Rain hindering beef exports

Beef exports hit by rain

Sales
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Rain since the middle of January will put the handbrake on production for the remaining months of the first quarter at least.

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HANDBRAKE ON PRODUCTION: To plug the gaps appearing in kills, buyers hit the physical markets, sending cow prices into orbit.

HANDBRAKE ON PRODUCTION: To plug the gaps appearing in kills, buyers hit the physical markets, sending cow prices into orbit.

JANUARY opened the year's export beef trade in spectacular fashion with a massive 79,221 tonnes shipped weight but rain since the middle of January will put the handbrake on production for the remaining months of the first quarter at least.

Space bookings for January were being made back in early December so works were able to get into stride very quickly once they returned from Christmas break.

But the 2019 kill and the early 2020 bookings were heavily over-represented with females as a consequence of the continuing drought.

A lot of these cattle would have been core breeders which producers desperately did not want to sell and January's rain would quickly have resulted in livestock managers' phones running hot with cancellations.

To plug the gaps appearing in kills, buyers hit the physical markets, sending cow prices into orbit.

Dalby last week saw pens of cows selling to a top of 322c/kg LW which brought the average for the heavyweights up to a remarkable 311c. That equates to more than 600c DW and a top of around 630c, the likes of which one veteran of the game tells me has never been seen before.

Great for those who were able to get cattle into a sale but chances are these extreme rates will settle down fairly quickly once the rain clears and implications for supply come into perspective.

While this supply-side development unfolds it is also looking very likely that there will be implications for global demand as a result of the coronavirus outbreak in China.

Lockdown of the city of Wuhan (11 million people), epicentre of the outbreak, and at least 15 other cities means something approaching 50 million people have had their daily lives disrupted.

The empty streets shown in media coverage suggest a huge hit to the food service sector and reported empty shelves in supermarkets point to retail being similarly affected.

But even more concerning is the possibility of the outbreak not being able to be contained within the surrounding Hubei Province. If the Chinese authorities are unable to gain control of the epidemic there is the very real possibility that this could paralyse the world's most populous country and second largest economy.

Quite apart from the humanitarian implications, the global knock-on effects to countries that are economically dependent on China would be hard to imagine.

Against that background it seems a bit trifling to talk kill numbers and try to predict cattle market movements but that is essentially the purpose of the column. Assuming therefore a positive outlook, the best slant that might be put on the Chinese market is for a longer-than-expected slowdown in trade.

While the January tonnage was by far the biggest since trade effectively started in 2012 (73 per cent higher than 2019), it is also likely that a good part of that volume had its origins in the aggressive Chinese buying last November to secure product ahead of Chinese New Year. December 2019 saw a reversal of the price hike caused by the Chinese buying activity and some lamentable behaviour by Chinese buyers reneging on high-priced deals.

January trading was slow but was expected to pick up after Chinese New Year to secure requirements for the second quarter. That pick-up is now very much in doubt.

Steiner's analysis last week mentioned congestion in Chinese ports and product backing up, with the result of overseas suppliers shifting their attention to other markets.

The 2019 kill and the early 2020 bookings were heavily over-represented with females as a consequence of the drought. A lot of these cattle would have been core breeders which producers desperately did not want to sell and January's rain would quickly have resulted in livestock managers' phones running hot with cancellations.

Their view is that this uncertainty has led to Australian and New Zealand packers being more willing to consider US bids.

But unfortunately the US market might not be quite ready to step into the China void.

US end users paid hefty prices in the latter part of last year and are reported to be waiting to see the current market bottom out before becoming more engaged.

They are also mindful of the NZ seasonal tendency for cow slaughter to pick up in late February/March. Imported Aust/NZ 90 CL blended cow traded last week at US$230-235/cwt (hundred pounds) FOB East Coast.

That is a significant discount on domestic lean which traded around US$242/cwt.

Not a lot there to support the idea of any longer term continuation of 300c/kg cows in Australian saleyards.

Nicotine style 'patch' for meat addicts

IRISH based plant-food company Strong Roots is having a good laugh at the meat industry's expense with its gimmicky 'meat patch' to supposedly help wannabe vegetarians and vegans stave off their meat cravings.

With no mention of the product on the company's website there seems little doubt that this is less of a serious scientific development and more of a bit of clever publicity for the company. Whatever, it seems to be working as a wide cross-section of food magazines, websites and mainstream media have grabbed the bait and run hard with it.

2008 Ig Nobel Nutrition Award winner Professor Charles Spence is behind the idea.

The Ig Nobel Prize, founded in 1991 by an American scientific journal, is a parody of the Nobel Prize 'for achievements that make people laugh and think'.

But there is a serious side to Spence's work.

As an experimental psychologist at Oxford University, Spence is devoted to the study of how visual, tactile and auditory sensations affect taste. Like a nicotine patch, the meat patch, which features an image of strips of bacon overlaid with a red circle X, sticks on to the upper arm.

However the contents are not absorbed through the skin but rather simply give off an aroma of cooked bacon when scratched.

Spence explained that this might help those who wish to refrain from eating meat to imagine they are eating bacon and this supposedly should sate their appetite.

Being trialled (handed out) at various sites in the UK this week, the throwaway line from Strong Roots was that it hoped the product will become more widely available to consumers in the future.

The story Rain hindering beef exports first appeared on Farm Online.

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