A BIG price gap has emerged for better slaughter cows between southern states and Queensland since Easter, as southern processors jostle for limited supply.
Cow quotes are proving hard to find among southern physical sales held early this week, but Beef Central understands that prices in some parts of Victoria and southern NSW and South Australia may be 30-40c/kg higher in places than Queensland at present, on a dressed weight equivalent basis.
Heavy cows at Gunnedah this morning sold to processors at rates averaging 277c/kg liveweight in places, or the equivalent of 513c/kg dressed. Leanne Dax reported heavy cows at Wagga this morning gaining 10-12c making from 288-307c/kg, while leaner types lifted 10-15c selling at 270-295c. Compare these rates with current and recent grid offers set out below.
In places, some lines of southern cows have recently made the equivalent of 600c/kg dressed weight, on leg. One Queensland processor recently paid the equivalent of 130c/kg (landed) over its current grid price (490c) on a line of southern cows, worth an additional $430 a head, landed, over prevailing northern cattle prices, to fill an order.
The price shift that has occurred has prompted some early forays by southern processors into ‘Indian territory’ since Easter, chasing lines of northern cows to top-up local kills.
Reasons behind the current strength in the southern cow market remain a little unclear, beyond simple local processor competition for tight supply. Growing export demand from China may provide some of the answer, Beef Central was told (see today’s April beef export summary).
Little change in QLD grids
There has been little change in Queensland direct consignment processor grids over the past week.
Best offers seen from competitive southern Queensland processors this morning have four-tooth grassfed steers at 560-570c for implanted steers (some grids 10c more for HGP-free), and cows 490c. Central Queensland rates are generally 10c less.
Shift location further south, however, and cow money quickly rises.
Plants in southern NSW and South Australia have offers for best cows this week of 510c/kg, while grassfed four-tooth steer is still a little behind Queensland, at 565c (no HGP).
A large northern NSW export plant has offers today for kills week commencing 11 May of 520c/kg on four-tooth grown steer (no HGP), and 500c/kg on heavy cows – both up 50c/kg from the company’s same grid offers made just before Easter.
NLRS over the hooks reports indicate that NSW grid rates last week averaged 538c/kg for four tooth grown steer (down 8c), while best heavy cows averaged 495c/kg (down 8c). In Victoria, over the hooks offers on steers last week averaged 586c/kg, up 3c on the week before, while best heavy cows made 508c, up 2c. SA’s best cows were quoted last week at 515c, no change.
Cattle supply remains tight
May normally signals the start of large cow turnoff as preg testing gets underway in northern pastoral zones, heading into plants in Queensland, Victoria and South Australia. However numbers are described by processors as light, at this stage, as the impact of last year’s drought is seen in rates of cow cull. Overall, processors are not well placed for kills later in May, at this stage.
First light frosts in some districts over the past week have also been reported, which may spark some marketing options as weaning starts and feed quality starts to decline.
Post-Easter kills grow slowly
The first full working week after Easter saw processing numbers grow across most of Eastern Australia, but only moderately.
The week ended Friday saw the five-state eastern tally reach 136,123 head, just 4pc higher than the week before, which included Easter Monday.
Queensland’s kill rose by 9pc to 74,636 head, up 2pc on this time last year. NSW was up only 2pc on the week before to 30,817 head, while Victoria also rose 2pc to 22,321 head. Tasmania was unchanged from the previous week at 4802 head, while South Australia recorded a 38pc decline in throughput to 2545 head.
This current week’s eastern states kill will show a drop in Queensland numbers, with the state’s Labour Day holiday observed in most, but not all northern processing plants yesterday.