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Strong Global Demand Keeps Australian Beef Market up in 2014

22 December 2014
Meat & Livestock Australia

AUSTRALIA - The Australian beef industry has been subject to a very challenging year in 2014, with the key cattle producing regions facing tough drought conditions for a large proportion of the year, according to Meat and Livestock Australia.

Deteriorating feed and water resources, particularly in Queensland and northern NSW, saw producers destock, extremely high slaughter rates and subdued restocker activity.

Export demand, however, has fortunately remained consistently strong throughout the year, absorbing the high supplies and providing support for the Australian beef market.

MLA said that while the first couple of months of 2014 brought very little rainfall to the key cattle producing regions of the country, a welcomed autumn break with substantial falls across New South Wales and Queensland saw cattle prices surge, albeit off a low base, in March and April. For much of the country, winter rainfall was disappointing, as large portions of South Australia, Victoria and southern New South Wales received below average falls, while most of Queensland received some rainfall in August, the first rain for many northern regions since March, which did improve the market somewhat.

November brought some relief to southern Western Australia, Victoria and into New South Wales, however it was not until early December that many of the drought stricken parts of Queensland and NSW received any decent rain.

Good falls across the eastern states over the past week or so have seen a contraction in numbers at most saleyards, and a significant rise in prices.

Eastern states adult cattle slaughter for 2014-to-date, as reported by MLA’s NLRS, has tracked nine per cent above the previous year, totalling 8.1 million head.

For the last six months particularly, adult cattle slaughter across the eastern states has hovered at historically high levels of around 170,000 head per week, whereas the average weekly total for 2013 was 142,153 head. Adult cattle slaughter in WA has only been marginally higher (1 per cent) than last year for the January to October period, totalling 342,748 head (ABS).

National adult cattle saleyard throughput for 2014 so far has been eight per cent higher than the corresponding period last year, totalling 2.76 million head. This amounts to just over 200,000 head more cattle nationally sold through NLRS reported saleyards compared to last year.

Saleyard throughput was highest in NSW for 2014 so far, with 1.1 million cattle yarded across the state – an increase of 20 per cent compared to last year. Yardings in Queensland totalled 708,943 head (back 14 per cent year-on-year), while Victoria and South Australia both yarded 16 per cent more cattle, at 614,927 head and 175,006 head, respectively. In Western Australia, 124,296 cattle were offered through saleyards in 2014-to-date, up 15 per cent, while throughput in Tasmania more than doubled year-ago levels, at 9,641 head.

Yearling steer (330-400kg, C3) saleyard prices have performed stronger overall in 2014, compared to last year, averaging higher across all states.

In New South Wales, yearling steers averaged 361¢/kg cwt for 2014, up 19¢ year-on-year, with the monthly average peaking in April at 390¢/kg cwt. C3 yearling steers in Queensland averaged 336¢/kg cwt in 2014, up 20¢ year-on-year, while equivalent grades in Victoria and South Australia averaged 355¢/kg cwt (up 20¢) and 327¢/kg cwt (up 13¢), respectively. In Western Australia, yearling steers averaged 423¢/kg cwt in saleyards for the year, 70¢ dearer than last year.

In the eastern states, grown steers (500-600kg, C4) performed best in New South Wales, with the 2014 saleyard price averaging 351¢/kg cwt, up 25¢ year-on-year, followed closely by Victoria, averaging 348¢/kg cwt for the year – 17¢ higher than the 2013 state average.

Grown steers averaged 341¢/kg cwt in SA saleyards this year, a 16¢ increase year-on-year, while the Queensland average finished 17¢ higher, at 331¢/kg cwt.
Medium cows (400-520kg, D3) averaged 289¢/kg cwt in Victoria (up 34¢ year-on-year), while in New South Wales and South Australia cows averaged 280¢/kg cwt (up 25¢) and 275¢/kg cwt (up 37¢). Medium cows in Queensland averaged 270¢/kg cwt in saleyards in 2014, 26¢ higher than last year. Saleyard prices in Western Australia made a significant improved year-on-year, with medium cows averaging 315¢/kg cwt – a 66¢ rise on year-ago levels.

Australian beef and veal exports for the January to November period have totalled 1.2 million tonnes – 17 per cent higher than the corresponding period last year. Fortunately, overseas demand has remained very strong during 2014, particularly from the US and China, assisting to absorb the high domestic supplies and uphold the Australian beef market.

 

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