SINCE May, when monthly beef exports to China peaked at 24,000 tonnes, it has been all downhill with steep drops in June and July and lesser falls in August and September to arrive at just over 10,000t last month.
Latest progressive figures from the Department of Agriculture for October, however, suggest that trade has turned around and volume is once again on the increase.
Data to October 22 puts export volume across all markets at almost 59,000t, which should mean a total of around 82,000t by end of month. If so, that will be a substantial 10,000t increase on September.
Korea and Japan appear on track for modest increases in tonnage while the US seems likely to continue its downward trend, which all points to China being the big mover.
Trade sources contacted have confirmed that there has been a recent uptick in trade with China in both the upper chilled beef segment and the lower end of the market.
A comment which appeared in Steiner's report last week points to a strengthening in the market for lean beef outside the US without specifically mentioning China.
It said: "Bids that were put in near or slightly under reference prices were quickly passed and packers in both New Zealand and Australia indicated they were well sold for the moment."
Looking to reasons for this activity, it would seem likely that positioning ahead of Chinese New Year is involved.
It will be remembered that China drove up the price of beef in late October/early November last year in an attempt to position itself before CNY only for it all to end very badly when the market fell away and left them trying to renegotiate high-priced deals.
Data to October 22 puts export volume across all markets at almost 59,000t, which should mean a total of around 82,000t by end of month. If so, that will be a substantial 10,000t increase on September. Korea and Japan appear on track for modest increases in tonnage while the US seems likely to continue its downward trend, which all points to China being the big mover.
No doubt the memory of that is still pretty fresh for the processors and traders involved so it would seem unlikely that history will repeat.
Nevertheless, the 'rising tide floating all boats' factor from China's renewed interest may serve to arrest the decline in US import beef prices.
That market has been drifting lower week by week on the back of struggling US domestic lean beef prices to the point where indicator Aust/NZ 90 CL blended cow is now US$35/cwt behind last year.
Brazil approaching FMD-free without vaccination
A DEVELOPMENT with significant implications for Brazil and its competitors in beef export passed by a couple of months ago largely unnoticed.
On August 14 the Ministry of Agriculture, Livestock and Supply announced recognition of six of its states/regions as free from foot-and-mouth disease without vaccination.
The states involved are Acre, Paran, Rio Grande do Sul, Rondnia together with the regions of Amazonas and Mato Grosso.
National recognition by the ministry is one of the steps needed to achieve international recognition with OIE (World Organisation for Animal Health).
To carry out the health status transition the states/regions implemented a suite of requirements including a structured program to maintain disease-free conditions and improved official veterinary services in accordance with the guidelines of OIE Terrestrial Animal Health Code.
The Brazilian claim to the OIE for international recognition has since been forwarded and the states will now undergo a rigorous evaluation process. Brazil expects to have OIE recognition by May 2021.
The upshot of this, as explained by Minister Tereza Cristina Dias, is that the states will then have the opportunity to expand their participation in international markets.
"More than 40 million heads will be ready for export to more demanding markets. Brazil is already free of foot and mouth disease with vaccination, but this block will be free without vaccination and that should improve the value of products from these places to export to markets such as Japan and South Korea which are more demanding and do not accept vaccinated beef," she said.
Brazil achieved OIE free from FMD with vaccination status in 2018.
Rain tightens numbers and price
LOOKING at the Bureau of Meteorology rainfall map for the week ending October 26 it is tempting to believe that the massive green band curving up the eastern seaboard from Victoria to the Gulf country of the Northern Territory is the first of good things to come from the La Nina influence which is officially under way in the tropical Pacific.
At Wagga on Monday the rain pulled numbers back to just 1400 and pitched feeders against processors for the trade and export steers on offer. Restockers found the going tough with virtually nothing on offer in the lightweight range.
In the heavy grown steers, feeders paid up to 416c for their share which forced processors to lift their sights to as much as 410c to secure their needs. That is getting up to as much as 750-760 dressed weight equivalent.
The cow job was not quite as hot but dearer nevertheless at 316c average for a good run of heavyweights.
A southern Qld processor said that they have not sourced out of Wagga for a good while and probably won't for the remainder of this yearc which is in contrast to the south-to-north flow that usually opens up in the final quarter.
While that supply pattern out of southern markets in recent years has been mostly to do with cows, many would remember the British-breed bullocks coming up to works such as Warwick Bacon with the top deck only partly loaded due to mass limits on NSW roads.
At Dalby last week the weather effect took lightweight steers to a new high of 602c and heavyweight cows up to levels comparable with the south.
For processors, filling kills remains a challenging task as it seems no amount of money will bring the sort of numbers forward that they would like to see.
There was only minimal change to Qld grid rates this week with some realignment occurring but the majors generally unchanged at 670c for 4-tooth ox and 600c for heavy cow.
Published grids for Wagga and Naracoorte also remain unchanged at 635c and 580c for similar descriptions.