A RING around some of the nation’s largest red meat wholesalers this morning confirmed that mid-winter trade in grilling cuts is tough enough, but slow cooking items are in very solid demand.
Beef consumers tend to put away the barbecue when temperatures drop, replacing it with the slow cooker, and the mid-winter wholesale market is again reflecting that trend. Grilling cuts, perhaps with the exception of rumps, are at least $2-$3/kg off the pace from where they sat three or four months ago at the end of summer.
The wholesale market in Sydney, Melbourne and Brisbane has good quality YG-type MSA striploins declining from around $15/kg at the start of winter to $13/kg this week, with a few cheaper examples in places. Equivalent cube rolls have held up in price a little better, easing from around $21/kg to $19/kg wholesale this week.
Rumps, especially smaller examples, have not shifted as much heading into winter, with decent examples still $10-$11/kg.
“Rumps have been the value item in the wholesale market for the whole April-May-June period, meaning they have not fallen as far as other cuts,” one large multi-state wholesaler contact said this morning.
“Demand remains flat for loin cuts, but it’s not exactly doom-and-gloom in the market at present. It’s fairly traditional to see price dips like that for grilling meat at this time of year. Quality seems to be holding up better for grilling cuts than what many might have anticipated – given the seasonal conditions – but a lot of the non-grainfed grilling cuts have come off cattle that probably received significant grain or fodder assistance in the paddock.,” he said.
Surprisingly, there was not a lot of evidence of more grainfed meat, and less grassfed in the domestic wholesale market at present, especially for loin cuts. Some wholesalers suspected that was because more grainfed loin cuts were now tied-up with ‘program’ trade.
“But there’ not a lot of that grassfed meat around, on a week to week basis, especially at the quality end,” one contact said.
Adding to that, it was still too early for wholesalers and customers to be taking positions on supplies of grilling cuts for sale once demand starts to lift, with the onset of warner weather.
Briskets benefit from ‘Texas BBQ fever’
In contrast, secondary cuts are still in strong demand as consumers fire up the slow-cooker or casserole pot over winter. Briskets continue to be a shining light in the non-grilling cuts market – powered in part by the Texas barbecue slow-cook movement, but also the brisket’s ability to go into the grind, producing a 75-80CL product without the risk of gristle. Good YG examples have been making mid to high 8’s in the market and in places a little stronger, depending on the brand and quality.
Chucks continue to sell strongly, as they have all year – making much the same price as briskets. That’s partly because of the firming trend in the lean grinding beef export market, where chucks may be diverted for the hamburger trade.
Strong export demand out of markets like China meant there were very few chucks from older animals or culls cows remaining on the domestic market this year, one wholesaler said.
“It means that if you are going to buy chucks on the domestic wholesale market, they are going to be decent quality, so you’re going to have to pay the money,” he said.
Topsides are dearer, selling in the 9’s and 10’s this week for good examples, and lean manufacturing beef has also firmed over the past few weeks, with 90s tracking the US price trend.
Several traders said 90CL beef was very limited in the domestic market at present, with several sizeable bids evident in the market that might not see an offer until September.
“If you are looking for decent volumes, you just can’t buy 90s for August at the moment,” one trader said.
However several wholesalers told Beef Central that with only a week’s trading left in July, many stakeholders were ‘wary’ of the prospect of an early start to spring turning customers off slow-cooking cuts early this year.
“Their worried about winter ending suddenly, and getting caught with large stocks of secondary cuts that suddenly get harder to shift. For this reason many are now starting to run down their stock, and do not plan to re-load.”
Stocks levels are low
The general impression from wholesalers spoken to for this report was that stock levels are quite low at present, with most stakeholders waiting for a bit of market direction to emerge.
“They are in two minds at present – if it starts to warm up early they might got stuck with stock that is harder to shift. But equally, wholesalers know that if there is any substantial general rain, supply for the domestic wholesale market could get very tight, very quickly.”
“The rain would not even have to be that widespread for the trade to start factoring it in to their buying strategies. But everybody knows that beef at some point will become very hard to get.”
One contact said traditionally, a ‘bit of a window’ emerged during August to buy grilling cuts in preparation for the start of the barbecue season demand around September. “But it’s just a little early for anyone to get involved in that just yet,” he said.
Underpinning the whole domestic wholesale market this year has been dramatic growth in emerging export beef markets, like China.
“Barring any dramatic turnaround in supply due to weather changes, all of our domestic wholesale price cues for the back half of this year are going to come from the export trading desks,” one wholesale told Beef Central.
“We’re hearing various reports about mounting cold storage challenges in the China market as imported beef and other proteins grows, in response to the impact of African Swine Fever. But if volumes continue into China as they have been, it will be a litmus test for domestic beef later this year.”
“There’s no doubt that the growth of trade into China has put pressure on the domestic market, as well as putting the Japanese and Koreans on notice, creating some greater competitive tension.”
China was also impacting premium specialty beef lines like Wagyu, with surplus product that once got pushed back onto the domestic market in short bursts now often being frozen-down and shipped to China. Wagyu loin meat was particularly limited in the domestic market at present, one trader said.
Some exporters with the capacity and license access to ship chilled Wagyu product to China were in fact freezing it down, to avoid cold-chain constraints at the other end – because frozen beef was ‘much more forgiving’ than chilled, in a market with limited cold chain infrastructure.