Rain steadies March beef exports

While the southern states usually continue their summer seasonal turnoff through January and February, Queensland generally does not see turnoff and production ramp up until March when the extreme temperatures start to abate.

With cattle plentiful in the south and Queensland expected to have carryover numbers from late last year, March was shaping as a good solid month for processors but then it started to rain.

Unlike the earlier break in February which didn’t cause any loss of time, the March rain was very heavy in the eastern and northern parts of Queensland and days were lost in many sheds. As well, the reopening of Townsville’s Stuart plant after the summer close down was set back until after Easter.

In all what should have been a month where exports pushed up to around 100,000 tonnes ended up being just 90,974t.

This had a noticeable effect on 2018 first-quarter results compared to last year.

January and February trading had taken progressive tonnage 17pc ahead of 2017 but the steadying influence of March has reduced the first-quarter result to an increase of just under 10pc.

Nevertheless, March was still 5000t up on February’s total and virtually identical to the March 2017 figure.

The lateness of the March rain may also have implications for the second quarter.

On one hand there may now be a tendency for producers to treat for buffalo fly and leave the cattle to put on as much weight as they can while on the other hand there should be those cattle that were ready but held up by the March rain to come forward now.

One major processor I spoke to earlier in the week indicated that they were fairly well placed for numbers for their southern Queensland operations for the remainder of April.

No doubt the Easter and Anzac Day short weeks would have an impact on numbers needed for this month so the test will come when full kills resume in May.

The processor contact was reasonably confident that in Queensland at least there are cattle to come in May as by then they should have done well on the ripening late summer feed.

But the lateness of the season this year may have a tendency to push some of the traditional May peak into June or even early July.

On a market-by-market basis, what the export figures appear to confirm is that Asian markets in some respects are offering an alternative for product that would normally go to the US.

While Australia’s overall beef exports increased by 17pc year-on-year for the two months ended February, the US during the same period struggled to hold its imports from Australia at 2017 levels.

By comparison China was 42pc above 2017 levels at the end of February and Indonesia was up by 29pc.

China’s rate of increase steadied a bit in March but Indonesia continued to push upwards taking their progressive for the quarter to 45pc above 2017.

In the Japanese market, March volume at 26,143t was up by 2000t on February but down by the same amount on March 2017.

Japan’s progressive for the first quarter is just holding at 2pc above same period 2017.

South Korea meanwhile has shown consecutive month-on-month increases above 2017 levels.

For the first quarter their progressive volume stands at 35,376t, up by 8pc on 2017.

FOR most of us who are only familiar with Australian meat retailing practice, the above photo taken on Sunday in a Santiago (capital of Chile) supermarket provides a bit of insight into how other countries handle the retail end of the trade.

There were sliced cuts packaged on overwrapped styrene trays (as happens in Australian supermarkets) but the photo indicates a lot of product is vacuum packed as primals or sub-primals and the sheer volume in the display suggests a lot of meat is turned over.

Not surprisingly the offering included product from Brazil, Argentina, Uruguay and perhaps somewhat surprisingly a considerable amount from the United States.

That says a lot about the competitiveness of US product when it can claim chiller cabinet space against the South American giants of beef production on their home turf.

Good looking sliced T Bone steak was selling for 6990 Peso per kg which equates to about AU$15/kg.

WHILE Queensland appears to be settling into a steady supply pattern now that Easter is behind us, the south is another matter altogether.

The picture emerging is dry conditions all the way from Moree to the Victorian border.

One contact remarked it is not often you hear of southern New South Wales running out of water but talk of empty dams is becoming more common especially around Gundagai.

That would account for big yardings at Wagga recently (6000 on Monday) but that does not necessarily mean an overabundance of killable cattle. A high proportion of the 1600 cows yarded were only in store condition which signifies just how much cattle in the Riverina are now starting to slip.

Nevertheless, Queensland works are pulling cattle out of the southern markets and when it does rain down there and supply dries up the impact will be twofold.

The Queensland operators will not only lose a supply source but will also have to contend with southern operators looking to Queensland to supplement their kills.

Back in Queensland, sales desks have reported a rare moment or two of better trading in our principal overseas markets buoyed to some extent by exchange rates which in turn is helping to hold OTH rates at 505c/kg for 4-tooth ox and 445 for heavy cow.

But as has been reported for several weeks now there are big numbers on feed in the US and heavy volumes of meat are coming.