Sheep live-ex woes flow through to cattle in the west

Sheep live-ex woes flow through to cattle in the west


Beef Cattle
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Cattle live exports down 20,000 out of WA

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Cattle being loaded on a boat leaving Western Australia.

Cattle being loaded on a boat leaving Western Australia.

THE cattle game in Western Australia is starting feel a domino effect from reduced live sheep shipments to the Middle East in the wake of new stocking density regulations.

The combination of market share losses in Indonesia as the likes of Indian carabeef cements its place and reduced places on sheep ships that typically top up with cattle is biting hard.

Agents and producers estimate live cattle export numbers have dropped by about 20,000 in the past three months.

Decisions are already being made to scale down livestock operations with some movement into cropping expected, said live cattle supplier Geoff Pearson, who holds representative roles with the Western Australian Farmers Federation and Cattle Council of Australia.

The big anxiety was coming from the fact live exports and processing benchmark against each other in terms of setting cattle prices in WA so “if one falls over it’s game over”, Mr Pearson said.

Record cattle prices last year created a situation where competitors moved in on Australia’s key live export markets, he explained.

“It appears now that our undersupplying of markets in South East Asia will have a long term effect,” he said.

“They have developed a taste for other cattle and earning back that market share will be very difficult for Australia.

“South America is sitting there with a massive supply of live-ex cattle and some of the big exporters operating out of WA are already running in those markets.”

Indeed, in posting its half-yearly results in February, Australia’s largest livestock exporting business Wellard, based in WA, said the biggest change to its operations involved switching to chartering opportunities for its large, modern vessels between South America and Mediterranean ports.

"Demand for live cattle from countries in the Mediterranean, including Turkey, continues to be strong,” Wellard operations executive director Fred Troncone said.

“We expect that a significant proportion of these will continue to be sourced from South America.”

Mr Pearson said live slaughter and feeder cattle to China was slowly gaining traction and could potentially fill the void “but there are importing issues in China and always will be - it’s a difficult market to tap into.”

Broome Landmark livestock agent Andrew Stewart said the China opportunity had seen a good deal of capacity diverted to southern parts of Australia and ships were tied up on longer trips.

“We are definitely operating under a different set of circumstances to what we are used to - at this time of the year we’d be in full flight with live cattle exports,” he said.

Live-ex prices were back 20 to 30pc on this time last year, he said.

“The big boats have gone to other markets,” he said.

Mr Pearson said numbers going to slaughter had not yet reflected the downturn in live exports because people were hanging onto cattle to put weight on the them.

Recent rain would mean they would continue to do that.

“Ironically, market forces this time last year were telling us we have to go more in the live-ex space - signals are totally different now,” he said.

The story Sheep live-ex woes flow through to cattle in the west first appeared on Farm Online.

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