Resumption of cattle rail services

Cattle rail services still in doubt

Markets
Aa

Six months on it still remains uncertain whether resumption of cattle train services will occur in time for the May seasonal peak in cattle movement.

Aa

SIX months on from the first indications of problems with the government’s newly purchased cattle-crate fleet and subsequent suspension of cattle train services across Queensland, it still remains uncertain whether resumption of services will occur in time for the May seasonal peak in cattle movement.

Alarm bells started to ring in September last year with what appeared to be a construction/design fault which allowed ramps on the new crates to drop open in transit.

According to an industry source, the new crates had only been in service for seven weeks when the problems started to appear.

Aurizon, the government’s contracted service provider, enacted a temporary suspension of livestock rail services while it undertook an audit of the new crates.

The first public indication that something was wrong was when LNP Member for Gregory, Lachlan Millar, raised concerns in the pages of QCL that ‘hundreds’ of wagons carrying the new crates were lying idle in Emerald.

It seemed at that point the wagons were awaiting cleaning before being returned to Brisbane for repair.

That it wasn’t Aurizon’s sole responsibility to simply fix the problem and get on with it stems from the fact that the crates are owned by the government.

This goes back to December 2015 when then Minister for Transport, Stirling Hinchliffe, announced that the Palaszczuk Government had agreed to purchase new cattle crates to provide more diverse transport options for customers and rail operators.

He said the new crates would initially be purchased for Aurizon but would later become available for any future rail operator.

Unlike traditional K wagons which were extremely heavily built on dedicated rolling stock, the new crates are much lighter and designed to be attached to standard 40-foot flat-bed wagon rolling stock.

Presumably if the rolling stock needed to be repaired or refurbished, the crate could simply be lifted off and repositioned on another standard wagon.

Interestingly it appears that the government was sufficiently convinced of the reliability, flexibility and efficiency of the new crates to waste no time in withdrawing the old fleet from service.

That is despite the fact that the old wagons essentially remained quite serviceable.

The same industry source described them as virtually indestructible and probably good for another 40 years.

In retrospect it looks as if it would have been a good idea to keep the old wagons long enough to see the replacements settled in before cutting them up for scrap. That may have allowed for livestock services to continue while the bugs were ironed out.

Now it seems the point has been reached where industry is satisfied with the fix but before full return to service can be contemplated, comprehensive trial running needs to be undertaken.

It is understood the testing will involve configurations of up to 30 wagons on different lines which suggests a time frame of possibly two or three months.

This brings into question whether service will resume in time for the second-quarter seasonal peak which hits around May.

Asked to comment on the trial and a possible date for return to service, Aurizon advised that any enquiry should be directed to the Department of Transport and Main Roads (TMR).

A similar request to TMR on Monday remains unanswered at time of going to print.

Strong growth in US beef exports

BEEF export figures just released by USDA show a strong start to the year and point to intense competition for Australia in premium Asian markets as the year progresses.

Total US beef exports for January were 105,486 tonnes, a 9pc rise year-on-year.

So far domestic and export sectors each appear to be maintaining their respective share of total beef production which suggests that each is accommodating production growth brought about by herd rebuilding.

But the big question is whether the domestic side of the coin can continue to absorb the further large increases in production that are predicted.

Opinion from market analysts in the US casts some doubt on this.

Economic circumstances, changing consumer preferences and competition from chicken and pork will all conspire to determine whether beef consumption continues to grow or starts to flatten out.

If the latter happens, a significant additional burden will fall to exporters to clear the extra product from the system and that has implications for Australia.

The latest comments from US Meat Export Federation (USMEF) spell out very clearly just where this threat will manifest itself.

USMEF president and CEO Dan Halstrom said “The US beef industry gained significant market share in Japan (in 2017) despite considerable obstacles and posted a record-breaking performance in South Korea and Taiwan.”

Japan became the leading export market for US beef in 2017 with volume climbing 19pc year-on-year to 307,559t, a new post-BSE record.

Chilled exports to Japan expanded even more rapidly to 148,688t capturing more than half of Japan’s imported chilled beef market.

In South Korea, the US added a further 3pc in volume (184,152t) to the record shipments of the year before. Chilled product once again accounted for the greater part of this growth.

In anticipation of further growth opportunity in the Japanese market, USMEF recently led a promotional campaign with the catchphrase ‘pound steak’ to try to establish a consumer food trend in Japan for a typical US thick-cut steak.

The intent is to convince foodservice operators and restaurants to upscale from typical 6-8 ounce steaks to 15-16 ounces, hence one pound.

Cleverly USMEF has introduced interchangeable hashtags #mypoundsteak and #americanbeef to the social media component of the overall ‘My Pound Steak’ campaign to tie the concept to US beef.

Rates come off

WITH kill bookings now out in front for a couple of weeks, OTH rates came back 10 cents on Monday taking 4-tooth ox to 500c/kg and heavy cow to 440.

While restocker interest in Queensland remains strong, southern regions, particularly the Riverina, are dry and will continue to push out cattle until the autumn rain arrives.

Aa

From the front page

Sponsored by