Beef ex­ports up­date

The Northern Star - Northern New South Wales Rural Weekly - - INSIDE ABOUT YOUR RURAL WEEKLY -

ON­GO­ING drought and a poor rain­fall out­look have seen 2018 Aus­tralian beef pro­duc­tion fore­cast to fin­ish 6 per cent up on 2017 at 2.3 mil­lion tonnes car­case weight, ac­cord­ing to Meat and Live­stock Aus­tralia’s Cat­tle In­dus­try Pro­jec­tions Oc­to­ber up­date. El­e­vated lev­els of adult cat­tle slaugh­ter through­out win­ter and early spring has driven the in­crease, with Aus­tralia’s na­tional adult cat­tle slaugh­ter for 2018 fore­cast to reach 7.8 mil­lion head, 9 per cent higher than 2017.

MLA’s market in­tel­li­gence man­ager, Scott Tolmie, said while Oc­to­ber brought use­ful – though not drought-break­ing – rain to parts of the east­ern states and re­stored some con­fi­dence to the store cat­tle market, wide­spread fol­low-up rain was needed for any last­ing ben­e­fit to pas­tures and crops.

“De­spite poor prospects for pas­tures en­ter­ing into 2019, slaugh­ter num­bers will be­gin to be con­strained by a shrink­ing pool of avail­able cat­tle,” Mr Tolmie said.

“The fe­male slaugh­ter rate has risen to lev­els not seen since the last drought in 2015, though notably, this time off a lower base herd, which will have reper­cus­sions for cat­tle sup­ply and pro­duc­tion in com­ing years.

“Typ­i­cally, the Aus­tralian cat­tle herd con­tracts when the pro­por­tion of fe­male slaugh­ter ex­ceeds 47 per cent of to­tal slaugh­ter – a thresh­old first sur­passed in May and the fe­male con­tri­bu­tion to the kill has in­creased since.

“The high per­cent­age of fe­males con­tribut­ing to slaugh­ter con­tin­ues to put pres­sure on na­tional av­er­age car­case weights. Pro­jected na­tional car­case weights have now been re­vised down­wards, to 290kg/head for 2018.”

Mr Tolmie said the start of the north­ern wet sea­son marked a piv­otal time, es­pe­cially this year.

“In 2018, the East­ern Young Cat­tle In­di­ca­tor has traded at a dis­count to the fin­ished market since April, as wors­en­ing sea­sonal con­di­tions de­ter re­stocker buy­ers,” Mr Tolmie said.

“More re­cently, rain­fall in some key east­ern pro­duc­tion re­gions saw the EYCI break through the 510c/kg car­case weight mark on Oc­to­ber 17. Look­ing for­ward, fol­low-up rain could see de­mand for young cat­tle spike, par­tic­u­larly fe­males.

“How­ever, the con­tin­u­a­tion of dry con­di­tions or just one-off rain­fall events would likely see an­other wave of

de­stock­ing, es­pe­cially in the north, plac­ing fur­ther down­ward pres­sure on prices.”

Mr Tolmie said fin­ished cat­tle prices strength­ened in the Septem­ber quar­ter, sup­ported by solid ex­port


“In­creased beef pro­duc­tion, a softer Aus­tralian dol­lar and ro­bust de­mand fun­da­men­tals, par­tic­u­larly in es­tab­lished Asian mar­kets, has un­der­pinned a 9 per cent in­crease in fore­cast beef ex­ports in 2018, to 1.1 mil­lion tonnes shipped weight.

“De­spite in­creas­ing global com­pe­ti­tion, beef ex­ports for the calendar year to Septem­ber grew 12 per cent year on year, to 840,500 tonnes swt. On the back of record grain-fed cat­tle turnoff, ex­ports to Ja­pan and Korea have recorded in­creases of 7 per cent and 15 per cent, re­spec­tively.

“Ex­ports to China in the first nine months of 2018 surged 55 per cent year on year, while ship­ments to the United States were slightly down.”


BEEF OUT­LOOK: Slaugh­ter num­bers in 2019 will be con­strained by the shrink­ing pool of cat­tle, says Meat and Live­stock Aus­tralia’s market in­tel­li­gence man­ager Scott Tolmie.

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