September 7, 2009

Australia's average weekly cattle slaughter figures revealed a 13 percent year-on-year decline to 133,473 head during August, with supplies tightening across all states, according to MLA's National Livestock Reporting Service.

Contributing to the decline was variable seasonal conditions across the states, while processor demand remained weak in light of sluggish export conditions.

New South Wales weekly cattle slaughter averaged 23-percent lower during August. Assisting the reduction in throughput was a fall in kill days from several processors - a reflection of the tough trading conditions, especially to export markets. Not helping demand throughout the month was the higher A$, which hovered around US$0.84 for the majority of August.

In contrast to the large falls across the southern states, average weekly slaughter in Queensland for August declined only two percent. Despite the prime market facing tough trading conditions, the deteriorating season and hot weather encouraged many producers to offload cattle, as feed resources dwindled and concerns grew for the season ahead. In the south of the state, several crops had also started to cut out, which forced more cattle onto the market.

Victoria experienced the greatest drop in average weekly slaughter for August, falling 31 percent year-on-year. While Victorian processors experienced the same beef trading environment as New South Wales and Queensland, some good falls of rain throughout the month tightened turnoff, especially across southern regions. The closure for maintenance of one processing plant for the majority of the month also contributed to the sharp reduction in numbers.

A major feature of the cattle market during August was a steady decline in prices across all categories, falling five to seven percent from the final week of July, as demand across all sectors eased. Combined with sluggish processor demand and reduced operating days, restocker buying quickly evaporated as the season deteriorated, with a lack of rain and unseasonable heat across New South Wales and Queensland.