Processing

Weekly kill: Slaughter grids push deeper into record territory

Jon Condon, November 10, 2020

CONTRARY to all expectations, processor direct consignment slaughter grids have risen to new record heights in Queensland this week, as the industry starts to think about some procurement breathing space around Christmas holiday closures.

Competitive grids in Southern and Central Queensland this morning showed offers of 615c/kg on heavy cows – easily an all-time record price – representing a value of $1968 on a typical full-mouth cow 320kg dressed weight, before discounts.

Today’s cow price jumped another 15c on the previous high of 600c set three weeks ago.

Steers have shown similar movement, with the benchmark four-tooth grassfed ox +300kg this week at 680c/kg (some of those offers HGP-free only), up another 10c on last week. That’s also a new record high for steers, having never previously eclipsed 670c/kg.

The latest jump comes despite any real recent rain impact across the state’s cattle catchment area, with many Queensland cattle regions off the coast receiving only light, patchy rain, at best, since early October.

Queensland’s direct consignment offers are now considerably higher than southern states, with some clear evidence of slaughter cattle starting to move north out of central, northern and southern NSW into Queensland sheds this past week.

Current public grids from plants in southern NSW and eastern parts of South Australia have best offers for steers this week at 635c and cows at 580c/kg – a 45c and 35c discount over today’s Queensland rates – more than covering the freight cost to transport those cattle north to slaughter.

Despite the financial inducement, northern processors are certainly not being bowled over with bookings – in fact most are struggling just to maintain minimum weekly kill numbers to keep their doors open.

Having said that, it’s not unusual for southern cattle to find their way into southern Queensland processing plants at this time of year.

An important secondary factor in current market settings is the need among operators to try to preserve core processing jobs until later into the year. Any early closure would inevitably see skilled slaughtermen and boners drift away from the meat industry to other fields of employment, making it that much harder to recommence operations with any vigour in early 2021.

The latest advance in price reflects the sheer struggle processors are encountering in trying to put together late-season kills at the end of a 2020 year characterised by severe slaughter stock shortage.

On top of that, saleyards prices – themselves a reflection of the battleground processors are in trying to source stock – remain ahead of equivalent direct consignment rates this week. Western bullocks sold at Dalby last week made 390c/kg liveweight, the equivalent of close to 700c/kg dressed, while cows offered at multiple eastern states sales in the past week have made the equivalent of 620c/kg dressed.

Losses on ‘almost any slaughter animal’ this week are well in excess of $200 a head, one processor contact told Beef Central this morning.

A rising A$ value, which has jumped US2c since the start of November on the back of the US election result, has also made headwinds harder for red meat exporters, in what is already a highly competitive international marketplace.

Grinding meat prices, while mounting a modest rally over the past fortnight, remain around 16-month lows, with US imported 90CL cow beef quoted this week at A646c/kg CIF.

Christmas closures

More eastern states export processors are now starting to set dates for seasonal holiday closures at the end of the year. Thursday, 18 December is proving a popular choice for last day’s kill, following by the last boning room shift on Friday 19 December. Kills early the following week are impractical, because it provides little or no time for load-out before Christmas, Beef Central was told.

Some Queensland plants plan to return to work on Monday, January 4 2021, subject to rain.

We’ll try to pull together a summary of plant closure and new season opening dates in coming weeks.

There was no NLRS weekly kill data available by the time this item was posted. Stats will be added later, when they become available.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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