Cows nudging 300c/kg live

Cows nudging 300c/kg live

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The price of cows is soaring in the saleyards.

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Central Queensland stole the limelight last week with a stunning escalation in cow prices at both Emerald and Gracemere.

Market watchers who generally track the bigger numbers through centres such as Dalby would have been familiar with the 270-280c/kg money that cows have climbed to recently but Emerald on Thursday took over the running with the official MLA report showing medium weight cows reaching 295c and heavyweights reaching 293c.

Just to show it wasn't a one-hit-wonder, Gracemere followed suit on Friday with 291c for heavyweights.

The fact that in both centres there were no cow numbers to speak of points to an increasing shortage of this class of cattle in the central region and early signs of this were evident back in October when the freight differential between central and southern Qld works disappeared and central prices aligned to match the southern rates.

The question now is whether the 300c barrier will be broken. This would see 600kg plus cows making $2000 and while there have been cases where extra heavyweight animals have achieved this, that sort of money in general play would be a significant milestone.

At Emerald on Thursday medium weight cows reached 295c/kg and heavyweights reached 293c/kg.

At Emerald on Thursday medium weight cows reached 295c/kg and heavyweights reached 293c/kg.

Market reporter Trevor Hess, who took over from Toowoomba reporter Lynn Vandersee in July 1991, said last week's 284c at Dalby was as good as he could recall.

Rockhampton agent Brad Mulvihill confirmed that central Queensland yardings are well back on numbers.

Despite the good money on offer for bullocks and cows he didn't think there were many to be enticed out.

Season wise there have been some good falls around Banana and Rannes but the ground is so dry that even those who received 70-100 millimetres will very much need follow-up rain.

Thunderstorm downpours are not resulting in any significant beneficial growth.

He cited the example of a Biloela property receiving 50mm in a storm. Only the slightest green tinge came through and that was quickly burning off with the hot days.

The question now is whether the 300c barrier will be broken. This would see 600kg plus cows making $2000 and while there have been cases where extra heavyweight animals have achieved this, that sort of money in general play would be a significant milestone.

In contrast to the meatworks rates, Brad noted that there is not a lot of strength in the light end of the store market.

As indicated in the MLA report, quality is still being rewarded in places but at the same time other descriptions were as much as 50c/kg cheaper on Friday.

China to be our biggest market by year's end?

IN October, Australian beef exports to China rose to 30,724 tonnes, yet another monthly record and almost double the amount exported in same month last year.

On a progressive basis, China is now running at 75 per cent above year-ago levels and on a volume basis looks as though it could eclipse Japan as Australia's largest beef customer by year's end.

Support for this appraisal comes from US analyst Steiner Consulting, who last week commented that Australian beef exports to China are on track to exceed 35,000t in November. They further expect "robust" shipments in December. On that basis, China could end up taking around 295-300,000t of beef from Australia for the calendar year against an estimated 290-295,000t to Japan.

That would be an astonishing development considering Australia's beef exports to China for the whole of calendar year 2012 were little more than the single month of October just completed.

Steiner also describes the state of the global market for imported lean beef as effectively a bidding war between US and Chinese buyers because of uncertain supply in the next three to four months.

In the US it is the traders, processors and foodservice operators whose combined short positions are driving prices higher.

Their problem at the moment is to find price levels that will draw offerings from Australia, New Zealand, Central and South America in order to cover their needs for forward, fixed-price commitments.

Consequently in the space of just one week, Australian/NZ 90CL blended cow has jumped a further US$14/cwt (100lbs) on top of the $16/cwt rise of the week before.

This takes the price of 90CL to US$279/cwt FOB US East Coast which equates to AU$8895/tonne on current exchange, a rise of AU$955/t in the space of a fortnight.

In the same week last year on an equivalent exchange rate, 90CL would have been quoted at AU6060/t. That adds some perspective to the soaring price of cows in the saleyards as discussed above.

Late run before year-end

WITH only two weeks of November left, the end of the processing year is rapidly approaching and the question for some operators is whether they will get through without dropping time.

One major contact said earlier this week that while they haven't lost any time yet the current state of supply pointed to some down time ahead. Having said that, he also recognised the depressing weather outlook for the months ahead might prompt another run of cattle before year-end. Reluctant acceptance of low probability of a good break before Christmas might cause some people to cut a bit deeper into the herd now rather than risk leaving it until the New Year.

But whether there are any extra numbers of killable cattle left to come is another matter.

It may be that any spike in turnoff now could largely be lightweight store cattle.

In the meantime northern processors are active in southern-state markets and rapidly closing out the north/south price differential that had opened up back in early October.

Wagga on Monday saw a 9-12c/kg rise across medium and heavyweight cows despite the sizeable offering.

Heavy score 3 and 4 types averaged 257c and 266c respectively with a top of 277c.

Similar descriptions at Dalby last week averaged 254c and 274c with a top of 284c.

Tamworth on Monday took a step further with limited numbers of good cows selling in the 270s and 280s and reaching 290c/kg.

Grid rates in southern and central Qld remain unchanged at 600c/kg for 4-tooth ox and 500c for heavyweight cows.

Similar descriptions on southern NSW and SA grids have remained steady at 545c and 460c respectively since mid-September.

The story Cows nudging 300c/kg live first appeared on Farm Online.

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