OVER-THE-HOOKS prices have remained remarkably stable since recovering from the October plunge and look set to remain at current levels of 545c/kg for indicator four tooth ox and 505c for heavy cow as the processing year runs down.
Last week’s eastern states’ kill picked up a touch to 149,443 according to MLA figures with the extras occurring in Queensland and New South Wales.
Queensland’s kill was 68,245, an increase of about 4000 on the previous week due mainly to fluctuation in flow of cattle out of feedlots. One multi-site export processor said they now expect to maintain full kills until the season closes down.
However selling product, particularly into the US market, remains a challenge. Department of Agriculture (DA) figures to November 26 show less than 13,000 tonnes were shipped to the US for the month.
This is a massive reduction on the July tonnage of over 44,000 and shows just how big an impact triggering of quota can have.
As of November 26 Australia has filled 99.6pc of its US beef quota. 416,373 tones have been shipped since December last year leaving just 1840t to go for 2015. Tonnage shipped during the remainder of this year will count toward the 2016 quota.
The limited offerings from Australia however do seem to be helping to steady the price plunge for imported lean beef in the US market.
Steiner last week quoted indicator category 90CL at US 189-190c/lb (CIF East Coast) virtually unchanged on the previous week.
But the US domestic lean beef market was still showing a softening tendency with the market overall quoted 2 cents lower due in large part to what Steiner describes as burdensome inventories of product in cold storage.
MLA report on saleyards questioned
IN their latest weekly Friday Feedback publication, MLA has claimed that finished cattle offerings through Queensland saleyards are in sharp decline but a recount of historical developments and an examination of MLA’s own National Livestock Reporting Service (NLRS) data would seem to cast some doubt on that finding.
The MLA analysis has the proportion of slaughter cattle purchased out of saleyards in Queensland falling from almost 60pc in 2011 to a shade over 30pc in 2015.
This is a massive shift if it can be believed as it would appear to exceed the magnitude of the fundamental drift toward over-the-hooks trading that occurred in Queensland in the late 1980s and early 1990s when the problematic issues of differences in carcase trim and cold-weight adjustment for pricing were addressed firstly by the then Livestock and Meat Authority of Queensland (LMAQ) and later by AusMeat.
Over-the-hooks trading in those days was generally referred to as ‘weight and grade’. Producer disquiet over non-standardised carcase trimming and up to 3pc adjustment from hot to cold weight meant that saleyards and paddock sales (the latter often on a liveweight basis) were popular options for transacting slaughter cattle.
LMAQ mandated hot weight trading by regulation and developed a standard carcase trim. These initiatives moved to AusMeat and rolled into the new meat language along with category definitions based on dentition and the adoption of fat measurement.
The upshot was a major improvement to the trust component in producer/processor relationships and a significant shift away from saleyards and paddock sales to direct-to-works trading of slaughter cattle.
Regrettably, industry did not formally record the quantum of this shift and the best data from that era came out of informal quotes from meatworks on how they sourced their kills and the annual saleyard survey figures compiled by LMAQ.
From recollection, the estimate of the nett shift in Queensland from saleyard and paddock sales to direct-to-works trading amounted to about 20pc.
This is believed to have taken direct-to-works as a percentage of total export slaughter up to around 80pc by the early 1990s. Since then, anecdotal evidence suggests that over-the-hooks trading has increased in popularity to the point where it represents more than 90pc of export slaughter in Queensland today.
This steady gain over the last 20-25 years seems to be the main point of contention with the MLA notion of a massive shift of slaughter cattle out of Queensland saleyards in the past four years. A brief examination of NLRS reports for 2011 and 2015 tends not to support the ‘big decline since 2011’ theory.
Dalby saleyard is the major one-day fat and store sale in Queensland so it should provide a reasonable indication of any trend. Reports selected at random from 2011 showed slaughter cattle represented 40-48pc of total yarding back then while reports selected at random from 2015 show 35-42pc at Dalby now. A small sample admittedly and a slight negative trend but nothing like the 60 to 30pc decline claimed in the MLA article.
But the clincher as to the improbability of the 60pc figure for the proportion of slaughter cattle in Queensland saleyards in 2011 is the acknowledgement in the MLA publication that Roma Tuesday data is included in their analysis.
How could the slaughter cattle proportion across Queensland saleyards amount to 60pc when by far the biggest saleyard counted in the overall calculation (Roma Tuesday) has a mere 5-10pc slaughter-cattle component?
In the meantime a likely scenario is that there has been a slight downward trend in slaughter cattle numbers in Queensland saleyards since 2011 but the reason may well have more to do with the transition from good season to drought than anything else.
