BEEF exporters are clearly continuing to struggle to sell the product they are putting through their processing plants at a profit, with slaughter levels dropping to a new low this week.
Meat and Livestock Australia’s latest Eastern States slaughter report showed just 107,326 head were killed last week, an eight per cent drop on the previous week and 29pc decline on the same period last year.
Queensland and NSW were hit the hardest, recording a 31 and 30pc decline on the corresponding period last year respectively.
Queensland processed just 53,758 head in total.
NSW and Queensland females were down the largest percentage of all categories, which MLA market analysts said was reflective of a rebuilding herd.
Taking out the seasonality factor and ups and downs due to public holidays, the 52-week rolling average is now down to just above 130,000 head per week.
That compares to a rolling average in excess of 160,000 towards the end of 2015.
MLA market information manager Ben Thomas said the record low on a rolling 52 week average was 118,000 head, which occurred towards the end of 2006 when Australia’s cattle industry had also just come out of drought.
The biggest limitation to processing at the moment was the small pool of cattle available, Mr Thomas said.
“We’ve had three years in a row - 2013, 14 and 15 - where more than 9m head were removed from the system either through processing or live export - a lot more have been going out than coming in,” he said.
On top of the cattle supply shortage, processors said wet weather had delayed some turnoff, particularly from Western Queensland.
A lot of cattle out of the Channel Country will now not be available until next year, although that does present the opportunity for those producers to put more kilograms on, which could offset Eastern States’ beef production down the track.
Queensland and Northern NSW exporters said cattle prices in the countries Australia competes with globally were at below-average levels, at the same time ours were phenomenally strong.
Add to that the high-flying Australian dollar and beef exporters continue to be priced out of key export markets.
“Brazil is crashing the China market and now has access to the US market,” one processing boss in the region said.
“The US and Canada will both soon be exporting to China.
“In the US, the average hot standard carcase weight is now 402 kilograms and they are killing 600,000 head per week - the US trim market has dropped $1/kg in the past 14 days.
“This excess US beef and cheap prices means they are now crashing the Korean and Japanese markets.”
On the domestic front, low grain prices are pushing chicken and pork retail prices down.
“Chicken breast on special in Sydney last week was $5.99kg, so I think we will have to deal with $4.99kg chicken breast by Christmas,” he said.
“There is absolutely no good news at the moment on the sales front - the only positive is our producers are experiencing the best season ever.”