20 June 2008

11 minute read

Oceania

Western Australia

Seasonal conditions influence numbers

Dry conditions in many parts of the southern Agricultural districts continues to be the biggest driving force as far as physical market numbers are concerned. Areas in the southeast in and around Esperance still await rainfall with a drought all but certain at this stage of the season.

Despite many producers having made the decision to dry seed the winter crop a lack of moisture has seen much of it fail to germinate and a lack of paddock feed continues to force stock movements off property. This is also the case in much of the wheatbelt, while areas in the Midwest saw the largest rainfall they have had all season, which has now given some hope to the first reasonable season in three years. The southwest however continues to enjoy a very strong winter season with early pasture growth above normal. Temperatures have now become cold and this has seen a slowing feed growth. The mild conditions in the north of the State are conducive to mustering and pastoralists are in full swing.

Live export movement is in line with this activity with the majority of boats now being loaded out ports in the north of the state. Rainfall early in the week halted trucking ability in the north but this was alleviated by the end of the week with supplies from the north back on stream. This saw considerably lower numbers sold at Midland early in the week, while the Great Southern sale remained unseasonally large due to the very solid supplies of lightweight store cattle.

Reduced slaughter capacity hits market

The gas crisis currently being experienced in WA has hit the processing sector hard with processors have had to shorten their working days with capacity being restricted by at least a third. This constriction was not evident at sales early in the week but impacted those held in the latter part of the week with a considerably weaker trade demand having been recorded.

Vealer supplies remained extremely low with the majority being lightweight calves. Demand from the local trade and retailer sectors continued strongly with the market maintaining its recent buoyancy. Supplementary fed yearling supplies was slightly more constricted but despite this the market eased due to a weaker demand from the trade with some commenting that a large volume of eastern states product currently on the market in the West has effected their ability to sell. Grass finished trade weight yearlings were in restricted number and once again a solid percentage was purchased by feeders.

The market for export cattle including steers, heifers, cows and bulls started strongly but fell away solidly as the week progressed with this now a possible trend for sometime.

New South Wales

Supply improves

Yardings increased substantially with the return to a full week of after a number of centres did not operate last Monday. As has been the case in recent weeks, many of the increased consignments comprised mainly unfinished young cattle. The largest offering was at Wagga where on-going drought continues to force producers to market stock. Dubbo also recorded a large increase but Gunnedah and Inverell had substantially smaller yardings, possibly reflecting the better rainfall in those areas.

The traditional winter decline in quality was evident at all centres, ensuring the relatively few prime vealers and yearlings were keenly sought. A number of centres reported wide price differences between the prime stock and those not able to meet slaughter specifications. Despite the large numbers of light condition stock, last week’s rain and stronger feedlot orders under-pinned a generally dearer market for most young cattle descriptions. Some of the larger rises for feeder steers were at Forbes (8¢ to 10¢), Wagga (2¢ to 6¢) CTLX Carcoar and Dubbo (2¢ to 4¢) and Tamworth (to 5¢). In most cases, the rises flowed onto other categories with prime slaughter cattle recording the highest prices.

Export cattle again generally declined in number and quality although there were a few exceptions. Gunnedah’s smaller yarding included a good run of 500 cows and Armidale and Dubbo offered some good quality grown steers. The younger and better quality steers and bullocks generally enjoyed stronger demand although the market for cows, while dearer, was more mixed as buyers adjust prices for declining yields.

Further gains

Young cattle prices generally improved after last week’s moderate rain but gains were modest and not all categories enjoyed the rises. Declining condition of vealers was largely responsible for a cheaper trend. Light restocking vealer steers reached 206¢ but lost 5¢ to average 185¢/kg. The few prime vealers were also slightly cheaper, most making from 200¢ to 227¢/kg. Light yearling steers made gains of 2¢/kg to restockers, averaging 170¢ and reaching 188¢/kg. Medium weight steers met improved competition from feedlots and gained up to 3¢ to average from 170¢ to 177¢/kg, depending on condition. Heavy C3 yearling steers to processors also gained 3¢ after reaching 202¢ and averaged 182¢/kg. Yearling heifers to all buyers were generally firm to 6¢/kg dearer.

The scarcity of grown steers and bullocks under-pinned gains of 1¢ to 5¢ for most with heavier 4 score bullocks around 10¢/kg dearer. Those heavy steers ranged from 150¢ to 197¢ with premiums for the 4scores which averaged 184¢ compared to 175¢/kg for the 3 scores. Bullocks averaged 9¢ dearer at 177¢/kg. Cows also gained ground despite generally plainer yardings. Most descriptions recorded rises of 3¢ to 5¢/kg. Light D2s averaged 109¢ while medium and heavy 3 and 4 scores averaged 129¢ to 141¢ after reaching 155¢/kg.

South Australia

Numbers increase

While cattle numbers fell at the SA LE, Naracoorte’s numbers rose marginally. Mt. Gambier yarded increased, with Millicent agents putting together just 360 head for its fortnightly sale.

There has been no indication that any Victorian processor closing for maintenance breaks that could affect South Eastern markets. A South East processor will have their last kill on July 3rd before resuming again on August 4th. SA’s other major processor will be operating on a reduced level over the next 6 weeks that will probably result in some affect on prices in the saleyards.

This will probably be more noticeable on the cow market that has been very strong for a month or so with prices steadily rising. Naracoorte had 721 cows penned that sold to a peak of 160¢/kg, while Mt. Gambier had 684 head as producers destock before the closure and slowdown take affect. It is still expected that while prices may retreat, the strong Victorian processor demand for cows will continue as numbers fall away there during the winter months, and processors operate at reduced levels without shutting down.

The SA LE’s sale featured some excellent quality drafts of supplementary feds that attracted very strong wholesale and local butcher competition with Victorian operators also active. While most South Eastern young cattle were of very mixed quality with only a few prime stock offered. However, there were good quality runs of beef and dairy cows that continued to attract strong processor competition.

Fluctuating price trends

The varying quality only led to fluctuating trends, this particularly noticeable on the young cattle. Most vealer steers finished with feeder and restocker orders due to most being in 1 and 2 score condition. These generally sold between 165¢ and 190¢ to range from 5¢ dearer to 11¢/kg less. Trade purchases were limited and were from 180¢ to 236¢/kg in a fluctuating trend. While prime vealer heifers to the trade sold from 180¢ to 229¢ at rates 11¢ dearer; feeder and restocker purchases were spread between 140¢ and 172¢ or 8¢/kg either side of unchanged. Yearling steers were 1¢ to 4¢ dearer to the trade selling mainly between 176¢ and 214¢, with feeders and restockers paying from 120¢ to 184¢ at rates fluctuating 7¢kg. Yearling heifer sales ranged between 7¢ dearer and 12¢ cheaper to a mixture of orders, and mainly from 133¢ to 187¢/kg.

Grown steer sales were unchanged to 1¢ less, with C3 and C4 sales between 174¢ and 188¢, or averaging around 335¢/kg cwt. Grown heifers were keenly sourced by wholesalers and processors between 138¢ and 170¢/kg. Most cows were 1¢ to 6¢ either side of unchanged, with carcase weights in a 275¢ to 300¢/kg price range.

Queensland

A small reduction in supply

There was a small reduction in supply of stock at physical markets covered by MLA’s NLRS, and overall quality of the young cattle still remains very mixed with most stock showing the effects of the dry winter conditions. At markets early in the week selected glass of young cattle received improved demand, while remainder were without much change.

However, as the week continued increased restocker and feeder activity lifter values for most lightweight descriptions. Lightweight yearling steers purchased by feeder operators or backgrounders at Dalby experienced a 16¢/kg lift, however half of this increase could be attributed to the better quality line-up. The combination of restocker and feeder demand also flowed onto the medium weight yearling steers with values generally improving by 4¢ to 8¢/kg. Slaughter grades of yearling heifers in the medium weight range also enjoyed some market improvement, however heavyweights remained firm following the lift in values the previous week.

Export grades of heavy steers and bullocks struggled at times, nevertheless average values experienced very little change from the previous week. Cows followed a similar trend with the largest samples of score 3 and 4 classes managing to hold on to a firm market. Prices for bulls realised a lift in value with a fair supply of bulls gaining up to 8¢/kg.

Old and new crop sorghum is finding some support from the market as the US corn futures move higher and domestic demand increases. The overall weather across the country is also a driving factor.

Improved feeder demand

Restocker and slaughter grades of calves generally hovered around the previous week's level, with calves to the trade just under 170¢, and restocker classes 177¢ with sales to 201¢/kg. The largest sample of vealer steers sold feeder operators 6¢ better at 193¢, with a few pens reaching 222¢/kg. Vealer heifers to the trade sold very close to firm at 169¢, with a couple of heavy grades to local butchers reaching 191¢/kg. The majority of yearling steers were purchased by the feedlot sector, with the lightweights attracting the most demand with most around 182¢/kg. Medium weight grades improved 4¢ to average 178¢, a few sales to 184¢/kg. Yearling heifers to the trade in the medium weight range averaged 4¢ better at 165¢, with sales recorded to 193¢/kg.

Medium weight grown steers suitable to feed lifted in value by 3¢ to average 165¢, with some to 177¢/kg. Heavy steers to export slaughter showed no change at an average of 166¢, with some supplementary fed lines reaching 178¢/kg. Bullocks made from 158¢ to 172¢ with most sales just under 165¢/kg. A large selection of medium weight 3 score cows averaged 119¢, while heavy grades in the same fat score averaged 130¢/kg. Good heavy cows met a firm market to average 137¢, with some old stud cows reaching 151¢/kg. Heavy bulls made to a top of 166¢, with most at 142¢/kg.

Victoria

Feeders active

Cattle markets returned to normal after the four day week previous. While the supply of cattle was similar to two weeks ago, some markets reported by MLA’s NLRS were smaller, and others were larger. However, the overall trend was for fewer young cattle, and more grown steers and cows were yarded.

With the realisation that supply of young cattle is going to be quite short soon, feedlots have shown greater interest to purchase a number of cattle to suitable to fill the gap in the coming months. A lot of these purchases are heifers for short term feeding (45 to 60 days), which has resulted in some better quality heifers brought. The direct competition between processors and feedlots for young cattle saw some reasonable price increases, although some averages were higher due to the quality purchased.

Another very good week was seen for producers able to supply very good quality cattle with the top prices equal to slightly higher. While all selling centres recorded some good quality, it was also said that the overall quality was plainer which is typical for this time of year.

Export processors were again setting a very positive trend for grown steers, cows and bulls. Prices for most classes of grown cattle were unchanged to dearer, but there was a little resistance to prices for the very plain cows, particularly lightweights. With the supply of grown continuing to fall, processors will soon start their winter maintenance closures, and this may affect prices.

Cows in demand

Prices for the top quality B muscle vealers and supplementary fed yearlings were equal to the previous week with most sales being from 210¢ to 251¢/kg. The C2 and C3 vealers and yearlings, which make up the EYCI, made mostly between 165¢ and 215¢/kg. With feedlots being so active in all markets, there was a large percentage of both C and D muscle steers and heifers purchased from 155¢ to 185¢/kg that will suit both the domestic and long term feeding.

Grown steers and bullocks all sold at firm to dearer rates with a reasonable number of C3 and C4 steers making from 170¢ to 192¢/kg. However, the plainer or older steers made from 145¢ to 175¢/kg. Demand for 90CL grinding beef in the US has pushed prices even higher, and this was reflected at cow sales. Prices for the leaner 1 and 2 score cows were very good with most making from 110¢ to 145¢/kg. Exporter processors and wholesalers continued to chase the better quality beef cows, which saw most make from 135¢ to 167¢/kg. Bulls also sold very well with better quality heavy bulls making from 135¢ to 178¢/kg.

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