North-south di­vide for beef cat­tle price

Warwick Daily News - South West Queensland Rural Weekly - - Find A - Jenny Kelly news@ru­ral­

A STRONG link be­tween cat­tle prices and sea­sonal con­di­tions has been on show this March as the north­ern mar­ket steps away from the south.

It is ev­i­dent in the lat­est price re­sults for ex­port slaugh­ter cat­tle, with Queens­land prices lift­ing above year-ago lev­els af­ter rain fu­elled im­prove­ments of up to 20c/kg.

In the south, NSW and Vic­to­ria sa­le­yard prices are still flat-lin­ing be­low the lev­els of early March 2017.

The dis­par­ity was queried by a north­east pro­ducer last week, who in a nut­shell, had been hop­ing the rain in Queens­land and parts of NSW would have pro­vided a big­ger price rally for heavy steers and en­abled him to trade out of some ex­pen­sive store cat­tle bought more than 12 months ago.

The lat­est sa­le­yard av­er­ages, as cal­cu­lated by the Na­tional Live­stock Re­port­ing Ser­vice, high­light the cur­rent north to south price di­vide:

At the close of trad­ing last week:

The price in­di­ca­tor for medium cows in Queens­land was 225c/kg liveweight (up 15c on a year ago). This com­pares to an av­er­age of 208c/kg in NSW (down 8c) and 191c/kg in Vic­to­ria (down 33c).

Heavy steers 500-600kg liveweight were at 285c/kg in Queens­land (up 13c), com­pared to 275c/kg in NSW (down 26c) and a lower 259c/kg liveweight in Vic­to­ria.

In dol­lar terms, for a 600kg steer the price dif­fer­ence be­tween the north and the south is equiv­a­lent to about $150, which is not to be sneezed at.

Data in the form of weather and sup­ply ex­plain why the mar­ket in Vic­to­ria has hit a ceil­ing this au­tumn.

The sum­mer was ex­tremely dry across most parts of Vic­to­ria, cul­mi­nat­ing in it be­ing the dri­est Fe­bru­ary since 2009, ac­cord­ing to the Bureau of Me­te­o­rol­ogy.

Some cen­tral and north­east ar­eas recorded their low­est Fe­bru­ary rain­falls in 20 years.

Linked to this is how cat­tle num­bers to pro­ces­sors are track­ing.

The lat­est avail­able slaugh­ter fig­ures (for the week end­ing March 9) lists the Vic­to­rian cat­tle kill at 23,747 — well up on the 19,230 pro­cessed in the com­pa­ra­ble seven day pe­riod last year.

In Queens­land, where late wet sea­son storms dumped up to 200mm of rain, the op­po­site trend is ev­i­dent.

The state’s cat­tle slaugh­ter fell to 58,041 in early March, well down on the 68,725 that went through kill chains the same time last year.

To go back a step, there is ev­i­dence to show how the dry con­di­tions that were pre­vail­ing in Queens­land be­fore the storms had forced cat­tle to be sold ear­lier than usual.

The Aus­tralian Bureau of Sta­tis­tics just re­leased its of­fi­cial data for Jan­uary.

It showed to­tal beef pro­duc­tion was up 15 per cent year-on-year to 541,000 for the month, with Queens­land pro­duc­tion lift­ing to a rate 25 per cent higher than Jan­uary 2017.

The up­side of all th­ese fig­ures is that, if and when the south re­ceives a de­cent au­tumn break, the mar­ket in Vic­to­ria should be able to rally along sim­i­lar lines to the north. Par­tic­u­larly as the strong pro­duc­tion trend line for the state in re­cent months sug­gest pro­duc­ers have also sold cat­tle early due to the pres­sure of the sea­son.

At sa­le­yards last week there were price im­prove­ments of 20-30c/kg for the best tradeweight slaugh­ter cat­tle, with some high-yield­ing Euro­pean-bred calves com­mand­ing up to 340c/kg liveweight.

Buy­ers at th­ese mar­kets ac­knowl­edged that a wide­spread au­tumn break would quickly change the sup­ply dy­nam­ics for cat­tle in the south and lift prices.

For young cat­tle, rain would change not only sup­ply but de­mand.

The Eastern Young Cat­tle In­di­ca­tor shifted side­ways this week, clos­ing Mon­day night at 558c/kg car­cass weight to be nearly 4c down on late last week.

Dig into the data be­hind the EYCI and it shows a big in­crease in the amount of young cat­tle com­ing for­ward af­ter the mar­ket showed some im­prove­ment, prompt­ing farm­ers still un­der sea­sonal pres­sure to push num­bers for­ward.

The other in­ter­est­ing el­e­ment is that feed­lots are the dom­i­nant buy­ers, pur­chas­ing 51 per cent of el­i­gi­ble veal­ers and year­lings in­cluded in the EYCI cal­cu­la­tions last week. His­tor­i­cal data shows that prices for young cat­tle al­ways show the most im­prove­ment when re­stock­ers are more ac­tive and push the mar­ket, which re­quires wide­spread rain.

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