Processing

Weekly kill: Weather, trimmings demand pushes grids higher

Jon Condon 09/07/2024

DIRECT consignment slaughter cattle grid prices have lifted across eastern and southern Australia this week, partly in response to weather-related supply challenges, but also the growing demand for trimmings and manufacturing meat offshore.

Where some processors were three or four weeks forward in over-the-hooks bookings only a fortnight ago, many are now much more current.

A key feature at present is the vigorous presence of a large contingent of southern NSW and Victorian processors active in the Queensland market to prop-up meagre cattle supplies at home – and in some cases venturing as far as the Northern Territory to secure stock.

Many grids up 20c/kg

That additional paddock and saleyard competition has pushed direct consignment prices higher across Queensland.

Many grid offers from southern Queensland processors have jumped 20c/kg on this time last week, as a result. Best offers seen this morning included heavy well conditioned cows at 450-470c/kg, and heavy grass export weight steers, four-teeth, with implant, at 530c/kg.

Central Queensland plants are 10-20c behind those rates. Some observers suspect the Queensland slaughter market might be 10-20c/kg cheaper than it is this week, if it was not for the strong southern bidding support evident at most sales and in the paddock.

Winter last year was a different story, with drier than average conditions across parts of southern Australia pushing more local cattle to market, and moderating southern buyer interest in Queensland during the cold months, with the added freight burden.

In southern states, direct consignment prices have also risen sharply in some grids this week, with good cows in southern NSW this week exposed to grid offers of 540c/kg, and four-tooth steer at 620c. Further southwest into South Australia, good heavy cows are even higher, quoted this morning at 550c/kg, and grass ox 620c.

Both reflect the current shortage of good killable cattle in southern regions, in addition to recent rain.

Weather

Weather has also had an impact.

Over the past seven days there have been widespread falls of 15-75mm across large areas of western, southwestern and southern Queensland; the northern half and eastern regions of NSW; and the eastern half of South Australia. See tomorrow’s weekly rainfall summary.

Combined, they have created some challenges in supply of booked slaughter cattle that have left meatworks buyers on their toes this week.

One Queensland multi-site processor described the current procurement and delivery environment as ‘tough,’ with a lot of holes to be filled in rosters as cancellations rattled in.

No shift cancellations have happened so far, from what Beef Central has been told, but there’s been plenty of filling-in required to keep chains full. Several large consignments from Queensland’s far west were delayed, and are unlikely to ship for at least a week or two, one operator said. Lack of evaporation due to winter conditions will only delay the process further.

Demand factors

Lean frozen imported trimmings into the United States hit a new record high of A969.5c/kg back in late April, and have remained well above 900c/kg since then, despite a strengthening Aussie dollar.

The 90CL frozen trimmings market into the US last week was worth 933c/kg – up around 143c/kg on the same week last year. That goes a long way to explaining the current strong momentum in cull cow saleyards and direct consignment prices.

As highlighted in the saleyards wrap below covering sales held yesterday and this morning, there was a pronounced lift in cow prices across the board – with one stand-out pen at Naracoorte this morning making an outrageous 332c/kg. At a 51pc dressing percentage, that values those cows at 677c/kg dressed weight, or even at 50pc dressing, at 664c. At those prices, somebody was clearly desperately short to fill an order.

AusMeat consistently insists it doesn’t happen, but some are wondering whether cows bought at prices like that end up in a steer carton.

Slaughter remains above 140K

Last week’s national beef kill reported by NLRS for the week ended Friday fell 2.5pc to 140,079 head, but the previous week hit numbers not seen since January 2020, towards the end of the 2019-20 drought.

National female slaughter remained high at 51.83pc last week, but there is always a seasonally high component to cow slaughter at this time of year.

Further evidence of the trends in female slaughter cattle movements was seen in the past two weeks’ Victorian kill statistics, where 78pc of adult cattle slaughter was made up of females. While local dairy and other cow turnoff explain part of that, a significant portion has to be Queensland-bought cows shipped south to supplement tight local slaughter cattle supply in Victoria, southern NSW and eastern regions of SA.

Saleyards trends

The NLRS National Processor Cow saleyards Indicator was sharply higher last week, lifting 28¢ to 244¢/kg liveweight. Demand from processors drove the price through Queensland, with most cows at Dalby last Wednesday being sold to southern states.

Competition for quality-conditioned cattle increased the general market. Victoria came in with the highest indicator prices for heavy steers, sitting 15¢ above the national price, driven by constricted supply through saleyards.

Most saleyards showed a strong upwards price trend in cow prices again early this week.

Gunnedah yarded 1635 this morning, with cows and heavy grown processor heifers showing much dearer trends. Cows trends improved with medium weights making to 250c/kg and heavy cows to 22c/kg dearer 260-299c/kg.

Wagga yarded 3100 yesterday, with the export market a highlight, with impressive prices for bullocks and cows. Heavy bullocks saw a notable uptick of 74c, selling from 288-380c/kg. Heavy steers experienced a significant jump of 29c, prices ranging from 295-374c. In the cow market, prices climbed as the sale progressed, increasing by 30-35c. Heavy cows sold from 280-308c, while the middle run of leaner types ranged from 208-275c.

Naracoorte this morning yarded 708 head, with heavy well-conditioned cows improving 40c/kg in places, selling from 288-332c/kg, and medium weights 160-285c.

Wodonga this morning yarded 1090 head, with the supply/demand function in full swing, with well finished cattle paid premium prices. The export market was a big highlight, driven by stronger demand and  prices for bullocks and cows. Heavy bullocks saw an increase of 40c, selling from 330-380c/kg. Heavy steers were unchanged for quality types, making from 330c to 380c/kg. In the cow market, prices rose as the sale progressed with dearer rates achieved for good clean cows weighing more than 700kg. Heavy cows lifted 18c selling from 293-318c, while leaner types ranged from 214- 280c/kg.

A preliminary Roma store market report suggested a yarding of 6500 this morning, with grown steer and bullocks between 10 and 25c/kg higher. Cow markets will be reported in the full summary tomorrow.

 

 

 

 

 

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Comments

  1. Ted Watkins, 10/07/2024

    Gee it wasn’t that long ago that we were told that there was an avalanche of cows coming out of qld and “We’re booked out till late August” and we’ll have to pull the price !
    Oh of course it’s “The weather” you don’t have to be cynical be it sure helps.

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