BEING a short month with further production lost through Easter and Anzac Day holidays, April traditionally opens the second quarter with relatively low beef export volumes.
Usually the difference between March and April is around 10,000 tonnes or more but this year April closed that gap to less than 3000t.
Latest figures compiled by Department of Agriculture and Water Resources (DAWR) show 88,179t were exported for the month.
Contributing to that result was the re-opening of Stuart meatworks on April 3 and re-introduction of a Monday shift at Dinmore on April 16.
Also relevant was the loss of time in March due to heavy rain in eastern and northern parts of Queensland which pulled that month substantially short of what should have been an export result of around 100,000t.
The 100,000t per month figure is a meaningful statistic for the Australian beef industry as it encapsulates the supply situation of slaughter stock emanating from the national herd and its associated dynamics.
For example in 2012 at the pinnacle of herd rebuilding after three successive wet seasons, there was not one month when exports reached 100,000t. The best was 94,000 and the average was 80,000t/ month.
The dynamics in play then were presumably a more normalised supply of culled females and grass-fattened bullocks as opposed to elevated levels of lofted cattle.
Then as the drought worsened in 2014 and 2015, there were only two months in each of those years when tonnage was under 100,000. The highest was 123,000t in March 2015 and the average in both years was around 107,000t/month.
Shifts were expanded to accommodate higher-than-normal numbers of females coming forward as herd liquidation escalated and bullocks came out of feedlots instead of grass paddocks. In consequence, Australia had a lot of beef to sell.
Since then with storms providing partial relief in the absence of widespread drought-breaking rain, we have probably seen something of a holding pattern in 2016 and 2017 with herd liquidation largely coming to a halt but herd rebuilding not really getting underway.
There was only one month in 2016 when 100,000t was reached and 2017 was similar with just one month very near 100,000. Total tonnage was similar in both years averaging around 85,000/month.
How is it then that in 2012 when the herd was approaching stability (neither increasing or decreasing) at a record high of close to 30 million, it could produce only 80,000t/month in beef exports while the current herd since 2016 at around 26-27 million and also relatively stable can produce 85,000t/month in exports?
The answer to that has to lay with average carcass weights and that in turn brings into frame two key factors; the proportion of females in the kill and the impact of lot feeding on both male and female carcass weights.
Fewer females relative to males will raise average carcass weight and a higher proportion of fed cattle will have a similar effect.
According to ABS figures, in 2011-12 at the height of herd rebuilding the percentage of females in the kill was 43.
As liquidation got underway in 2013 it rose to 47pc, then 51pc in 2014, 49pc in 2015 and back down to 47pc in 2016.
It seemed to stabilise at around 45.5pc in 2017 but has blown out again to 46.6pc in the first three months of 2018.
In concert with these movements we saw average carcass weight of 287kg in 2012 fall to 277kg in 2014 then rise back up to 288kg in 2016.
Then there was a massive jump in average carcass weight to 298kg in 2017.
This is partly explained by the further drop in female percentage, partly by the carry-over benefits of a wet, warm winter in 2016 but more significantly by the spike in proportion of fed cattle in the mix in the latter half of 2017.
It is largely this impact of lot feeding that has allowed 2017 export tonnage to remain at 2016 level despite 130,000 fewer cattle being slaughtered.
While coming off to some extent in the last quarter of 2017, feedlot placements remain relatively high and have continued their upward influence on carcass weights in first quarter 2018. The average has now edged up to 300kg despite the slight rise in female percentage.
But with processors more circumspect about their inventory levels of cattle on feed this year, it is likely that average carcass weights will retreat as the year progresses.
Fewer cattle going on feed will mean it will take longer to fatten those cattle on grass and that could create a significant gap in supply.
Also, rain in the south would quickly bring an end to the current offloading of females and put grass finishers in a position to outbid the feeders.
The combined effect of these possibilities could make for a very difficult supply situation in the latter half of the year.
That might mean the 100,000t (or more) beef export volume expected this month may be one of very few six-figure results we see for the rest of this year.
Southern market poised for big gains
JUST how much an effect general rain in Victoria and New South Wales will have on the market was demonstrated last week with teaser falls of 25-50mm across southern and eastern parts of Victoria.
New South Wales largely missed out but nevertheless numbers plummeted by 2500 head at Dubbo last Thursday sparking an 11c/kg gain on meatworks cows.
At Wagga on Monday numbers were down by 2600 head resulting in a 14c gain and at Leongatha where some of the better rain fell, 1100 fewer cattle led to a 17c gain and a top of 227c/kg for good heavyweight types.
Bullocks in the same market were 12c dearer climbing back to just over 300c and an average of 295.
The question many face now is take money or hold on a few weeks longer.