The subdued rate of national weekly beef kill well into October continues to confound many processor stakeholders, who only a few months ago were expecting to be seeing big numbers by this time of year, possibly including the return of weekend shifts.

The National Livestock Reporting Service’s Eastern States kill report for the week ended Friday showed a national kill of 138,281 head.

While that was a solid 17 percent rise on a week earlier, due to the impact of the Queen’s Jubilee public holiday, it is still well short of the +150,000 head weekly kills many were anticipating by this stage in the season.

MLA’s Mid-Year Projections were full of expectation about solid rates of processing during the back end of the year, but with just nine processing weeks left before the annual Christmas closure, prospects are now looking slim, at best, for any serious turnaround.  

MLA built a case for a 1.2pc increase in national kill for calendar 2012, on the basis of much bigger kills July-to-December after a slow start to the year and encroaching dry weather. Other factors were improved road and rail transport conditions after early season flood damage, and additional cattle hitting the market after two years of herd rebuilding.  

Part of the explanation for lower-than-expected kills post winter kills this year is the continuing low rates of female slaughter – a feature which has been a hallmark of the 2012 season. Last week the trend continued, with females in Queensland (the only state where gender data is recorded) again accounting for less than 30pc of plant throughout.

October is often a month when strong female kills are logged by processors, driven by the removal of empties from breeding herds across northern Australia as the last round of mustering kicks in.    

It appears many producers are aiming to squeeze one last calf out of retained breeders, backed by a good body of dry feed – at least in more northern areas.   

Reflecting the moderate flow of slaughter cattle, several large processors lifted their southeast Queensland grids another 5c/kg this week to provide a little more stimulus – on top of a 5/10c rise a week earlier.

Expect to see public grid quotes ex Southeast Qld this week of around 345c for 0-2 tooth grassfed steers, four teeth 340c, six teeth 335c and best cow, 315c.

There is now little difference between grid prices in northern and southern Australia, as normal seasonal influences kick-in. For the first time last week, there were no Victorian processors operating at saleyards centres like Wagga, and southern Queensland processors were making early forays into NSW selling centres like Dubbo to try to pull cattle north. Expect to see more of that in coming weeks.

In some ways, the current modest kills are helpful, in that they are not falling out of sync with particularly flat beef demand being experienced in key export destinations like Japan and Korea.

Australian exports to Japan last month fell a disturbing 20pc compared with September, reaching only 22,600t. As discussed on Beef Central earlier, expectation among some Japanese importers that moves on US beef limitations to allow US beef older than 20 months of age, are delivering a super-cautious attitude among some Japanese importers.

Essentially they are fearful of being caught with beef (either Australian or US) bought earlier, that might look expensive once the trade in US beef 20-30 months of age rolls into action.

Local Japanese export trade participants are telling Beef Central that the reality, in terms of price impact, might be far less than the Japanese trade is hoping for – particularly as the US herd forecast is suggesting another 2 percent drop this year, due to successive droughts.

If there is a price distinction to emerge in Japan following the activation of a 30-month US beef rule, it is most likely to be seen in specialised items like tongues, one trader told Beef Central.

Japan’s importation of beef tongue last year (22,000 tonnes) was about half what it was in 2001, prior to market closure for US beef due to BSE. Specific imports from the US fell to 7000t last year from 29,000t in 2001, whereas the imports from Australia have remained steady at around 9000t since 2007.

Total Australian beef exports for the first nine months of 2012, on the other hand, are steady with the corresponding period last year at 693,000t, with the weaker overall performance from Japan offset by larger shipments to the US and South East Asia.

Recent comments out of the US indicate that Australia is not the only large exporter facing difficult demand conditions in international markets like Japan.

US exports to all markets for August were down 14pc on the same month last year, according to statistics compiled by the US Meat Export Federation. For January through August, US beef exports were 11pc lower than a year ago in volume.

“We face a challenging business climate in several key markets, with rising production costs and slowing economic growth creating some anxiety among buyers,” USMEF chief executive Phil Seng said this week.

“We’re also seeing a surge in domestic meat supplies in some destinations, particularly in South Korea. These are the circumstances in which effective global marketing takes on an even greater level of importance, as producers need to maximise the value of every cut and every carcase,” Mr Seng said.

Last week’s NLRS kill report showed Queensland’s throughput up 21pc on a week earlier to 74,250 head, while NSW was also up 21pc to 33,696 head. Both were impacted heavier by the public holiday the week prior.

Victoria registered a kill of 18,683 head, up 5pc; South Australia was +2pc at 8185 head; and Tasmania was 11pc stronger at 3467.