August 6, 2007

 

Australia's cattle supply and sales decline

 

 

National throughput at Meat and Livestock Australia's (MLA) National Livestock Reporting Service (NLRS) reported last week's sales were down by 16 percent week and 14 percent on-year. Indicators for trade and feeder steers finished at 192 cents and 183 cents/per kilogramme liveweight (/kg lwt), respectively. Medium steers gained 5 to 171 cents while Japan ox fell 3 cents to 176 cents /kg lwt. The US cow followed a dearer trend to finish at 128 cents/kg lwt.

 

Cattle slaughter across the eastern states during July 2007 was 5 percent up than the same period last year, yet 8 percent lower than the five-year average.

 

The NLRS said there were variations in seasonal conditions experienced throughout the month, along with scheduled maintenance closures by many processing plants. This resulted in varied slaughter among the states.

 

New South Wales (NSW) recorded the largest percentage increase in cattle slaughter, up 13 percent compared with the previous year. NSW was also the most consistent with the five-year average, being only 2 percent lower.

 

Queensland and Victoria followed a similar trend. Cattle slaughter was up 1 percent in Queensland and 9 percent in Victoria on July last year, but both were down 10 percent on the five-year average. Slaughter in South Australia in July, however, was considerably below the five-year average, finishing 31 percent lower.

 

As would be expected, eastern states' output at MLA's NLRS reported saleyards has mirrored trends in slaughter. July numbers were higher by 12 percent in comparison to the previous year, and down on the five-year average in all states, except for NSW. NSW throughput was 32 percent above last year's numbers due to improvement in the season encouraging producers to hold onto stock during June. This was followed by some harsh winter weather and improved prices that encouraged numbers onto the market.

 

The supply of grown steers at MLA's NLRS reported saleyards decreased by 28 percent compared with the previous week due to tightening in seasonal conditions, which has reduced producer's ability to finish grass-fed grown steers to heavier, export specifications. To emphasise this trend, there has been an increasing number of leaner C3's offered compared to the better finished C4's.

 

The tightening in supply has aided competition and assisted prices across both the C3 and C4 grown steer grades. Following the recent downward price trend for the grown cattle section, they have shown a slight turnaround this week. Prices for medium and heavy C3 grown steers increased 3 cents/kg lwt. The heavy C4 grown steers to slaughter have stabilised in comparison to recent weeks, to be largely unchanged, finishing the week at 178 cents/kg.

 

The combination of national throughput at MLA's NLRS reported saleyards being 16 percent lower and plainer quality, resulted in mixed changes to national indicator prices.

 

Queensland numbers dropped almost a quarter on last week, and this has led to prices remaining fully firm to 4 cents/kg lwt dearer. The other states have not faired as well, with price decreases across all young steer categories.

 

Despite reduced vealer steer numbers, the national indicator lost 3 cents to finish at 191 cents/kg. Both the yearling and feeder steer indicators remained essentially unchanged at 192 cents and 183 cents/kg lwt, respectively.

 

Medium weight grown steers enjoyed an increase in competition and prices lifted 4 cents to settle at 171 cents/kg lwt. Japan ox, however, fell 3 cents, to 176 cents/kg. Medium weight cows sold to good enquiry due to limited numbers of better quality lines, to finish 1 cent higher at 128 cents/kg lwt.