Aussie beef exports drop 15pc

February 2016 saw 91,000t and the boom production years of 2014 and 2015 saw over 100,000t for that month.

But the low tonnage is by no means unusual or unexpected.

It is in fact wholly consistent with where Australia happens to be at present in terms of cattle numbers and slaughterings.

To the end of February, national (eastern states) slaughter numbers (from MLA statistics) are 155,000 head or 15pc behind same period 2016.

Progressive beef exports to end of February this year are 125,500t compared to 149,000t last year. That is also a 15pc decline.

Give or take a percentage point or two, beef export volume is where it should be expected to be considering current slaughter levels.

However while these numbers show the overall perspective, there is considerable variation regionally in eastern Australia.

Much has been said and speculated about the availability of slaughter stock in Queensland but the reality is that so far the state is running at less than 7pc behind last year. That equates to around 29,000 fewer cattle over the last two months.

Victoria on the other hand has seen nearly 72,000 fewer cattle come forward to slaughter in the same period which amounts to a 32pc drop in their kill.

In between, New South Wales is 35,000 cattle or 13pc down on last year.

But as difficult as it must be for meat processors and their workers in Victoria at present it is not without precedent. In 2012 the kill was running at an identical level to what has occurred so far this year.

While the supply side of the equation has a different perspective to it, so too do our export markets.

The biggest change is the ascent of Japan over the US as Australia’s largest market and this is very evident in the latest figures.

Despite the much talked about resurgence of the US in key Asian markets, Australia has increased tonnage to Japan by 7600 tonnes for the first two months of this year compared to 2016.

This does not mean we are heading back to the halcyon days of 2005-06 when volume exceeded 400,000 tonnes or even the years since up to 2012 when it was over 300,000t but it does look as though we are holding on to what we have.

In that regard Australia gains a further slight advantage over the US in tariff rate from April 1 and latest news from Steiner is that cost of production for US packers has increased in the last week with the price of fed cattle quoted 4pc higher.

In contrast to Japan, trade to the US has dropped by 14,000t in the last two months compared to 2016.

That equates to a 33pc drop which is noticeably disproportionate to Australia’s overall 15pc lower export volume.

Perhaps that is a measure of how hard it has been to place grinding beef product in the US market.

Latest from Steiner on that subject is that the immediate outlook is no better.

Indicator 90CL has dropped US3c/lb in the last week and domestic cow and bull slaughter is running at 11pc above last year’s level.

Drought in parts of the US is also emerging as a possible supply factor. If it continues to develop it could significantly increase cow slaughter numbers in late May/June.

WITH heatwave conditions on the wane and still no widespread wet for most of the state, producers are moving quickly to book some kill space at works right up and down the coast.

Townsville is assured of kicking off on the 21st with around a months kill already on the books while other plants have three to six weeks in front of them which means some are already out beyond Easter.

So far, this year is proving to be something of a repeat of what happened in 2016.

A build up of numbers in March last year saw the ox price slip to 510c/kg and heavy cow to 465c.

Similarly this week, ox are quoted at 510c and heavy cow at 455c.

By March/April last year the national kill was well up in the 140,000s and remained there until the late autumn and early winter rain steadied things down.

But before the rain intervened, Queensland prices had fallen to 490c and 445c.

While there will be some overall lift in kill numbers in the weeks ahead it would seem unlikely that last year’s national levels for the first half of the year will be reached.

That would require substantially more cattle to come through in the southern states and it does not seem that they are there.

The shortage of finished male cattle in the south is likely to buffer against any further price falls there and may even have the effect of a bit of upward pressure.

Last week’s Wodonga sale was a pointer to this when the 168 bullocks in the offering were keenly sought according to the market report and lifted in price by 7c/kg to average 307c live or around 560-570c/kg dressed.

If that firms up across the board it will open up a substantial difference between Queensland and Victorian rates for that class of cattle and that will no doubt have a bearing on which way Channel Country bullocks will flow when they start to move in the weeks ahead.

Cows on the other hand appear to be not so affected.

Wagga had over 500 heavy cows in Monday’s offering and price came back by 5c/kg to average 225c live or around 450-460c dressed.

Whatever the situation in the south, it is unlikely that it will have much bearing on Queensland prices in the weeks ahead.

Last year same time, similar circumstances saw the ox price in Queensland dip under 500c.

A little bit of give in the A$ will help but the overall unattractiveness of sales revenue for processors at present is certain to keep some downward pressure on cattle prices in play.