Don't get caught without a date

Don't get caught without a date

Stock and Land Beef
Aa

With the difficult seasonal conditions, it's important not to miss securing a kill before the closure.

Aa

A REMINDER that Christmas is just around the corner arrived in the form of an email from Thomas Borthwick & Sons general manager Jason Delaney, advising closure and re-open dates for the Bakers Creek plant at Mackay.

Last kill for this year will be Thursday December 19, with the plant then closed until recommencement of operations with the first kill planned for Friday January 10.

The other purpose of the widely distributed message was to let suppliers know that space is still available prior to closure but to act sooner rather than later to secure a kill.

Mr Delaney said he was prompted to get the message out because of the difficult seasonal conditions and the tendency in the past for a lot of cattle to be left until the very last weeks of the year.

He said if people were teetering on the edge of holding on against the chance of rain he didn't want to see them caught out at the last minute with space fully booked and nowhere to go with them until next year.

If the feed is a bit problematic now, stretching out till then may be a real problem.

Obviously too the benefit from the processing side is to try to secure a full pipeline of cattle through to year's end to avoid the prospect of any lost time.

Because of proximity to the mining industry in central/north Queensland, the issue of lost time is a major concern because it goes to the heart of maintaining staffing levels needed to run the shed.

Glimpses of this can be seen from time to time when supply shortage affects all operators forcing them to go hard for often limited numbers in saleyards resulting in price spikes well above prevailing levels.

A recent example was the Emerald and Gracemere cow spike two weeks ago that attracted the attention of this column last week.

Mr Delaney said up until four weeks ago full kills were being maintained with generally two weeks' cattle in front.

Then things changed dramatically from a combination of factors which made it a day-to-day proposition trying to maintain a full kill.

Facing shortages of as much as 400 head a week, attention turned to the physical markets.

In the absence of any significant numbers in central Queensland saleyards, cattle were drawn last week from Dalby, Roma and even Dubbo.

Those fortunate enough a fortnight ago to have been in the right place at the right time benefited from the cow price spike at Emerald and Gracemere but noticeably the excitement was short-lived with cows at the same markets coming back by 16-34c/kg last week.

For now that would seem to answer the question posed in last week's column as to whether the 300c/kg barrier is likely to be broken.

In the meantime Bakers Creek is back out to one-and-a-half to two weeks in front.

Full details of other closure and re-open dates will be provided as they come to hand.

Game changes in 2020 and beyond

CHINA'S rapid ascension to market dominance and hopefully drought breaking rain are the factors likely to mark 2020 as a pivotal year in Australia for beef processing and production.

At the most basic level there is recognition that cattle are simply not going to be there for everyone to continue killing the numbers they have been killing so there will undoubtedly be upward pressure on price.

Obviously this is not a revelation as drought and herd liquidation have been with us since 2013 with only a brief intervention in consequence of the 2016 wet winter.

Processors have been anticipating a downturn in supply and if there is any surprise it is that it hasn't manifested itself sooner.

But the point is that no one is suddenly heading for the exits and everyone will be trying to get a piece of the pie.

How each individual business deals with the challenges ahead will vary depending on how and where they are positioned.

Some have already taken steps to reduce their need to be out in the market competing head-to-head for every animal they need for a week's kill.

A number of export processors have embraced service kills for other brand owners and domestic operators and in some instances have taken a minority position for their own operations.

Another strategy has been to reduce reliance on commodity beef and instead build supply linkages for market segments and brands.

For those businesses still doing grainfed fullsets, one 40ft container per week moves the purchase of 240 cattle further back down the supply chain to a backgrounder or store cattle producer.

For a small/medium size works doing 2400 head per week, two boxes of fullsets a week is a day's kill locked in.

Getting more return out of fewer cattle will be the model going forward into next year.

In that regard China will be all important because of its new-found dominance and HGP-free status.

For the moment the amount of cow beef going to China has taken the focus off ox but that will change the moment it rains.

From an Australian perspective China will instead be a major influence in the breakup cuts market.

In anticipation, major operators have already introduced HGP-free grids while others are in the process of doing so.

One target is better returns for subsidiary GF cuts that the EU HGP Free market does not particularly want.

Processors spoken to have indicated that a number of these cuts are already being redirected to China.

Grassfed branded programs are the other side of the ox story and these are now being pursued at locations that previously had a strong focus on commodity beef.

Processors recognise they can't compete against the Brazilians and Uruguayans in the commodity market and have got to do something different this end to stay in the game.

The story Don't get caught without a date first appeared on Farm Online.

Aa

From the front page

Sponsored by