Cattle market chatter hits Canberra

Cattle market chatter hits Canberra


Beef Cattle
All eyes are on potential rain in pastoral regions of Queensland. Photo: Kelly Butterworth

All eyes are on potential rain in pastoral regions of Queensland. Photo: Kelly Butterworth

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Forecast rain in Far North Qld could deliver price lift

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BOOSTED soil moisture in many northern pastoral regions and the prospect of more rain to come, particularly in the Gulf country, is expected to pump some strength into the declining cattle market.

Should ongoing rain maintain soil moisture at useful levels, substantial jumps in prices could even be on the cards.

Those are the sentiments of market analysts this week against a backdrop of chatter about whether Queensland’s livestock offload is going to crash the market.

Most industry leaders and market experts say there is no need for alarm - the cattle market story of 2018 to date was one of relatively sharp ups and downs directly related to rain in Queensland.

But overall, given Australia’s low herd size at the moment, another big sell-off from Queensland could be absorbed.

Market analysts Mecardo say although the increased female slaughter pattern in Queensland since spring was elevated from an historic perspective, it was yet to reach the very high levels consistent with the herd liquidation of four years ago.

The vagaries of Australia’s cattle market made it to Canberra this week, where a senates estimates hearing asked Meat and Livestock Australia (MLA) boss Richard Norton whether action was needed to offset the repercussions of ongoing drought in parts of Queensland.

Producers had started to offload livestock quickly as it became apparent Queensland would have a failed wet season, Mr Norton said.

“Processors are being offered a lot of livestock at the moment and kill dates are being pushed out,” he said.

Slaughter volumes for the Eastern States last week was up 3 per cent year-on-year.

The benchmark Eastern Young Cattle Indicator is back 20 per cent year-on-year.

“I have been hearing of shipments out of Townsville of heavy finished steers making $2.50 a kilogram, where a month ago they might have made up to $2.90/kg,” Mr Norton said.

“But it is all dependent on what happens with rain. There is some coming across Queensland right now, albeit on the coast, and the eight day forecast is for the Gulf country to receive good rain.

“Everything will turn around if there is significant rain through Far North Queensland.”

To put the situation in perspective, Mr Norton explained the greatest ever sell-off of cattle in Australia’s beef production history occurred from 2012 to ’14 when the herd size went from 31m head to 27m.

The price for cattle bottomed out as a result but then, in the ensuing shortage of supply, it rose to highs not seen before - the EYCI hit a record $7.25c/kg.

“It is now at $5.40c/kg and that is still well above the rolling ten year average,” Mr Norton said.

“Cattle prices have come off but the returns for producers are still good.

“I suspect most producers, knowing the size of the dry in Queensland, are reasonably buoyed by current prices.”

One issue he did mention was the fact Western Australia’s Pilbara region, which was experiencing a wonderful season, was not taking the big numbers of cattle on offer out of Queensland because of new Johne’s disease management.

Under the new regime, cattle entering WA must have a Johnes Beef Assurance Score (JBAS) score of 7 or above, which requires a biosecurity plan signed off by a veterinarian and annual check tests as opposed to three-yearly tests.

Few producers in Queensland are attempting to gain JBAS 7 status, given the $1200 laboratory fees for the check tests, plus vet fees.

Unless you are able to send six decks to WA, it is simply not economical, producers and stud owners said.

“There is not much complaint happening right now because cattle numbers overall are so low but when the time comes we have much bigger numbers, not having that market will be very keenly felt,” one producer said.

Mr Norton said the Northern Territory had experienced reasonably good seasons and livestock numbers there were already quite strong.

However, many beef enterprises would look to be opportunistic and buy out of Queensland where the JBAS status allowed, he said.

The NT takes JBAS 6 or above.

The story Cattle market chatter hits Canberra first appeared on Farm Online.

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