Young get top prices

Restockers keen to make the most of the best spring in decades continue to push prices for young cattle skyward says the Weekly Times, defying a high Australian dollar and volatile export demand.

Young cattle prices maintained a four-year high with the Eastern Cattle Young Indicator (ECYI) closing last week at 366.25 cents a kilogram carcase weight after trading as high as 369.25 cents during the week.

Meat and Livestock Australia reported that this spike in the EYCI is "essentially being driven by the high prices being paid for vealer steers" although even grown cattle are bow selling to higher demand.

The paper says that heavy steer prices made modest gains last week to finish two cents higher at 335 cents a kilogram, led by a national high of 350 cents a kilogram in Victoria, despite mixed demand from export buyers.

Bull sales surge

Bull buyers are heading into the best spring for a decade according to a report in the Weekly Times as many beef producers opt to retain heifers to rebuild their herds, giving stud producers potentially strong demand for good bulls.

Angus Australia chief executive Peter Parnell told the paper that he believes that the oversupply of bulls in recent years is expected to balance out this year in the face of stronger demand.

Parnell says that producers "are seriously looking at rebuilding herds" and he "expects, that coupled with the excellent season, spring bull sales will be extremely positive".

According to data collated by the Australian Registered Cattle Breeders' Association, just under 137,000 beef cattle were registered in Australia last year, with almost 55 pc, or 74,203 of those, being British breeds.

Abattoirs fall foul

Cockroaches, flaking paint and rusty, worn equipment have all been found in Australia's export abattoirs according to an exclusive report in the Weekly Times.

An international audit of Australia's abattoirs found disturbing breaches of basic cleanliness in export facilities which the paper says are regularly checked by the Australian Quarantine and Inspection Service (AQIS).

The paper says that the final assessment, a report on the audit carried out by European Commission in March, is now listed on the European Union's website, where the whole world can see the flaws in our system.

While the EU rated cleaning and disinfection procedures were in line with EU requirements, and "only minor deficiencies were noted" further reading of the 25-page report exposes our system is far from perfect, although no abattoirs have been delisted as part of the audit process.

Rockdale deal not so Swift

A decision by the competition watchdog on the proposed takeover of Rockdale Beef by Brazilian red meat giant JBS Swift - also Australia's largest red meat processor - has been delayed for a third time says The Land.

The Australian Competition and Consumer Commission (ACCC) was due to report on a bid by the Brazilian-owned Swift Australia for the Yanco-based feedlot and processing business last month, but the ruling has now been postponed until September 9.

The paper says that both Leeton and Narrandera shire councils has put strong submissions to the ACCC favouring the bid - and the Meatworkers Union has also put its weight behind the takeover.

Rockdale Beef itself is keeping a low profile as the process drags on but Leeton Shire general manager David Laugher says the community is becoming annoyed at the saga, saying "it is more than frustrating, it is now bewildering".

Superfunds buy in

Superfund investors are behind a move to create up to 20 major regional stock selling centres through a boutique investment fund operated by Sydney company Palisade according to a report in The Land.

Palisade's regional infrastructure fund - which raises capital from the wholesale superannuation market - is backing seven new state-of-the-art saleyards, including just-approved plans for an $18 million greenfields project at Tamworth.

While superfund investors might shy away from agricultural commodities they perceive as volatile and complicated, investing in long-term regional infrastructure has become a lot more appealing.

Most saleyards in NSW are council owned, but many of those councils are now questioning whether saleyards ought to be part of their core businesses, especially given the expensive upgrades required to keep pace with changing OH&S and animal welfare laws.

AACo plans for $50 million Top End abattoir

The Australian Agricultural Company (AACo) has announced it has begun a feasibility study for a $50 million abattoir to be built in the Northern Territory according to a national Rural Press report.

AACo managing director David Farley says it could take up to two years to establish the facility to take advantage of increased slaughter demand following the recent tightening of Indonesian live cattle imports.

Indonesia - Australia's largest live cattle importer, but which is seeking to become a self-sufficient cattle producer within three years - is restricting imports of cattle weighing more than 350 kilograms in an effort to create local demand for its feedlots.

The restrictions affect AACo, which sells about 90 pc of its cattle held for live export to Indonesia, as well as exporters such as AWB's Landmark and Elders, which blamed the downturn in Indonesian demand in part for its poor trading performance this year.

One way to be a money maker

The economic evidence says that there is a profit to be made for cattle producers who understand exactly what it is that their consumers want according to a report in The Land.

The paper says that a symposium at the recent Agriculture and Applied Economics Association meeting in Denver, Colorado, examined trends that document a desire for high-quality beef.

Kansas State University livestock marketing economist Ted Schroeder served as a moderator for the event and told delegates Vertical Co-ordination in the Evolving High Quality Beef Market is not a niche industry.

Schroder says this is a market segment with true momentum behind it and "if the consumer is being responsive to this high-quality product - and we have good evidence this is the case - then we have to start addressing issues with respect to targeting and co-ordinating the beef chain towards that market".

Angus takes steak in new project

Angus Australia has received funding assistance from Meat and Livestock Australia under its Beef Information Nucleus (BIN) program to conduct a large-scale sire benchmarking project for Angus cattle according to The Land.

The project gives Angus breeders an opportunity to benchmark their prospective elite sires in a structured progeny test program and will see around 2000 commercial Angus cows joined by AI to 40 Angus bulls annually for three years.

In total the paper says that the project will generate approximately 3000 progeny, which 1500 steers tested for feed efficiency and slaughtered after feedlot finishing to contribute carcase and meat quality data.

In addition, fertility and calving ease data will be recorded on about 1500 female progeny and all sires, and progeny, will have DNA samples collected to enable the evaluation of future DNA markers or genotype tests.

Hard hitting issues on agenda

Balancing the equally important industry objectives of profitability and industry sustainability will be a central theme at Thursday's (September 2) Queensland 2010 Meat Profit Day in Charters Towers says Queensland Country Life.

A local organising committee headed by cattleman Roger Landsberg has put together a comprehensive program addressing many of the key issues facing northern beef producers in a hard-hitting but user-friendly format.

The program will be similar to that seen at previous MPDs held across Queensland, featuring several prominent industry and business experts as keynote speakers before participants break into smaller topical module sessions.

One of the keynote speakers will be scientific commentator Barney Foran, a research fellow with the Institute of Land, Water and Society at Charles Sturt University, a noted futurist who scrutinises "big picture" sustainability issues.

New markets seen for live-ex

The choice of Steve Meerwald as a keynote speaker at the Charters Towers Meat Profit Day on September 2 has taken on an elevated level of importance says Queensland Country Life since Indonesia's recent decision to curb live cattle and boxed beef imports.

Meerwald is the managing director of Perth-based Wellard Rural Exports, a major shipping operator and live exporter - and a major player in the northern Australian cattle industry.

The paper says that he has been asked to speak on current and future opportunities for northern cattle producers - a major topic after Indonesia, which last year took 760,000 cattle out of the north, said it will now enforce a weight limit.

Meerwald says Malaysia, Vietnam, the Philippines and even China are becoming increasingly reliant on imported goods and the latest twist in Indonesia could become a catalyst for cattle trade progress in these areas.

JBS chief to speak at AMIC conference

The head of the Australian division of the world's largest red-meat processing company will feature as a keynote speaker at this year's Australian Meat Industry Council conference on the Gold Coast says Rural Press.

Wesley Batista, president and chief executive of JBS Swift USA, which incorporates the Brazilian company's operations in both the US and in Australia, will be joined by Federal Agriculture minister Tony Burke and US Cattle Buyers Weekly editor and publisher Steve Kay at the September 1 and 2 conference.

Australian Processor Council chairman Gary Burridge says that this year's conference, operating under the theme Local Focus and Global Perspective, will look at the ongoing rapid changes in technology.

In particular, this will examine the globalisation of the red meat trade, the outcomes of the global credit crisis and significant changes at home in the regulatory environment for the red meat processing sector and domestic retail market.

Feed conversion field days

Australia's newest cattle feed efficiency testing station will host a field day on September 16 to help producers better understand how feed conversion data is recorded and why its measurement is important says Queensland Country Life.

The paper says that the field day at the facility near Rathdowney will also include discussion about the centre itself, and the project's growing links with DNA testing for feed efficiency.

Rathdowney producer Matthew Arkinstall established the facility in partnership with local lotfeeder Warren Drynan of Glenapp Pastoral Company with seed funding from Landcare Australia and Woolworths.

Working within a 20-gram accuracy, specialised software interacts with each scale and purpose-built NLIS reader to ensure that no data is missed and saves files every day to ensure no data is lost due to outside influences.

Beef's rising champions

The Cattle Council of Australia is aiming to get more young people contributing to the national policy decisions being made in the beef industry through a program branded as the Cattle Council Rising Champions Initiative says Stock and Land.

Launched last week, the paper says that the initiative aims to support young beef producers to provide input into the issues, challenges and opportunities for the Australian beef industry.

State farming organisations which are also members of Cattle Council will be asked to elect one young leader from their organisations to attend Cattle Council's annual general meeting in Tasmania where they will present their project that targets one of the "real-life" challenges facing the beef industry.

The young leaders will be supported by a mentor, who sits on the council, to develop their project. Cattle Council, president Greg Brown says they are asking young producers to "think strategically about the industry, to challenge a point of view and evaluate the practical ramifications on producers of certain policy decisions".

Warrnambool yards get soft flooring

Soft flooring is expected to be installed in the Warrnambool saleyards by November says Stock and Land but the long-term future of the yards, and the establishment of a new, privately-owned livestock selling facility in the area is still unclear.

Warrnambool Stock Agents Association president Anthony Mahony says that agents are expecting that all the saleyards' cattle-selling pens will have soft flooring by October or November.

The paper says that the Warrnambool City Council has the project out for tender and Mahony says that the agents, and most vendors, would like to see the new floors installed in time for the next round of weaner sales.

The agents are also continuing their negotiations with the Warrnambool City Council over its budgeted increases in saleyard fees, which are due to come into force at the end of this week.

Wodonga saleyard a step closer

A report in the Stock and Land says that a planning permit application for the long-awaited - and much debated - new saleyards for Wodonga has finally been submitted.

The proposed state-of-the-art facility, which has frontage to the Murray Valley Highway at Barnawartha North, is projected to inject $23 million into the border region economy during its development.

To be known at the Northern Victoria Livestock Exchange the project is the concept of Regional Infrastructure Pty Ltd and its Sydney-based parent Palisade Investments Partners, which currently owns and operates major regional saleyards at Tamworth, Carcoar, Rockhampton and Ballarat.

The paper says that a similar $18 million project the company has on its books for the construction of a new saleyards on a green fields site at Tamworth, has just recently been given the go-ahead.

MLA UPDATE

Spring in the step of livestock markets

27 August 2010

With one of the wettest winters across the eastern states in many years coming to a close, the prospects for a bumper spring continues to heavily influence livestock markets. Restocker and feeder demand continues to fuel prices for young cattle and light lambs, while supplies remain tight, as the much better season provides ample flexibility for eastern states producers to retain, finish and market stock - a welcome change from previous years.

Rain across northern NSW and southern Queensland again impacted cattle yardings at MLA's NLRS reported markets this week, with Thursday's prime sale at Roma cancelled due to the wet. With yardings nationally back 22% on last week, the cattle market largely maintained last week's prices, with the exception of cows, which jumped 8¢, to average 283¢/kg cwt nationally.

The EYCI's run above 360¢ has now stretched to four weeks, finishing Thursday at 365.25¢ - 16%, or almost 50¢ above the same period last year.

It was more of the same for lamb markets this week, with record prices across the three lightest national categories, even despite a 14% increase in yardings in NSW and small rise in Victoria. Nationally, trade lambs remained steady at the record high of 554¢/kg cwt, while heavy export prices slipped back to 5¢, to 538¢/kg cwt. 

Supply concerns drive US market higher

27 August 2010

Rejuvenated supply concerns have pushed the US imported beef market higher this week, with tighter volumes from Australia, New Zealand and Uruguay adding to lower US cattle throughout. Imports from Australia, Uruguay and New Zealand for January to late August were back almost 70,000 tonnes on last year, which has only been partly offset by increased volumes from Canada and Mexico.

The indicative 90CL US imported beef price rose for the seventh consecutive week, finishing at 165.5US¢/lb - the highest level since mid-May. In A$ terms, prices jumped to 380A¢/kg, an increase of 7% during the past month. 

Placements drop into US feedlots

27 August 2010

After four months of higher feeder cattle placements into US feedlots, July saw placements decline 6% on year ago levels, to 1.75 million head (United States Department of Agriculture - USDA). While placements declined year-on-year, the number was still above pre-report estimates, which resulted in a relatively neutral impact upon the market.

Despite reduced cattle placements in July, US fed cattle supplies should increase slightly over coming months, with lower cattle marketings during the past four months and higher cattle on feed numbers in April, May and June. While the increase in fed cattle supplies may put some downward pressure on cattle and beef prices in coming months, there are still several bullish factors in the market, including; lower frozen beef inventory levels in US cold storage facilities, higher pork prices, rising beef export volumes and tight imported beef supplies.

US beef production during July dipped 2% below year ago levels, to 1.01 million tonnes. However, weekly figures for August are showing beef production is now currently running approximately 3% above year ago levels.

Looking ahead, while a short term rise in fed beef supplies is expected, the recent USDA US cattle inventory report indicated a decline in the US calf crop. This will see fewer cattle placements over coming months, which in turn will lead to US fed cattle supplies tightening toward the end of the 2010 and into 2011. 

Cattle market wrap

27 August 2010

National cattle throughput falls

Cattle supplies across the eastern states were again restricted by heavy rainfall during the past week, with falls of up to 50mm in southern Queensland and northern NSW on Monday and Tuesday preventing the mustering and transport of some stock. As a result, national cattle throughput at MLA's NLRS reported physical markets fell 22% on the previous week.

Markets in Queensland were the most affected, back 48%, with numbers at Toowoomba Landmark down to around a third of last week's offerings. Similarly, at the Roma store sale, numbers were back 56%, with most of the cattle reportedly transported from outside the area prior to the wet weather. Dalby was reduced to only 32% of last week's numbers, although overall quality lifted - particularly for grown steers and bullocks, contributing to a dearer trend. The Roma prime sale was cancelled due to wet weather on Thursday.

In NSW, offerings slipped 20%, with the Monday sales at Wagga and Tamworth recording larger numbers, with cattle penned before the rain. On Tuesday, rain across the Gunnedah district contributed to a 69% drop in numbers, while on Thursday, offerings at Dubbo were halved.

However, both SA and Victorian offerings increased on the previous week, with most markets recording steady to larger throughput. Pakenham, where consistent wet weather over the past few weeks has had an impact on supply was the exception, along with SALE, where no vealers were offered.

WA numbers also increased, with Muchea on Monday recording 38% higher yardings than the previous week thanks to improved supplies of locally bred heavyweight vealers. Heavyweight yearlings, pastoral cattle and cows were all in limited supply. At the Great Southern Saleyard the yarding increased sharply, with more cows and store conditioned young cattle presented. 

Grown cattle prices hold up

Grown cattle prices generally experienced a dearer trend this week, rising on the back of reduced supplies, with numbers back in NSW and Queensland.

Nationally, grown steer offerings fell 12% on the previous week, while cow yardings were back 26%. Processor demand for grown steers was reportedly stronger, with a noted improvement in quality at some markets. Heavyweight grown steers and bullocks averaged 2¢ and 3¢ higher than last week, at 172¢ and 176¢/kg lwt, respectively. Medium weight grown steers on the other hand, eased 1¢, to 167¢/kg lwt.

Cow prices tended to be mixed, as well conditioned lines in the higher fat score bracket improved in price, while one and two scores eased slightly. Medium weight D2 cows averaged 2¢ higher, at 140¢, while heavyweight D3 and D4's gained 1¢ and 2¢, to make 143¢ and 149¢/kg lwt, respectively.

The eastern states Japan ox indicator closed Thursday's markets 1¢ higher than the previous week, at 185¢, while the US cow indicator jumped 6¢ higher, to 146¢/kg lwt. 

Fast food sales lift in Japan

27 August 2010

The extreme heatwaves that gripped Japan during summer helped to spur foodservice demand, with total sales and customer numbers during July increasing 2.5% and 2.9% year-on-year, respectively, (Japan Foodservice Association).

The lift in total sales, the first year-on-year increase in six months, was largely led by the robust performance of the fast food sector, with sales growing 6.5% on July 2009. Consumer preference for not cooking at home (due to hot weather), matched with the convenience and affordable prices, appeared to have contributed to the growth in sales for the sector.

Western style fast food outlets (namely hamburgers) improved both their customer numbers and expenditure per customer by 2.1% and 5.9% year-on-year, respectively. The Japanese style fast food outlets (gyudon beef rice bowl) increased customer numbers by 5%, but harsh discounting among the leading chains resulted in reduced sales (down 1.3%).

In the Australian beef export market this week, Japanese buyers reportedly faced increasing competition from international markets. Buoyant demand strengthened frozen beef export prices in both US and Australian dollar terms, while chilled prices are still relatively subdued due to limited interest. 

Brazil plans to expand exports and markets

26 August 2010

Brazilian President, Inácio da Silva, has encouraged the Ministers of Agriculture (MAPA) and External Trade and Industry Development to jointly develop creative ways to expand Brazilian meat exports and diversify into new markets.

According to President da Silva, the policy comes as a result of the importance of meat in total Brazilian exports (Agência Brasil).

In addition, a number of local small and medium sized plants have been experiencing financial difficulties during the year, resulting in a request by the Brazilian Beef Exporters Association to MAPA for a strategy to improve the situation.

MAPA is confident of obtaining market access improvements, given Brazil's "green" cattle status, counteracting concerns from international producer organisations, such as those in the EU. 

Korean beef imports remain high

26 August 2010

Korean beef imports maintained their momentum during July, jumping 21% year-on-year, to 21,575 tonnes swt, with shipments for the first seven months of 2010 up 21% on 2009 levels, at 146,244 tonnes swt (KITA). The increased demand for imported beef in the Korea market in 2010 has been reflected in higher volumes from both Australia and the US, assisted by a combination of strong consumer demand and low domestic cattle slaughter.

Australian volumes for the past month increased 14% year-on-year, to 11,648 tonnes swt, taking imports for January to July to 76,649 tonnes swt - 9% ahead of the same period in 2009. Korean imports of US beef increased 53% in July (7,000 tonnes swt) and 56% for the first seven months of 2010, to 44,591 tonnes swt. Beef imports from New Zealand in July (2,756 tonnes swt) increased 14% on the same period last year, with total imports so far in 2010 back 4% (23,311 tonnes swt).

While positive economic conditions and strong consumer demand has helped to fuel the rise in beef imports so far in 2010, a significant fall in Korean cattle slaughter and beef production has also assisted the rise in imports. In 2009, domestic Korean beef accounted for almost 50% of total beef consumed in the market (and averaged 48% for the past five years). In 2009, Australia held the majority share of the imported beef market at 58%, followed by the US on 26% and NZ with 15%.

Reflecting the reduction in Korea's domestic beef production in 2010 has been a 13% year-on-year decline in total cattle slaughter between January and June, with Hanwoo female numbers back 16%. Over the same period, the Korean cattle herd has reportedly increased 9%, to 3.3 million head - the highest number since 1998.

Given the reduction in cattle slaughter throughout 2010 and expanding herd, Korean beef production is anticipated to increase in the near-term, which will put pressure on imported beef volumes.

All eyes on South Asian beef markets

26 August 2010

Beef exports from Australia, US, New Zealand and Brazil to South East Asia and Greater China during 2009-10 all reached new records, as booming population, coupled with vibrant economic growth continued to boost demand for red meat.

Australian beef exports to South East Asia and Greater China during 2009-10 jumped 20% on the previous year to a record 131,292 tonnes swt. Although Australian exports were predominantly driven by the demand for manufacturing beef (Indonesia and Philippines) and alternative cuts (Taiwan, Malaysia, Singapore, China and Hong Kong), increased volumes of chilled and grainfed beef were also shipped to the region.

While relatively high prices remained the key constraint to US beef in South East Asia, shipments of US beef to Greater China (China, Hong Kong and Taiwan) continued to surge. During 2009-10, US beef exports to South East Asia and Greater China increased 33% to 118,899 tonnes swt - the highest volume on record.

Over the 12 months to June, New Zealand also exported 21% more beef to the region, reaching 76,060 tonnes swt, with large volumes of manufacturing beef sent to Indonesia and the Philippines.

Despite total beef exports from Brazil remaining unchanged during 2009-10, shipments to the region increased 12% compared with 2008-09, attributed entirely to the trade to Hong Kong. This is despite subdued trade to Malaysia, Singapore and the Philippines - the three main markets for Brazil in South East Asia.

Beef exports from other countries, such as India (July to March) and Canada, to South East Asia and Greater China during 2009-10 also experienced strong growth, with the momentum expected to continue into the near future.

Ukrainian meat production up

25 August 2010

Ukrainian meat production during the seven months to July increased 7% to 1.6 million tonnes cwt compared with the same period in 2009.

In 2009 output increased only 0.2% year-on-year (Agra Europe).

Brazilian cattle traceability changes underway

25 August 2010

The Brazilian National Agricultural Confederation (CNA - the largest and most important body representing Brazilian cattle and agricultural producers) supports the changes being made to the local cattle traceability system (SISBOV). The changes are expected to decrease the bureaucracy and costs of the current system (Beefpoint).

The new system will be based on a new Agricultural Management Platform Database (PGA) - a system where producers will be able to access online information relevant to their cattle Animal Transit Guide (GTA - a document which authorises the transport of animals between properties and from properties to plants).

According to CNA, the new system's main modification will be the option to choose property identification (for animals intended to be slaughtered for the domestic market or export markets which do not require traceability) or for individual identification (required by the EU).

The objectives of the current modifications to the system are to increase eligible cattle supplies for the EU (Brazil's highest value market), as currently only around 3% of beef exported from Brazil is shipped to this market.

Producers have been reluctant to join the current SISBOV system, as a result of the low premiums paid by meatpackers in contrast to the system's high costs, given the series of bureaucratic requirements. 

Argentinean beef exports remain tight

25 August 2010

Argentinean beef exports during July grew 21% to 14,221 tonnes swt month-on-month, but were still 65% down compared with July 2009. However, shipments during the calendar year to July dropped 50% to 101,679 tonnes swt.

The decline in exports comes as a result of the decrease in beef output registered since December (influencing the closure of a number of plants), and the tight control in granting export certificates, as the local government aims to control beef price rises.

Argentina's main export destination during the calendar year to July continued to be Russia, totalling 25,451 tonnes swt. However, shipments to this country were back 62% compared with the same period in 2009. Israel followed Russia with 15,172 tonnes swt, while Germany was Argentina's third largest market totalling 14,578 tonnes swt. 

Euro meat prices stable

25 August 2010

Consumer prices in the euro area (the economic and monetary union of 16 member states) rose to 1.7% per annum in July, the highest rate in 20 months, according to the European Index of Consumer Prices. However, the food price index rose by a slight 0.8% per annum, while meat prices remained stable.

Despite registering a rise, the price index is still lower than the European Central Bank's target of 2% per annum, and lower than the 2.1% per annum growth along the European Union (composed of 27 member states).

July's rise was driven by a rebound in energy costs, transport, and alcohol and tobacco prices, in addition to the Value Added Tax increases in Spain, Portugal, Greece and Finland.

MSA's Eureka moment

THE science behind the world leading Meat Standards Australia (MSA) meat grading system was recognised this week at Australia's prestigious science awards - the Australian Museum Eureka Awards.

The MSA research team won the category "Research by an interdisciplinary team" against tough competition from finalists iCinema Centre for Interactive Cinema Research and Nanopatch Influenza Vaccination Team.

Developed from the combined efforts of industry and the science community, MSA is the only grading system globally that is backed by robust fact-based consumer research.

The science uses consumer taste panels to verify results that meet consumer expectations for beef and sheepmeat eating quality.

"Put simply, MSA defines the pathways to good, consistent eating quality of beef and sheepmeat, and as a result provides an effective grading system in terms of many of the values consumers are looking for - consistency, tenderness and predictability of eating quality," explained Beef CRC chairman Guy Fitzhardinge.

"Australia can be proud that we have developed a system that is a world first in terms of predicting eating quality."

Earth needs more from less

MULTIPLYING the world's population by its consumption of food does not equal a healthy planet - the multiplication result is not balanceable or sustainable, according to Dr. Jason Clay, senior vice president at the World Wildlife Fund (WWF), reports the Land.

"We need to use less to produce more ... to restore the planet," he said in remarks to the Cattle Industry Summer Conference last month in Denver, Colo, US.

He was one of three speakers who addressed beef production's environmental footprint (Feedstuffs, Aug. 9).

Clay laid out a scenario in which the world's increasing population forces more and more habitable land into agricultural/food production every year and said this "has to be changed, and we can do that by intensification."

He noted that in 40 years, the world's population will increase 33 per cent - from almost 7 billion people today to more than 9 billion - incomes will triple and food consumption will double. Clay said 70pc of the world's population will live in cities, and "we need to address this" because the "impacts" people and food production/consumption have on the land and water "that are acceptable today with 6.8 billion people will not be acceptable with 9.1 billion people."

"We will have to get better" at producing more food with fewer resources, he said.

Clay said agriculture's footprint on the Earth must be "frozen" but emphasised that this doesn't mean decreasing or "not expanding" production; rather, agriculture/food producers need to become increasingly more efficient.

Putin to defend cattle herd

RUSSIAN Prime Minister Vladimir Putin will not let the domestic grain crisis eat into the country's cattle herd says The Weekly Times.

Following drought and severely downgraded crop forecasts, Mr Putin this month closed grain exports in order to curb domestic food-price inflation and protect feed-intensive industries such as cattle.

"We cannot allow an increase in domestic (grain) prices and we need to maintain the number of cattle," Mr Putin told a Cabinet meeting.

The move follows a decade of reinvestment in it's poultry and beef industries - the latter with exports of live dairy and beef cattle predominantly from Australia and Canada.

In the first three months of this year, 7116 Australian cattle were exported to Russia.

The Russian cattle herd now stands at about 17 million head of mostly dairy cattle, but that figure is declining due to high input costs - particularly feed - and poor beef wholesale and retail prices.

Restrictions prompt AACo abattoir plan

AUSTRALIAN Agricultural Company has launched a feasibility study for a $50 million abattoir in the Northern Territory but managing director David Farley said it could take up to two years to establish the facility, which would take advantage of increased slaughter demand following Indonesian import restrictions, according to The Land.

Indonesia, Australia's biggest live cattle importer, is seeking to become a self-sufficient cattle producer by 2014 and is restricting imports of cattle weighing more than 350 kilograms to create local demand for its feedlots.

The Australian Financial Review reports the restrictions have affected AAco, which sells about 90 per cent of its cattle held for live export to Indonesia.

Cows to gain in bull run

The Weekly Times reports the US market underpins the positive price outlook being painted for Australian cattle producers by Meat and Livestock Australia.

It comes amid forecasts that the US cattle herd will bottom out in the next 12 months at an estimated 91.9 million head, the lowest number since the late 1950s (see graph).

Combine this low beef supply with anticipation of stronger consumer demand as the US recovers from the global financial crisis, and the outcome should be better prices that will benefit the Australian industry, particularly the cow market.

Last month, leading US beef industry newsletter, CattleFax, released its long-term forecasts for the US cattle market.

It stated: "The bottom line is that the supply side of the market is extremely bullish over the next few years and even given just slightly improving beef demand, prices will be sharply higher."

In financial terms, the forecasts are that US beef prices will improve 10-12 per cent next year, with similar rises likely in following seasons as supply falls shy of demand.

MLA economist Tim McRae said if the price predictions proved accurate, it spelt good news for Australian producers.

"Considering the links between US and Australian cattle prices, it certainly looks good," Mr McRae said.

But the bullish forecasts for beef could fall short of reality if the US economy doesn't improve as analysts hope and consumer spending remains restricted.

Mr McRae said economic recovery in the US, and also Japan, which is the other significant market for Australian beef, would play a major role in determining the strength of cattle prices in the coming year.

Elite Angus traits traced

ANGUS breeders have the chance to take part in Australia's largest-ever single breed progeny test reports The Weekly Times.

Designed to find the elite sires of tomorrow, the Angus Sire Benchmarking Program, run by Angus Australia with funding from Meat and Livestock Australia, will use 40 sires over 2000 commercial Angus cows each year, for three years.

In all, 3000 calves will be produced for the program.

The steers will be tested for feed efficiency and slaughtered after feedlot-finishing for carcass and meat quality data, and the females will be tested for fertility and calving ease.

Beef CRC test puts cattle in poll position

DEHORNING, labour-intensive for people and painful for cattle, is being pushed towards redundancy with the release of a polled gene test by the Beef CRC and partners reports The Land

The test is being handed to the beef industry not as a final product, but with the aim of getting much wider field testing to tighten up understanding of how accurately it predicts polled offspring in different breeds.

Validation work has already been done on seven breeds - Brahman, Santa Gertrudis, Droughtmaster, Limousin, Hereford, Brangus and Belmont Red - to give producers confidence in the product.

Land barons defy values

The Land reports that the two largest landholders in the country - S Kidman & Co and the listed Australian Agricultural Company - have yet to revalue their northern Australian cattle stations despite significant price drops in recent months.

The Australian Financial Review reports that when prices for cattle stations surged, AAco recorded some massive uplifts, such as a 14 per cent increase in 2005 and an 18 per cent rise in 2007.

Only in AAco's 2009 full-year accounts did the first hint of a correction appear, in a 1pc drop in value. In the past six months, there has been no change at all.

However, in the past year signs of falling values for cattle stations have begun to filter through around the country, with stations selling for 30pc below their 2007 peak as drought, high levels of debt, tighter credit and a higher Aust­ralian dollar made buyers scarce.

MLA REPORT

Positive spring outlook maintains prices

Good follow-up winter rainfall has now given producers in the eastern states confidence for one of the best spring seasons in many years. Accordingly, restocker interest on light young cattle has been strong at all auction sales, with some extraordinary prices being paid for well conditioned young steers.

Crop conditions are also extremely good and this should enable producers to have plenty of supplementary feed, ensuring good cattle growth rates heading into spring.

With plenty of feed at their disposal, southern producers have been particularly active in their drive for young cattle, with numbers very tight in Victoria. In response, some lots of northern NSW cattle have made the journey south in recent weeks.

With young cattle supplies tight and restocker demand very strong, prices for young cattle have continued to rise. The Eastern Young Cattle Indicator (EYCI) reached 369.25¢/kg cwt on Tuesday - the highest point in four years, essentially driven by the high prices being paid for vealer steers.

Over-the-hooks values also trended dearer, with the only downturn in prices being seen for direct consignments of feeder steers - which is typical for this time of the year. Prices are likely to steady somewhat over the coming weeks, as more numbers become available and restocker interest eases back to more normal levels.

The national vealer steer indicator maintained last weeks rate of 202¢, while the trade steer indicator rose 2¢, to finish at 193¢/kg lwt. The EYCI finished Thursday 5.5¢ above last week, at 367.5¢/kg cwt. The Japan ox indicator lifted 2¢, to 184¢, however the cow indicator dropped 2¢ on last week to 135¢/kg lwt.

Northern numbers emerge

Recent rain and wet conditions which had held up stock transport eased this week across Queensland, with saleyard numbers swelling on last week. National saleyard numbers at MLA's NLRS reported saleyards rose 10% on last week, with producers also keen to capitalise on the higher prices.

Yardings in Queensland increased by almost 50% on last week, with Longreach nearing 5,000 head, while the Roma store sale and Dalby both exceeded 4,500 head. The Roma prime sale on Thursday also saw increased numbers, as the backlog of cattle from last week flowed into the saleyards.

In contrast, the south eastern Queensland markets of Toowoomba, Silverdale, Moreton and Warwick recorded seasonally low yardings, with Warwick numbers dominated by young cattle. Longreach yarded large numbers of vealer heifers which had a downward impact on prices; however, any light vealer steers in forward condition were strongly contested.

Upwards revision for US beef imports

US beef import forecasts for 2010 have been revised up after a 2% year-on-year increase in June and a slow down in US domestic cow slaughter. However, even after the upwards revision, beef imports for 2010 are still forecast to come in at 1% below year ago levels, at 1.18 million tonnes cwt (USDA World Agricultural Supply and Demand Estimates report).

Driving the lower beef import volumes during the first half of 2010 had been tight supplies from Australia, New Zealand (NZ) and Uruguay. Competition from other markets and lower beef production has seen Australian beef exports to the US lower in the first half of this year. However, export volumes did lift by 2% to the US during July.

According to the US Customs Bureau, beef imports from Canada and Mexico are currently tracking 13% and 39%, respectively, above year ago levels. Despite a slow start to the year, imports from NZ over May and June were also at higher volumes, given an increase in NZ beef production. Recent NZ export data, however, shows imports to the US are anticipated to fall below year ago levels again in coming months.

US beef imports in 2011 are expected to increase 7% on 2010 levels, with the USDA forecasting a total of 1.26 million tonnes cwt. MLA is forecasting Australian exports to the US to recover 13% in 2011, to 270,000 tonnes swt.

Rain for the south

Rainfall for the past week was spread across southern Australia, with further much needed falls recorded in WA, while warmer temperatures hit Queensland. Pockets of WA and SA received up to 50mm, while a southerly front brought wind, rain and snow to parts of NSW and Victoria, with Victoria's high country recording some very heavy falls. Forecasts are for rain to continue across most of Australia over the next few days, continuing the wet winter across many regions.

Banks forecast A$ to stay high

The past fortnight capped off another volatile period for the A$, which shed over 2¢ or 3% of its value in recent days, to finish Thursday at 90US¢ - 8% higher than a year earlier.

A higher A$ has weighed heavily on export prices this year, with several periods of extreme fluctuations also proving difficult. While many exporters would hope that the A$ starts to decline heading towards 2011, forecasts remain mixed, with most of the major Australian banks predicting a range between 85-92US¢ through to June next year.

The A$ also lost ground against the Japanese yen and the Korean won over the week, finishing at 77¥ and 1051won, respectively.

Retail and foodservice prepares for Korean gift set demand

Australian beef exports to Korea totalled 5,592 tonnes swt from 1-16 August this year - with chilled beef making up 27%. Strong volumes continued with a slight rebound in chilled products, as this segment represented only around 25% of total exports in the last three months.

Prices for imported beef cuts in the Korean wholesale market remain steady, as Korean retailers and foodservice outlets prepare for the peak demand season ahead of Chuseok (Harvest Festival).

Korean department stores are ready to receive orders for Chuseok gift sets from 20 August to 5 September this year (Kukmin Ilbo). Lotte department stores
will provide meat and fruit sets at a 5% discounted price, while the Hyundai department store will provide meat, fruit and wine sets at a 5-40% discounted price.

In addition to retail, the majority of five-star hotels are also launching their Hanwoo (domestic), Australian and US beef gift sets (Segye Times). The Imperial Palace Hotel in Seoul offers its "First Class Gift Set" that includes Korean assorted beef cuts, such as rib eye, tenderloin and brisket and Australian premium rib eye and tenderloin along several seafood items (JoongAng Daily).

Crisis point for Indonesian market

The meat and livestock supply situation into Indonesia has deteriorated further in the last seven days, now taking shape as the most serious crisis facing the industry since the days of the Asian currency meltdown in 1998, according to a report in Queensland Country Life.

Without warning last week, Indonesia announced it will greatly limit volumes of both live cattle and boxed beef entering the country for the remainder of 2010.

Chief executive of the Australian Livestock Exporters Council, Lach MacKinnon, said ALEC had been told permits would be cut by more than 300,000 head.

The Indonesian Government announced it would allocate 452,000 head worth of permits for cattle imports covering the period January 1 to December 31 this year. Given that 300,000 cattle had already been imported at the end of June, that meant only another 150,000 head could be shipped for the remainder of 2010. Of those, 60,000 are already committed on existing import permits, meaning only another 90,000 uncommitted cattle are likely to leave Australia. Indonesian feedlots, as a result, will face massive undersupply problems.

Similarly Australia's boxed beef and offal exports to Indonesia are likely to drop to 10-15pc of earlier shipments.

All that amounts to a significant deficit in terms of meat protein requirements in Indonesia in the post-Ramadan period later in August.

The announcement comes on top of earlier Indonesian policy decisions to limit cattle import weights to 350kg and apply a virtual handbrake to trade through limiting access to import permits.

Indonesia is currently Australia's fourth most valuable market for the combined live export/beef trade.

At the heart of the decision is a politically-driven desire to gain self-sufficiency in beef and other key commodities. The current strategy is designed to stimulate domestic cattle breeding programs lured by high feeder cattle prices, but few people see that objective as realistic.

Aside from the direct impact on cattle price and supply dynamics out of northern Australia, key industry stakeholders this week said the development has some other alarming longer-term implications.

USDA to ban antibiotics?

A USDA official has told a Congressional panel there is likely a link between agricultural antibiotic use and antibiotic resistance in humans, according to a report in The Land.

"USDA believes that it is likely that the use of antibiotics in animal agriculture does lead to some cases of antibacterial resistance among humans and in the animals themselves, and it is important that these medically important antibiotics be used judiciously," Dr. John Clifford, APHIS's deputy administrator for veterinary services, told the US House Committee on Energy and Commerce's Subcommittee on Health during a hearing last month.

"We need to work together to conduct research and develop new therapies that protect and preserve animal health, without increasing the risk of resistance to medically important antibiotics," Clifford said in prepared testimony.

To date, there is no conclusive scientific evidence indicating that the judicious use of antibiotics in cattle contributes to antimicrobial resistance in humans.

In fact, the non-scientific removal of antibiotics in Europe actually led to increased animal disease and increased use of therapeutic antibiotics with no demonstrable improvement in human antibiotic resistance patterns.

Best rain this winter soaks parts of SA

Parts of the Adelaide Hills, Mid North and West Coast this weekend were soaked by their best rain this winter, and best August rain in years, says Stock Journal..

Showers were so widespread across southern and northern agricultural areas that almost everywhere got some.

They were most persistent in the Adelaide Hills due to a low bringing several bursts of showers amounting to 30 to 50 millimetres and minor short-lived flooding.

'Average' rain feels like a deluge

The ABC reports farmers around the country may have welcomed good winter rain, but the weather bureau says falls have actually been about average for this time of year.

Over the last week, there's been good rains across most of south-east Australia, and up into Southern Queensland.

Over the past six months, most of the country has received good rain, except for parts of Western Australia and southern Tasmania.

Doctor Karl Braganza, from the Bureau's National Climate Centre, says the drought has reset the meaning of "normal".

"The rain we've actually got is probably average, or just above average, for some parts of the country," he says.

"Particularly in the south east, those parts of the country have been quite drought-affected over the last 12 years.

"So just getting an average amount of rainfall has seemed like a decent amount of rainfall."

Barley rides wheat wave

Futures prices for barley are set to reach $293 a tonne next month as the cereal follows the rising fortunes of its more dominant cousin, wheat, according to the Australian Securities Exchange, as reported in The Land.

Agracom barley trader, Richard Perkins, Quirindi, said barley was being dragged along by the higher prices of wheat.

He said usually there was a $10/t to $15/t premium for old crop feed wheat compared to barley, but recently it had narrowed to about $5/t - and he wouldn't be surprised if they were on par.

Mr Perkins said Russia applying the brakes on its export market would significantly boost demand for Australian barley in the European market.

He said it was a good time to be a barley grower, although buying it had become pricey.

"Russia has certainly thrown a cat among the pigeons."

European drought problems were the main reason for the jump in prices, according to Mr Robinson.

"There is a correlation between wheat and barley, especially in the feed market, but it's difficult to tell if barley prices will continue to rise," he said.

Season balances on a knife's edge

Season 2010 is sitting on a razor's edge with yield estimates falling at a rate of knots due to serious soil moisture depletion, say Farm Weekly..

Some crops are looking reasonable at a few locations across the agricultural division, but the Wheatbelt is mostly dry and parched on the back of a pessimistic rain outlook.

Farm advisers have also started talking to growers about washing out some grain contracts that were executed on what appeared to be a conservative and well-measured hedge only weeks ago.

Last week bulk grain handler CBH revised WA's seasonal grain production estimate downwards from 9.5 million tonnes to about 8mt, to reflect the Wheatbelt's extreme lack of moisture in the face of poor rainfall and lingering warm weather.

The Agriculture and Food Department is predicting the crop estimate could drop to 6mt if rain fails to appear by the end of August.

The situation is producing similar signs to the last major drought in 2006, when WA produced only 6.4mt.

The State Government has already triggered the Dry Seasons Advisory Committee (DSAC) to help growers and industry deal with the pending disaster.

Reinventing agriculture's 800 pound gorilla

AA Co chief David Farley's recent description of Swift Australia as ‘the 800 Pound gorilla' might imply that the company is not only large and potentially menacing, but also a slow-moving, less-evolved species not well-equipped to handle modern life, as reported in Queensland Country Life.

Swift's managing director Iain Mars would dispute that, judging by the tone of his presentation to a Rural Press Club breakfast during Brisbane Show.

Mr Mars argued that the nation's largest processor has undergone a dramatic transition over the past three years since the Australia Meat Holdings days, moving from a volume-at-all-costs commodity focus, to a business model driven much more by customer-needs and brand-savviness.

Along the way Swift has invested $330 million in ‘new money' in the push for greater efficiency, consistency and throughput through its Australian operations.

Swift Australia is part of the world's largest food processing company, Brazilian-controlled JBS, which now processes a breathtaking 90,000 cattle daily in 70 plants in five continents. That does not include JBS's interests in poultry, pork and now, lamb and goats.

Not without reason, the company's dramatic expansion in Australia since 2007, with ten processing plants (soon to be 11, if the ACCC finally approves Swift's purchase of the Rockdale operations in southern NSW) has unsettled some industry stakeholders over potential for market dominance.

"We think over the past three years we've transformed ourselves from being a single commodity entity into 15 nimble, proactive, consumer-focussed production units," Mr Mars told the Ekka audience.

"That's been achieved in a number of ways, just one of which has been investing in our businesses so we are not tied to any one market."

He used the example of Dinmore, where Swift had invested heavily in plate freezing capacity sufficient to freeze 34,000 beef cartons daily.

That had greatly reduced the plant's reliance on the Japanese chilled fullset market, providing greater flexibility to move in different directions as markets dictated, instead of being ‘held to ransom' by customers because of Dinmore's operational limitations.

Meat: Eco-enemy to eco-friend

News stories went from ones accusing meat of being "the new eco-enemy" to stories that actually promoted meat as being the new eco-friend following publication of recent research by scientists at the University of California-Davis (UC-Davis), says The Land.

The research, "Clearing the Air: Livestock's Contributions to Climate Change", responded to a United Nations Food & Agriculture Organisation (FAO) report's conclusion that livestock production accounts for 18 per cent of all carbon emissions, i.e., greenhouse gases (GHGs) - a larger percentage even than transportation.

The FAO report, "Livestock's Long Shadow", was published in 2006 and prompted considerable negative publicity that livestock production - and, therefore, meat production - was a major polluter.

However, this conclusion missed several marks, according to Dr Frank Mitloehner, an air quality specialist and associate professor of animal science at UC-Davis and one of the authors of "Clearing the Air".

He offered his remarks on the FAO report and UC-Davis research to the opening session of the Cattle Industry Summer Conference July 30 in Denver, Colo.

First, Dr Mitloehner, citing the Environmental Protection Agency, noted that the major contributor to carbon emissions is energy related, that US agriculture in its entirety accounts for only 5.8pc of GHGs, and that livestock production accounts for just half of that amount.

He said his research, which found agriculture's entire accountability to be 5.4pc, confirmed this.

Dr Mitloehner said work like this is based on a lifecycle analysis (LCA), which has three levels. LCA 1 work looks at direct emissions, i.e., manure and urine from a cow grazing in a field. LCA 3 work looks at all direct and indirect emissions - from crops to processing.

He said FAO compared an LCA 1 for transportation to an LCA 3 for livestock production and drew an apples to oranges conclusion.

Second, Mitloehner said FAO also did its research on a worldwide basis and did not consider the extent to which deforestation in parts of the world where forests are being cut down to graze livestock degrades land and entraps GHGs, whereas in other parts of the world, such as in the US, agriculture contributes to net carbon sequestration of forests.

AACo posts loss, but turnaround in works

The Australian Agriculture Company (AACo) has today posted a $12.2m loss in its half yearly report to June 2010, but remained upbeat about its turnaround prospects, says The Land.

The loss was an $18.1m improvement on the same period last year, and shares have remained steady at $1.53 since the start of today's trade.

Chief executive David Farley said in a release today that the growth was the result of new initiatives, including its change in cattle trading strategy to a 12-month plan.

"We expect the turnaround to progress during the medium term, with a two- to four-year horizon. The business is well positioned to grow shareholder value over this time," he said.

The company is preparing to roll out its breeder alliance program, in which selected property owners will breed cattle specifically for the company, which will help free up AACo property for increased trading cattle holdings.

Above average rainfall and positive seasonal conditions were also attributed to the strong growth, with revenue increasing $31m to $105m for the period.

Food facts by phone

It mightn't be long before customers at the supermarkets can scan a barcode and instantly get the full background of a product on their mobile phones according to a report by ABC News.

Quick response codes or two-dimensional barcodes are being introduced to some agricultural products sold in Australia.

Meat and Livestock Australia's Samantha Jamieson says it was a huge success on Australian meat sold in Japan, and she hopes to see the mobile phone codes expand here.

"They can see what our traceability systems for Australian beef was, what QA (quality assurance) systems we have," she says.

"Then we can go into things about what different cuts there are and what recipes you may wish to cook, nutritional content of those different cuts etc etc.

"So you can utilise it for a range of different information."

MLA Update

A$ and recession hit Aussie export beef values :  13 August 2010

The value of Australia's beef and veal exports declined for 2009-10, as the high A$, recessions in major markets and lower export volumes all combined to reduced returns. Beef and veal exports for the past fiscal year were valued at A$4.11 billion - 19% below the record $5.05 billion recorded in 2008-09 (Global Trade Atlas).

Returns for Australian beef experienced a significant hit from the global financial crisis and recessions, primarily in the US and Japan, as consumers turned towards cheaper beef items and end-users looked to keep prices discounted to maintain demand. The rise of the A$ throughout 2009-10 only accentuated the influence of the sluggish demand to Australia's two largest markets, forcing Australian exporters to absorb much of its impact. The A$ averaged 18% higher against the US$ in 2009-10, 9% against the Japanese yen, 18% on the Euro and 10% on the Korean won.

Reduced export volumes also played a role in the fall in total returns for the year - a combination of lower beef production and sluggish export demand. Beef and veal exports fell 7% year-on-year, to 898,961 tonne swt, with exports back 4% to Japan and 25% to the US (DAFF).

Beef and veal export values for 2009-10 declined 19% to Japan, to A$1.7 billion. Export values to the US dropped 34% year-on-year, largely due to lower volumes, to $816.1 million, while returns from Russia (down 34%, to A$114. million) and the EU (down 33%, to A$85 million) also declined. Export returns to Korea were steady year-on-year, at A$599.5 million, as total shipments increased 10%.

Beef export values for the year increased 18% to Hong Kong ($56.9 million), 22% to Indonesia ($169.2 million) and 10% to the Middle East ($98.2 million). However, the rise in export returns to these markets in 2009-10 were well below the corresponding increase in volumes, at 51%, 31% and 40%, respectively.

Record Chinese beef imports in 2009-10 :  13 August 2010

China's beef imports during June soared 152% year-on-year, helping lift total imports for the 2009-10 fiscal year 136%, to a record 17,776 tonnes swt.

Supported by underlying strong demand, subdued domestic production and high local beef prices, the rise in imports was due to a 150% surge in frozen beef imports, offsetting a 33% fall in chilled volumes.

Beef imports from Australia for the year increased 38%, to 5,566 tonnes swt, accounting for 31% of the total imported beef market. Australia dominated the imported chilled beef market (mainly loin cuts), with a 94% market share.

Despite Australia's chilled beef dominance in 2009-10, Uruguay was the largest supplier of beef for the period, at 7,801 tonnes swt - 44% of the total imported market. The jump in Uruguay shipments in 2009-10 was helped by lower comparative beef prices.

Imports from New Zealand and Brazil for the period increased 120% and 186%, respectively, year-on-year, to 3,137 tonnes swt and 1,272 tonnes swt.

Grain prices ‘Russian' higher :  13 August 2010

In great news for Australia's grain producers, but not so welcome for feed intensive industries, world and Australian grain prices have surged in recent weeks, driven by adverse weather events across many northern hemisphere countries. Since the previous grain price spike in 2007 and 2008, the Australian lot feeding industry has been slowly recovering, with the much lower grain prices throughout 2009 and early 2010 helping to partly offset the impact of the high A$ and sluggish demand overseas.

Although wet weather in Canada remains a concern, the big story over the last few weeks has been the extreme drought in southern Russia around the black sea region, traditionally a very large producer and exporter of grain. Prices initially rose on concerns over how this drought, reportedly the worst on record, would impact the spring wheat crop, and hence world trade. But the situation kicked up a gear last week when the Russian government banned wheat exports until the end of the year in an effort to curb domestic food-price inflation and protect feed intensive industries. This resulted in global grain future prices jumping higher, and although some of these gains have now been undone, market fundamentals look to have shifted to concerns about supplies for the year ahead.

With the surge in prices, Australian east-coast grain growers now find themselves in an enviable position, facing unexpectedly higher prices combined with an excellent growing season. While conditions are much tougher in Western Australia, rainfall during recent days has provided some hope for this years harvest.

Feed grain prices are now significantly higher than just a few months earlier, when most market reports revolved around high stocks and a generally bearish picture for grains. Riverina feed barley is currently 44% dearer than three months earlier at $230/tonne, with feed wheat around 22% higher at $275/tonne. Northern feed prices have fared similarly, with Darling Downs wheat up 18% since May to $260/tonne, and sorghum and barley up 26% and 21% to $220/tonne and $242/tonne, respectively (Profarmer).

Cattle market wrap :  13 August 2010

Feeder buyers keen for yearlings

Feeder demand at the physical market has increased noticeably over the past couple of weeks, with the supply of suitable cattle tight.

Excellent seasonal conditions and a bright outlook for the coming months has encouraged producers to hang onto young cattle to achieve extra weight gain. Furthermore, feedlot buyers are faced with extra competition at the physical market from producers looking for stock.

The elevated prices being paid at the physical market is despite the high A$, which is restricting export demand, and rising grain costs. Grain prices have surged over the past week, influenced by forecast production falls in Russia. Feeder paddock sale prices, as collected by MLA's NLRS, have remained relatively stable over the past month, with contributors looking to lower rates, but unable to do so because of the need to secure adequate numbers.

After experiencing significantly dearer prices last week, light and medium weight yearling steers purchased by lot feeders in the eastern states at the physical markets averaged 205¢ and 195¢/kg lwt, respectively. Yearling heifers purchased by feeders recorded a dearer trend. Lightweights gained 2¢ compared with last week, to average 187¢, and medium weights eased 3¢, to 181¢/kg lwt.

After the completion of Thursday's markets, the eastern states feeder steer indicator settled at 200¢/kg lwt, to be 2¢ lower than last week and 21¢ above the same time last year.

Grown cattle prices hold up

On the back of tight supply this week and last week, grown cattle supplies generally held firm, with some categories experiencing a dearer trend.

Despite the high value of the A$, processors were still keen to secure enough cattle to fill orders and maintain a full kill week. Restockers also helped to boost prices for young lightweight cows, which averaged 5¢/kg lwt higher than last week nationally.

Grown steers also remained firm, although lightweights gained 11¢ nationally, and bullocks averaged 3¢ higher at 174¢/kg lwt.

Rain dictates supply

National cattle throughput at MLA's NLRS reported physical markets increased 9% compared with last week.

Markets held in the first half of the week generally had larger yardings after rainfall restricted sales last week. However, sales held in the latter half of the week only had limited offerings due to widespread rainfall and, in some cases, storms. Warwick more than doubled and numbers at the Roma store sale increased by 26%. In contrast, Roma prime sale on Thursday only yarded 400 head, many of which were held over from the previous sale. It was a similar story in NSW, where the Monday and Tuesday sales at Tamworth, Gunnedah and Wagga had much larger yardings, while at Dubbo on Thursday the yarding halved.

Victorian saleyards mostly had larger throughputs despite the cold, wet and windy conditions experienced. SA numbers increased 53%, with all markets having more cattle penned. WA yardings also increased, with the dry conditions forcing producers to offload cattle at Muchea on Monday.

Rain and restockers sustain prices :  13 August 2010

Cattle and lamb prices sustained the rises recorded last week, with prices for some categories edging higher, despite an increase in numbers offered through saleyards. Another very wet week across the eastern states, with some very heavy falls in south-west Victoria and Tasmania continue to deliver the wet winter that has been so sorely missed in previous years.

A record price of $200/head for a draft of 190 extra heavy lambs at Wagga this week was the highlight of the market, with prices remaining very strong across all categories. Nationally, heavy lambs jumped 10¢, to 532¢/kg cwt - 104¢ above the corresponding week last year. While numbers of new season lambs continue to slowly increase, the combination of very tight supply and strong demand resulted in feeder lamb prices jumping $11/head this week.

The cattle market maintained last weeks price rises, even as numbers increased 9% at MLA's NLRS reported saleyards. Higher yardings in NSW, Victoria and SA offset a fall in Queensland. After hitting a four-year high last week, the EYCI eased back slightly, to 362¢/kg cwt, while heavy steers and cow prices edged 1¢ and 3¢ higher, respectively.

Capitalising on Moscow's wheat woes

For once, drought is helping Australian farmers - Russian drought, that is, according to The Land.

International wheat prices soared last week as bushfires raging over millions of hectares in Russia and the crippling of crops led the government to ban exports of the grain so domestic prices would not skyrocket and stock would not starve.

After the announcement of the Russian export ban on Friday, frenetic dealing on the Chicago Board of Trade saw prices rocket from about $300 to $370 a tonne in 48 hours.

Through the great wheat-growing belts of the eastern seaboard, hope is blossoming as the rains have brought the promise of a good harvest, beginning in Queensland later this month and rippling through the NSW fields in November.

About 85 per cent of the 22 million-tonne crop will be exported, leaving wheat producers feeling the most ''comfortable'' they have been in about five years, said the chief executive of the Grain Growers Association, Peter Flottmann.

Good seasonal conditions a cause for optimism: MLA

The Land reports seasonal improvements in the majority of key beef producing regions so far in 2010 will give many cattle producers the optimism to commence herd rebuilding, while they cautiously await a recovery in export demand.

Launching Meat & Livestock Australia's 2010 Cattle Industry Projections mid-year update on Monday, MLA economist Tim McRae said the slow herd rebuilding should gain some momentum through 2010-11, on the back of increasing confidence in the season - with a 1.5 per cent growth predicted over the year, to 28.4 million head (from 0.3pc growth the preceding year).

"With the majority of the cattle growing regions experiencing their best season in five years, many producers will be looking to re-build their herds," he said.

"The influence of the better season on the market has been evident throughout 2010, with the EYCI currently 5pc higher year-on-year, and 30pc above the low point in early December 2009.

"Recovering economic conditions in Japan and the US, coupled with low global beef stocks, should see an increase in buyer demand into 2011."

Beef plan ‘naive', says MLA

THE recently released beef strategic plan has been labelled "naive" by Meat and Livestock Australia's (MLA's) chairman, Don Heatley, who said the plan would only confuse customers and add to duplication, not reduce it reports The Land.

The plan was prepared by solicitors, Hunt Partners, Sydney, following the Armidale beef forum earlier this year and was presented to the audience at the Rockhampton beef forum.

The strategic plan proposes to reduce producer expenditure, increase returns and reduce duplication by splitting MLA into a sheep and beef corporation, introducing a national beef grading scheme, abolishing the Australian Meat Processor Corporation (AMPC) and Red Meat Advisory Council and removing the Australian Quarantine and Inspection Service (AQIS) charges by putting them back onto government.

Young judges learn the cattle ropes

There were 33 participants at the Victorian Angus Beef Cattle Assessment School last week, which covered areas such as market specifications, steer assessment, selecting females and bulls, using performance records and carcase assessment reports the Stock and Land.

The school was held at the Northern Melbourne Institute of Tafe's (NMIT) Epping campus and participating members came from across Victoria, New South Wales and Tasmania, with the group also including 10 agriculture students from NMIT.

DNA polled test breakthrough

THE influence of DNA-based selection tools for use within the northern beef industry has taken another giant leap forward following the launch of the world's first DNA test to identify polled Bos Indicus-influenced cattle reports the Queensland Country Life.

The test's official launch took place on Thursday during the opening stages of the 2010 Royal Queensland Show, where a record 366-head led steer competition was under way.

The ability to apply selection pressure for polledness within Indicus cattle has major implications, both from a productivity and animal/human welfare perspective.

Duaringa organics open up

FOR Colin and Catherine Dunne, becoming certified organic beef producers was not about a radical change of lifestyle. It was simply about opening themselves to more markets, and producing a premium product says the Queensland Country Life.

Mr Dunne's family has been grazing in the Duaringa area since the late 1800s. After switching to the EU market several years ago they started looking further afield for marketing options, discovering Australian Certified Organic (ACO) in the process.

The Dunnes are based on Sorrell Hills about 20km from Duaringa and run about 3200 breeders on four breeding properties. They also own another three fattening properties on the McKenzie, Dawson and Fitzroy Rivers.

They admitted growing organic beef was not easy, and involved mountains of paperwork, but said being able to sell their beef into a premium market made it worthwhile.

Also being able to achieve the same price for cattle - regardless of whether they are steers or heifers - is an attractive prospect, they say.

Managing seasonal change - Grasslands

MORE than 350 farmers are expected to descend on Wangaratta from August 10-12 for the Grassland Society of Southern Australia's annual conference reports The Weekly Times.

The theme is Global Challenges - Local Choices and will include tours of successful farms and presentations from more than 20 speakers.

Dairy farmer Daryl Hoey is a keynote speaker who has learnt the hard way that managing seasonal change isn't easy.  He will speak about surviving the tough years.

MLA UPDATE

Beef exports jump in July :  06 Aug, 2010

Australian beef and veal exports for July jumped 8% year-on-year, as overall export demand continued to slowly improve, highlighted by increased shipments to Korea, Indonesia and Russia. Assisted by higher production throughout June and July, exports for the past month totalled 89,623 tonnes swt - the highest monthly total since October 2008 (Department of Agriculture, Forestry and Fisheries - DAFF).

Exports to Japan during July declined 2% year-on-year, at 32,334 tonnes swt - the highest monthly total since March (39,283 tonnes swt). Sluggish consumer demand in Japan, along with the high A$, continues to see beef export returns constrained.

While still at a historically low level, exports to the US for July increased 2% year-on-year, to 20,699 tonnes swt - 7% below the five-year July average. The combination of the high A$, tight manufacturing beef supplies and strong competition from other markets, including Russia, continues to keep export volumes to the US low, even with the lure of high imported beef prices.

Shipments to Korea during July were again robust, at 11,948 tonnes swt, taking exports so far in 2010 to over 70,000 tonnes swt - 16% above the corresponding period in 2009.

Both Russia and Indonesia registered a jump in Australian shipments during July, at 4,618 tonnes swt and 5,201 tonnes swt, respectively. For Russia, the reduction in imports from South America, most notably Argentina, has helped to fuel demand for Australian beef.

Demand from South East Asia also continued throughout July, with year-on-year increases to the Philippines, Malaysia, Thailand and Singapore.

For the first seven months of 2010, Australian beef and veal exports totalled 525,719 tonnes swt - 4% below the corresponding period in 2009.

Lower South American supplies pushing up prices : 06 Aug, 2010

The tight cattle supply situation among South American exporters has forced major importers to lift beef prices in recent weeks (World Beef Report).

While Argentina continues to feel the impact of herd liquidation and drought, with a slump in beef production and exports restrictions, Brazil is currently undergoing the winter off season, with market expectations for a slight increase in supply around October.

Although Brazil's exports in July increased, short supply, high domestic demand and the strong currency pulled up average export prices 19% year-on-year, to US$4,011/tonne.

Weekly market update : 06 Aug, 2010

At Roma, numbers increased and the sale was generally firm to slightly dearer. Heavy grown steers gained 4¢ making around 177¢ and bullocks settled at 175¢/kg. Medium weight D4 cows mainly eased 4¢, averaging from 132¢ to 143¢/kg.

Numbers again lifted at Dubbo with an increase in yearlings, grown steers and bullocks. Heavy vealer heifers to feed average 200¢, while the portion to slaughter settled at 198¢/kg. Light yearling steers feeders averaged 212¢, while the heavier pens also to feeders mostly settled at 195¢/kg. Grown steers to slaughter were firm at 182¢/kg. Medium weight D3 cows averaged 149¢/kg.

Numbers were stable at Bairnsdale with some good quality cattle penned. Medium weight B2 vealers averaged 217¢ to 222¢/kg. Heavyweight yearling steers were unchanged at 184¢ while heifers sold around 169¢/kg. Heavy beef cows gained 2¢, to mostly average 155¢/kg.

After Thursday's markets the Eastern Young Cattle Indicator was 5.75¢ higher for the week at 366.25¢/kg cwt. Trade and feeder steers both gained 8¢ to settle at 199¢ and 201¢/kg. Japan ox lifted 6¢ to 184¢ and US cow was 2¢ higher on 141¢/kg.

The yarding increased at Wagga and lamb quality was better. Around 7,000 new season lambs sold to strong demand, as the trade weights gained $9 making from $128 to $144/head. Old trade lambs were $6/head dearer and sold at simular levels to average 564¢/kg cwt. Heavy first cross ewes sold slightly dearer on $128/head or 428¢/kg cwt.

Restocker lamb prices gained 49¢ in comparison to last week, up to 506¢/kg cwt. Merino lambs were 38¢ higher at 460¢, as light lambs lifted 39¢ - to 468¢/kg cwt. Trade lamb prices were 35¢ stronger, settling at 548¢ and heavy lambs averaged 522¢/kg cwt. Mutton finished 17¢ higher at 419¢/kg cwt.

Mixed 2009-10 for live export trade

The 2009-10 fiscal year was a mixed one for Australia's live export trade, with reduced supplies limiting sheep shipments, while export uncertainty to Indonesia in 2010 curtailed an otherwise robust year for live cattle.

While the allocation of import permits and the imposition of a 350kg weight limit constrained shipments to Indonesia during the June quarter of 2010, total live cattle shipments to Australia's largest market increased 2% in 2009-10, to 714,536 head.

Australian live cattle exports in 2009-10 were valued at $698 million, while sheep exports returned A$298 million.

Australian beef sales increase 15% at retail in Korea

Australian beef sales in the three largest Korean discount retailers increased 15% to reach 6,540 tonnes swt from January to June this year, compared with the same time in 2009, according to the Seoul Economic Daily.

From January to June this year, Korea imported 65,002 tonnes swt of Australian beef, 37,591 tonnes swt of US beef, 20,555 tonnes swt of New Zealand beef and 1,521 tonnes swt of Mexican beef (KITA).

Demand drives the need for feed

Strong domestic demand for beef and the availability of cheap feed supplies enabled Australian lot feeders to increase numbers during the three months to June according to a report in Weekly Times.

But the paper also says that the tide may be slowly turning on an industry which it says is still recovering from the battering it received from the market lows of 2007 and the battered economy that followed.

While the number of cattle on feed increased 11 pc to 790,000 head - 62 pc of national capacity - rising US wheat prices and competitive local cattle markets may hamper further recovery.

Although Australian feed-grain prices have been in decline since they peaked in mid 2008, first contract futures prices for wheat in the US have climbed 30 pc in Australian dollars in the past six weeks.

McSpend-up a lift for Angus breed

Fast food giant McDonald's spent $90,000 just on the food when making the TV advertisements for the launch of its Mighty Angus and Grand Angus burgers last year Weekly Times has revealed.

On ABC TV's Gruen Transfer, DDB national creative director and vice chairman Matt Eastwood - who also manages McDonald's Australian advertising account - said the 30-second TV adverts cost about $3000 per second for the food.

Eastwood says while that sounds a lot it "took time and money" to get the adverts right but says the product added a massive amount to the bottom line of the McDonald's business.

McDonald's spent about $10 million on a marketing campaign for the burger launch and was rewarded with double its projected sales of burgers in the first month - they are believed to have hit $2 million a week.

Grassed-up farmers behind beef surge

Weekly Times says there has been a bit of a buzz surrounding the cattle market in the past week - the only issue being that farmers themselves are creating the dearer, and more positive, vibe.

One of the two most talked-about events in the past fortnight was the prices achieved at the Pakenham special store cattle sale, which selling agents rated as one of the dearest seen for "a long, long time".

The other talking point has been the rise in the Eastern Young Cattle Indicator, with Meat and Livestock Australia pouncing on the good news by declaring in its newsletter that the "EYCI surges to 2010 high".

All sounds good except evidence of the spend-up shows it is farmers seeking replacement animals, particularly when the trend from the EYCI shows how strong this influence is in the northern Australian markets.

Spoilt for choice

Beef producers are putting a lot more effort into hitting target markets rather than selling their stock through saleyards at the same time every year according to a report in the Stock Journal.

In the past decade processors have significantly lifted their percentage of over-the-hooks buying but agents still believe the State's main saleyards are the barometers of supply and demand for the industry.

South-East yards, in particular, are enjoying strong store sale numbers, and despite a drop-off in actual breeder numbers, the paper says they are now within five pc of their annual yarding from the previous year.

Mt Gambier yarded 122,000 head for the 2009-10 financial year, including a rise in store cattle to about 25,000 head while Naracoorte's tally is 99,560, close to its long-term average of 100,000 head.

Feedlot prefers paddock buying

Elders Charlton feedlot manager Steve Rennie bought more than 100m head of Angus steers and heifers, including the $880 sale toppers, at Mt Gambier's recent monthly store cattle sale says Stock Journal.

But he has told the paper that its saleyard purchases make up just five pc of the overall buying program for the 20,000 head feedlot, which is located in the Victorian Mallee.

Rennie says that for the past five years 95 pc of the Elders-owned feedlot's purchases have been out of the paddock, and of those, 98 pc have come from Elders clients across Victoria and the South-East of SA.

For the past 12 months Charlton has been running at, or close to, full capacity and looks for 320-370 kilogram cattle for its 60-day domestic feeding program as well as 370-500 kilogram animals for a longer-fed export market.

NT buy extends Hughes cattle

Large scale Queensland beef producer Peter Hughes has struck his first property deal since selling $169 million worth of cattle stations to Macquarie Pastoral Fund last year says Queensland Country Life.

Hughes, who stood down as a director of the embattled Australian Agricultural Company (AACo) in April, has now purchased the well-known Argadargada Station in the NT for $5 million.

The property covers 513,000 hectares and runs along the western border of Hughes' Lake Nash Station, southwest of Camooweal, creating an aggregation of 13,600 square kilometres.

Argadargada, which was originally passed in at auction for $4.75 million, came with 7750 head of cattle, which will add to Hughes Pastoral's herd of 200,000 head, which includes being one of the country's largest Wagyu operations.

Keane new RMAC chairman

Former Swift Australia senior executive Ross Keane has been appointed independent chairman of the Red Meat Council of Australia, following the retirement of Ian McIvor, says Rural Press.

The report says that RMAC is the meat and livestock industry's peak national body responsible for matters associated with cross-sectoral policy development and implementation.

Keane's appointment as the body's first independent chairman represents a departure from the previous system, where the chairmanship was rotated among the heads of the five industry peak councils represented: lotfeeders, cattle and sheep breeders, live exporters and processors/retailers.

Keane is well known across the beef industry and his resume within Australia Meat Holdings, and later Swift, over 20 years encompassed livestock procurement, lotfeeding and processing.

Focus on feedback

Responding to the demand for more industry relevant competitions and trials, The Land says the NSW Beef Spectacular staged its inaugural feedback trial this year - and there is more to come.

Even organiser Brett Tindal says comments throughout the industry since the first trial finished have indicated that something such as this has been needed for some time - and the plan is to make 2011 bigger as well as better.

The feedback trial is designed to provide participants with valuable information on how they can better their existing production and produce a quality animal suitable for feedlots and processors.

With just a few weeks notice the first trial drew 43 teams of opens of five steers - and a further 85 head missed out due to lack of space. Support is already coming from the length and breadth of the eastern states, with agents encouraging both stud and commercial producers to get involved.

Angus - from breed to in-demand brand

A brand will give a commodity, product or service its own identity - and according to a report in The Land, it also gives the consuming market an assurance of a particular level of quality.

This is what Angus has done says Charles Sturt University's Albury-based marketing lecturer Ian Coghlan, with an ability to make this work coming down to the people in the cattle industry, just like any other industry.

Coghlan says the Angus industry has been good at looking into the future and planning for it by creating a market for itself by "getting into planning, and that is the important thing".

He says there are four main points which make the Angus brand strong - it is recognised as a good product, is relatively consistent in quality, it has the numbers to maintain a consistent supply and it actively promoted objective measurement.

Angus ahead on health

An analysis of feedlot cattle in the United States shows health problems were less prevalent in cattle with a higher percentage of Angus breeding according to a national Rural Press report.

Records from 30,000 head of cattle in the in the Tri-County Steer Carcase Futurity in Iowa placed on feed between 2002 and 2009 were sorted into four groups based on sire and dam information, low percentage Angus, half, three-quarters and pure.

Certified Angus Beef (CAB) vice president Larry Corah says that it soon became clear that health problems in the trial cattle were the lowest in the groups with the highest Angus influence.

"That is exciting because health can make or break profitability," Corah says. Morbidity, or sickness, was 16 pc for pure Angus but increased to 21.7 pc for those with the lowest amount of Angus genetics.

Use the code for genetic success

A national Rural Press report says the use of genetic tools, coupled with incisive management, is, according to Angus Australia chief executive Peter Parnell, the right combination for the genetic improvement of any herd.

Parnell has told Rural Press that the two primary factors, which combine to deliver genetic improvement, are having a clear breeding objective and working with good sire selection.

"There is a need to determine your vision of the future," Parnell told a recent Angus field day at Rylstone in NSW. "You need to have a vision of what your production environment and market opportunities will be five to 10 years down the track."

He says decisions we make now, in 2010, can still be affecting our production performance 10 years down the track, highlighting the long-term influence of sire selection, which he believes plays a critical role in dictating future herd performance.

MLA UPDATE

Retail beef prices steady, lamb jumps 5% :  30 July 2010

The June quarter Consumer Price Index (CPI) released by the Australian Bureau of Statistics revealed a 3.1% increase in prices for the 2009-10 fiscal year.

Although overall food prices for the year increased 1.4%, beef prices remained stable compared with the previous year, while tight lamb supplies coupled with strong international and domestic demand continued to push lamb retail prices higher (Australian Bureau Statistics).

Beef prices during 2009-10 were almost unchanged compared with 2008-09, averaging $16.08/kg, an increase of 0.2% on 2008-09. While prices increased during the second half of 2009, they have eased back in 2010, as additional beef entered the market, assisted by sluggish export demand and high A$.

Lamb prices increased in the year ending June 2010, averaging 5% above the previous year, at $14.08/kg. Tighter lamb supplies, strong international demand and an active restocker market combined to lift saleyard lamb prices to new heights during 2009-10.

For the past fiscal year, pork prices increased 2% year-on-year, to $13.49/kg, while chicken prices were unchanged at $4.06/kg.

Tight supplies, higher prices in the US :  30 July 2010

It was another relatively steady trading week in the US - imported lean manufacturing beef values were firm, if not slightly higher amid tight imported beef supplies and strong prices for domestic lean manufacturing product. Seasonally, lean manufacturing beef prices tend to drop away in July and August, but since July values have increased.

On the US domestic market, lean manufacturing beef prices remained relatively steady on last week, at 166US¢/lb, up 20% on year ago levels. US cow slaughter is currently running above year ago levels, but tight supplies of imported beef are helping to support a stronger market. Inventories of frozen boneless beef in US cold storage facilities in June were 16% below June 2009 volumes.

Beef volumes to Korea remain strong :  30 July 2010

Australian beef exports to Korea from 1-22 July this year were a high 9,125 tonnes swt (24% chilled), with July likely to surpass the 10,530 tonnes swt shipped in the same month last year.

Korean buyers reported that average prices for imported beef cuts in the Korean wholesale market dropped again this week. Spot wholesale prices for the majority of US, Australian and New Zealand cuts have eased since early June - reflecting a temporary build up in stocks following lower than anticipated sales over the hot, wet summer and World Cup period and recent high imports.

Market conditions in Korea have been favourable this year, as GDP growth rose 2.1% in the first quarter and 1.5% in the second quarter. In addition, Korean consumer sentiment in July recorded a five month high - with the index reaching 112 points (+100 = positive). This response was based on a survey among 2,111 households in 56 cities between 14-21 July this year (Bloomberg).

Wet run continues :  30 July 2010

The run of wet weather continued this week across NSW and Queensland, pushing most regions above the July average. Good falls were recorded throughout northern NSW and parts of southern Queensland, with potential for further falls into the weekend. Falls were patchy through the southern states, and coastal WA. Heading into the final month of winter, WA producers need more widespread rain to boost crops.

Tough time for Japan yakiniku businesses :  30 July 2010

Yakiniku outlets (Japanese/Korean barbecue) in Japan had another tough month, with June sales declining 7.6% year-on-year, according to the Japan Foodservice Association.

Despite the overall subdued trend, demand for lower value yakiniku items such as Australian thick and thin skirts has been firm over recent months. Japanese wholesale prices for these items averaged 500 yen/kg and 510 yen/kg this week (up 19% and 26% up year-on-year, respectively).

In the Australian beef export market, Japanese buyers continued to show interest in frozen items this week, but inquiry for chilled beef was somewhat limited. The appreciation of the A$ this week added further pressure on negotiations, resulting in eased returns for Australian exporters in A$ terms.

Cattle market wrap :  30 July 2010

Young cattle demand bolstered by restockers

The excellent season being experienced across much of the eastern states continues to result in strong restocker demand, with rain during the past week assisting the market to edge higher.

Heavy rainfall at the start of the year, followed by a reasonable autumn and winter has placed many producers across eastern Australia in a position to experience a favourable spring - a welcome change after several very tough years. Throughout the previous drought years, producers were forced to destock, unable to finish cattle during spring following very poor winters. However, with seasonal prospects now significantly improved, demand for suitable young stock to capitalise on ample feed has been the main driving force behind the higher prices at almost all cattle markets.

NSW and Queensland markets have been subjected to the strongest restocker activity. At the Roma store sale on Tuesday a producer from the Chinchilla district purchased a line of 200 lightweight yearling heifers for 187¢/kg lwt. Over 1,000 head of lightweight C2 yearling steers returning to the paddock at the Roma store sale averaged 208¢, and reached a top of 236.2¢/kg lwt. At Scone on the same day, medium weight vealer steers purchased by restockers sold to 225.6¢, to average 218¢/kg lwt. At Casino, producers paid up to 237¢ for lightweight vealer steers, with averages between 211¢ and 217¢/kg lwt.

Nationally, medium weight vealer steers returning to the paddock averaged 4¢ more than last week, at 200¢/kg lwt. Lightweight yearling steers and heifers in Queensland gained 11¢ and 7¢, to average 185¢ and 171¢/kg lwt, respectively.

EYCI breaks 360¢/kg cwt

On the back of strong restocker demand for young cattle, spurred again by good rain, the Eastern Young Cattle Indicator (EYCI) reached 360¢/kg cwt this week - its highest level since October 2008. At the finish of Thursday's sales the EYCI settled at 360.50¢ - up 1.75¢ on last week, 11¢ higher than last month and 16.25¢/kg cwt above the same time last year. Yearlings dominated the yarding of EYCI classified cattle, making up over 80%, with Dalby yarding 13% of the cattle used in the calculation.

Cow prices firm

Cow offerings at MLA's NLRS reported saleyards remained relatively unchanged this week, as the decline in medium weights offered in Queensland was largely offset by an increased supply of heavyweights in SA.
Despite the A$ returning to above US90¢ during the week, the effect on prices at physical markets was mixed. Nationally, medium weight D2 cows to slaughter gained 2¢, to average 128¢/kg lwt. Heavyweight D4 cows improved 3¢ to mostly sell around 148¢/kg lwt. The highest average prices were in Victoria, where heavyweight D4's averaged 154¢/kg lwt.

Average restocker prices for cows were not as strong as last week, with medium weight D2 cows returning to the paddock 1¢ lower, at 130¢, with lighter pens averaging 120¢/kg lwt.
After the close of Thursday's markets, the eastern states US cow indicator was 2¢ cheaper on the previous week, at 139¢/kg lwt.

German cattle herd continues to decline :  29 July 2010

The German cattle herd has continued its' long term decline (despite a partial recovery in 2007 and 2008), with total numbers down 1% to 12.8 million, according to provisional results from the German cattle census performed in May (EU Market Survey).

Young steers registered the largest reduction (down 3%) to 1.075 million head, influenced by a 6% increase in slaughter of this category to 136,000 head. In contrast, the dairy cow herd declined by a marginal 0.5% to 4.2 million head, as higher milk prices improved producers prospects of the industry.

Russian producers hit by drought :  29 July 2010

Russian cattle producers are struggling to avoid a decline in numbers as a severe drought (with 16 regions along the country already declared drought emergency zones) diminishes feed supplies.

The local government has ordered proposals to be drawn up for subsidised sales of stockpiled grain to livestock farmers. In addition, the Russian Agriculture Minister has announced drought stricken regions will be given loans at preferential rates to assist producers through the crisis. According to the Minister, more than 40 billion roubles (A$1.5 billion) have already been requested for financial assistance.

Russia has attempted to rebuild the national cattle herd in recent years to become self sufficient. But despite the drought, the sector has failed to reach government targets, relying heavily on beef imports to supply the domestic market and buying breeding animals abroad, along with attempting to modernise breeding centres.

Russian beef imports during the fiscal year to April fell 11% to 537,761 tonnes swt compared with the same period in 2008-09, as importers continue to trade cautiously after 2008's financial crisis and lower supplies from Argentina and Brazil have challenged trade.

Brazilian cattle prices rise :  29 July 2010

Brazilian grown cattle prices have reached the highest level for the last 18 months, mainly as a result of the current low supplies and the improvement in both domestic and export demand (Scot Consultoria).
Brazil is currently undergoing a period of low seasonal cattle turnoff. During June to October (the off season), grass fed cattle supplies are scarce due to the low winter pasture availability, while feedlots supply animals mainly during October to December.

In addition, the rise in prices has been influenced by stronger export demand, with shipments in June the highest since September 2008, at 96,403 tonnes swt. The jump in exports was supported by demand from Russia, the Middle East and South East Asia.

Grown steer prices are expected to maintain their higher levels in the second half of 2010, despite a possible increase in supplies during spring once feedlot output reaches the market. Low inventories in major Brazilian cattle raising areas such as Mato Grosso state, high restocker cattle prices and sustained demand are likely to underpin the higher prices.

US urges beef talks to resume as Japan contains FMD :  29 July 2010

The Miyazaki prefecture of Japan removed the movement restrictions applied to foot-and-mouth disease affected areas on 27 July, three months after the first outbreak that resulted in the culling of over 280,000 livestock. In the meantime, US government officials have reminded their Japanese counterpart about resuming beef trade discussions that the two countries had agreed prior to the disease outbreak.

The US Ambassador to Japan, together with Japan's Agricultural Minister last week, both agreed to hold working-level talks as soon as the Miyazaki prefecture contained FMD. Following the meeting, Japan's Agricultural Minister announced that the government will ensure food safety for Japanese consumers based on its scientific assessment. The US-Japan dialogue is expected to start around September, according to various media reports.

Japan restricts imports of US beef to products that are sourced from cattle less than 21 months of age, with Specific Risk Materials (SRM's) removed. The US government had previously been adamant in the removal of all restrictions, but its' position was softened during the last bi-lateral meeting in early April, indicating that the US would accept a gradual approach concerning age protocols.

Imports of US beef into Japan have been growing despite the current restrictions, with January to May volumes up 43% year-on-year, to 27,300 tonnes swt, but still only 26% of their pre BSE 2003.

Little prospect for US cattle herd expansion :  29 July 2010

The US cattle herd continues to decline, with the United States Department of Agriculture (USDA) reporting a 1.2 million head fall for the year to 1 July 2010, at 100.8 million head. This is the smallest July US cattle inventory since records commenced in 1973.

Given the increased beef cow slaughter over the past 12 months, the 2% decline in the US beef cow herd was largely anticipated, with numbers now standing at 31.7 million head. The continuation of the high beef cow slaughter in 2010 has somewhat puzzled US industry participants and analysts, as pasture conditions have improved across major cow-calf regions in the US and prices for cattle are well above year ago levels. One possible explanation for the higher slaughter level is that part-time or smaller cattle operations in the US are capitalizing on the higher livestock prices, turning off stock in order to generate cash amid the tough economic climate.

Any potential for the US herd decline to be reversed continues to be put on hold, as the number of heifers for beef cow replacement declined 2% year-on-year, to 4.4 million head - the fourth consecutive annual decline. Fewer replacement numbers will continue to pressure calf crops, which will lead to lower beef production over the next couple of years - a very bullish factor for US beef prices in 2011 and 2012.

Contrary to the beef herd, the US dairy herd looks likely to stabilize over the coming year, with heifers for dairy cow replacement jumping 3%, to 4.05 million head. Dairy cow herd numbers declined 1% for the past year, to 9.1 million head, as liquidation continued toward the end of 2009. Dairy cow slaughter though has eased so far this year (January to June), with volumes down 5% on the same time last year, to 1.4 million head.

Given the anticipated tighter cattle and beef supplies for the US in the coming years, demand for imported product is expected to increase, with beef prices also forecast to rise. However, price movements for the remainder of 2010 and early 2011 will continue to be heavily dependent on the state of the US economic recovery and competitor meats.

Feedlot numbers increase during June quarter :  29 July 2010

The number of cattle on feed in Australian feedlots during the June quarter increased 6% year-on-year, to 790,722 head - the highest quarterly result in three years. Underpinned by a surge in Queensland, numbers on feed were also 11% ahead of the March quarter, according to the latest Australian Lot Feeders Association (ALFA)/Meat & Livestock Australia (MLA) quarterly feedlot survey.

Conditions remained tough for the grain feeding sector throughout the June quarter, with a higher A$, sluggish Japanese demand and higher feeder cattle prices. However, relatively cheap grain helped to partly offset the higher cattle prices - particularly in southern regions.

Widespread rain across the eastern states spurred young and feeder cattle prices higher throughout the June quarter. Yearling steers (C2 0-330kg) averaged 188¢/kg cwt over the quarter, up 10% on a year earlier, and 3% ahead of the five year average. Tighter supplies of suitable cattle and flourishing restocker buying contributed to the higher prices.

Numbers rose 10% year-on-year in Queensland to 455,307 head, 30% in Victoria (57,555 head) and 46% in SA (26,274 head) with southern numbers driven by low-priced, abundant grain supplies. Numbers remained flat in NSW at 223,197 head, and fell 35% in WA (28,439 head).

Brazilian hide prices recover :  29 July 2010

Tight Brazilian steer supplies and low slaughter rate, in addition to recovering international demand has influenced a recovery in local green hide prices.

Although prices (based on a 45kg green hide) currently account for around 4.6% of the total value of a 248kg cwt steer, they have increased from the 1.5% in March 2009, when the tough global economic situation reduced demand. However, the percentage share is still well below March 2007 levels, when green hide prices accounted for around 11.3% of the carcase's total return (Scot Consultoria).

US fed beef supplies to lift :  29 July 2010

US fed beef supplies are expected to lift toward the end of 2010, with cattle placements into US feedlots rising 17% year-on-year in July - the fourth consecutive monthly increase (United States Department of Agriculture (USDA)). However, the increased cattle placement in 2010 are in comparison to the very low 2009 results, when numbers on feed contracted due to economic conditions suppressing beef demand and high feed costs.

The USDA is still forecasting US beef production to remain below year ago volumes in the third and fourth quarters of 2010, at 3 million tonnes cwt and 2.83 million tonnes cwt, respectively.

As US analysts expected, cattle placements (at 1.63 million head) for July declined on June, and were the lowest placement figure so far this year. Cattle placements tend to slow around this time of year, as summer grazing cattle are unlikely to be available until autumn.

Cattle on feed numbers as at 1 July 2010 also increased 4% on last year to 10.07 million head, while cattle marketings remained steady on year ago levels, at 1.997 million head.

US beef production during June lifted on both year ago and the previous month, up 1% and 11% respectively, to 1.05 million tonnes cwt. Increases in both steer and beef cow slaughter contributed to the rise in total production.

Winter spike passes

The annual winter spike in prices for cattle seems to have passed early according to a report in the Weekly Times, with just a slim possibility that rates could again increase in late August or early September.

While prices normally reach their peak in late winter, as the southern cattle turnoff declines, a rising, or at best volatile, Australian dollar is likely to suppress any such impact MLA says.

Already the appreciating Australian dollar is placing pressure on steers bound for Japan, with the national Japan ox indicator last week slipping nine cents a kilogram to 319 cents carcase weight.

Although this was compounded by ongoing poor Japanese demand, the paper says trade cattle values in Queensland and NSW rose, while cow prices lifted in NSW and WA and the Eastern Young Cattle Indicator was 11.5 cents ahead of the same time last year.

Egypt market gets lively

Egypt is re-emerging as a major export destination for live cattle following Indonesia's decisions to close its ports to Australian cattle heavier than 350 kilograms says the Weekly Times.

The paper says that Australia's largest livestock exporter and ship owner, WA-based Wellard Rural Exports, has announced that it will send four shipments of beef cattle to Egypt this year.

Two of those shipments, with a combined total of 33,500 head, have already been delivered - with one of them sailing from Fremantle in WA and the other from Townsville in Queensland.

They were the first shipments there in five years following the introduction there of an improved animal welfare code, and Wellard managing director Steve Meerwald says the revival of the Egyptian market is significant given the Indonesian situation.

Top End prices ‘polarised'

The 350-kilogram liveweight limit imposed six weeks ago by Indonesia on Australian live cattle exports has had a dramatic effect on cattle prices across supply areas in northern Australia says Queensland Country Life.

Steers below the 350-kilogram weight threshold have risen to 190 cents a kilogram liveweight ex Darwin, up from 160 cents before the ban, and live export analysts say could soon push through the 200 cents barrier.

But in contrast, values for heavier cattle now outside Indonesia's live export requirements have fallen substantially, and that's before the application of road freight, which can add as much as $200 to costs for northwest WA cattlemen.

MLA live export manager Michael Finucan agrees the beef cattle market has been polarised and says live export buyers are now sourcing their cattle from within a smaller available pool so there is going to be some upward pressure on prices.

Katherine Meatworks hopes dashed

Prospects for the reopening of the Katherine Meatworks as a local processing option for northern Australian cattle falling outside weight requirements for Indonesia have been dashed says Queensland Country Life.

The paper reports that the backers for the project have confirmed in the past week that their plan has been abandoned, primarily they say because of the lack of government, and other, support.

A group headed by processing industry veteran John Hughes, and an Australian partner (not Chinese, as earlier rumoured) had worked on a plan over the past two years to get the plant back on its feet, with considerable support from Teys Brothers, its current owners.

While the original proposal was built around the processing of feral animals such as camels, buffalo and donkeys, more recently the changing Indonesian market has seen attention switch to a beef kill for cattle above 350 kilograms.

Saleyards muster national voice

Years of negotiations came to a head last week says Queensland Country Life when saleyard operators voted to form a new peak representative body at the annual Saleyard Operators of Australia (SOA) conference in Wagga Wagga.

Yard representatives from Queensland, NSW and SA voted together to form the Australian Livestock Markets Association (ALMA) and replace the SOA with a yard-based organisation.

The paper says that inaugural ALMA president Steve Loane, from Naracoorte in SA, says it has become very clear that they needed to become a national peak body so they could be heard in government.

Loane says the issue has been simmering for a couple of years, but in 2008 when Federal Agriculture minister Tony Burke said he wanted guidance, but only from a peak industry body, the issue regained momentum.

Texas Longhorns expand

It might still be an under-appreciated breed in Australia says Queensland Country Life, but a handful of commercial producers across Queensland and NSW are dedicated to lifting the profile of Texas Longhorn cattle.

According to the paper, converts to the breed say that they believe it offers many individual benefits and they are bracing themselves to enter the competitive breed promotion marketplace.

Formed in 2008, Texas longhorns Australia (TLA) is an organised outlet to promote and educate people on the Longhorn breed and to unit Longhorn breeders and enthusiasts.

About 50 Longhorn producers met during the inaugural Texas Longhorn sale, which was held in Gunnedah last month, and decided to become an incorporated organisation with its committee meeting at Deepwater next month.

Not-so-humble pie

Angus beef's fight for an ever-increasing market share has spilled out of the burger range and into flaky pastries with the launch of a new Angus pie from the Brumby's bakery chain says Queensland Country Life.

The paper says that with scant change from a $5 note, the premium-priced pie seems to be pitted against its more fancied, and famous, rival recently launched by the iconic Four'n'Twenty company.

This meat pie scrap now looks set to resemble the burger war (is this called a bunfight?) between McDonald's and Hungry Jacks, both slugging it out with their respective Angus burger items.

Of course, the paper rightly points out that the biggest winners are those behind the Angus brand, along with its rapidly-expanding capacity to extract more of the consumer's grocery dollar.

Tamworth's big new ‘less stress' saleyard

People will be buying and selling livestock out of an all-new complex in Tamworth - and according to a report in The Land it could all be taking place as soon as October next year.

Tamworth Regional Council approved the amended development application by Regional Infrastructure earlier this month, smoothing the way for construction to start as soon as October this year.

The new complex will be on an adjacent greenfields site, literally around the corner from the existing Goddards Lane facility and the approval brings to an end six years of industry speculation for those who use the yards and uncertainty for those who are working in them.

The paper reports that the new Regional Livestock Marketing Centre has been designed to handle 130,000 cattle and 355,000 sheep and lambs annually, or about 1950 prime cattle, 650 stores and 7100 sheep a week.

MSA booming as Swift processors jump aboard

A big contributor to the recent Meat Standards Australia (MSA) boom - up 28 pc to more than 1.25 million last year - has been Swift Australia, which The Land says has now completed MSA licensing in all seven of its Australian beef plants.

The paper says that Beef City near Toowoomba started grading 100-day cattle in the past two months, while Brooklyn in Victoria and Rockhampton are close to starting their first MSA kills.

Brooklyn is also about to launch its own grassfed halal-certified brand called Royal Blue, adding to Swift's existing four MSA-back brands, and other Swift plants are extending their MSA ranges.

Dinmore, for example, has this year grown from 70-day grainfed MSA only to both grass and grain finished cattle. Evidence from through-chain premiums for MSA meat and livestock are further lifting interest from producers nationally.

Key to cycle success

In modern beef production, getting females to cycle is critical to getting more calves on the ground, and, ultimately, more dollars in the bank according to a report in The Land.

Keeping females in good condition, particularly at calving and weaning, and sticking to a regimented start to mating, are among the keys in ensuring the cycling success in a herd says DEEDI principal scientist Geoff Fordyce.

And they were among the messages he and other researchers delivered at a breeder reproductive performance and management field day organised by the Central Beef Alliance at Springsure.

Fordyce told participants at the field among the tools they can use is their breeder reproductive management is the five-point scoring system starting at one being very poor through to five being very fat.
 

Argentine farmers pay for populism

Farmers in Argentina - a country known for its wide open spaces and productive farming and livestock industries - are struggling with the effects of exorbitant export taxes says The Land.

The Argentine undersecretary for Agriculture, Fishing, Livestock and Food between 1999 and 2001, Jorge Cazenave, says the taxes started in 2002 and have been going up ever since.

Using soybean as an example, Cazenave told the paper that export taxes were 27 pc in the 2007 planting season. They jumped to 37 pc in the following year and by the middle of that year had hit 45 pc.

He says beef is also being hit, and as a result much of its market share in areas such as Russia, the EU, Arab countries, Africa and Asia are being lost to Brazil and the country's cattle herd has been slowly dwindling since 2002 with slaughterings in 2010 expected to be down 30 pc.

MLA UPDATE

Price premium for MSA beef in 2009-10  :  23 July 2010

The average price premiums for butchers and wholesalers selling MSA beef during 2009-10 were steady compared with the previous year, according to data collected by Millward Brown's National Field Services.

The firm price premium, an increasing proportion of butchers (37%) and wholesalers (88%) selling MSA graded beef and a 27% jump in the number of MSA graded cattle (to 1.25 million head) indicates strong demand for MSA beef during 2009-10. The growing momentum of the MSA grading program continued in 2009-10, with the majority of beef processors applying MSA as the minimum standard to underpin the eating quality of some or all of their brands.

Over the 12 months to June, the wholesale price for MSA-graded grainfed yearling cuts was 14% higher than the non-MSA equivalents and MSA yearling grassfed prices were 16% higher than the non-MSA cuts.

At retail, the price charged for MSA graded steaks was, on average, 7.5% higher than non-MSA steaks in 2009-10 - compared with an 8% premium in 2008-09.

Cattle market wrap :  23 July 2010

Yearling steer numbers surge

With rain reduced yardings across many regions last week, throughput at MLA's NLRS reported physical markets increased 13% this week. Despite the higher offerings, supplies remain 7% below the corresponding week last year.

While offerings surged across most categories this week, the largest increase was registered for yearling steers. Around 32% more yearling steers were offered on last week, with the majority of the increase coming from Queensland markets. Numbers were also higher in NSW and SA. Supplies of yearling steers were up in WA, although it was a very mixed quality offering at Muchea, where the limited number of certified grain fed lots offered were in strong demand from processors, reaching 219¢/kg lwt.

While the quality of yearling steers offered remains mixed, as is often the case in the middle of winter, there has also been a noticeable improvement in quality at some saleyards, with crop finished and supplementary fed lots entering the market. The supply of lightweight C2 yearling steers increased 56%, with restockers accounting for most purchases at prices around 193¢/kg lwt. There was a 36% increase in the number of heavyweight C3's offered, which sold to strong competition from feeders and processors, gaining 4¢ on last week to average 184¢/kg lwt overall.

Grown cattle dearer

Export categories registered stronger prices this week across all eastern states indicators.

The Japan ox indicator lifted 6¢ to settle at 183.7¢/kg lwt after Thursday's markets. The higher level was driven by the two Toowoomba markets where the indicator grades averaged from 187¢ to 190¢, while Japan Ox prices in Mount Gambier averaged 195¢/kg.

The US cow indicator finished 6¢ higher this week, at 141¢/kg lwt. Victorian and SA markets averaged from mid-140¢, to 155¢/kg lwt at Pakenham for D3 medium weight cows. At Dubbo, indicator grades averaged 148¢/kg lwt.

EYCI surges to 2010 high

At the completion of Thursday markets, the Eastern Young Cattle Indicator (EYCI) settled at 358.75¢, up 8.50¢ from the previous week and 15.75¢/kg cwt above the same time last year.

This week's increase eclipsed the previous 2010 high set in mid-March, when cattle supplies were severely restricted by flood conditions across Queensland and parts of NSW and is the highest daily level since early October 2008.

The rise in the EYCI was despite a 10% increase in the number of cattle included. Dubbo was the largest contributor, where feeder and restocker buyers were noticeably stronger.

Restockers pushed medium weight vealer steer prices up to 18¢ higher, with a top of 222¢ and an average of 214¢/kg lwt. Feeders paid up to 207¢ for lightweight yearling steers, with the average at 199¢, while restockers paid around 205¢/kg lwt for similar lines.

Heatwave signals arrival of barbecue season in Japan :  23 July 2010

A series of heatwaves hit Japan this week, straight after the end of the rainy season. The Japanese trade now anticipates a lift in barbeque demand in the market - outdoor beer gardens with barbecue facilities typically operate at full swing until the end of summer (early to mid September).

In the Japanese wholesale market, chilled Australian beef prices were mostly unchanged from last week, with the exception of tenderloin (down 5% to 2,050 yen/kg, but still 21% higher year-on-year), and cube roll (down 4% to 1,300 yen/kg, and 2% below last year), both grassfed. US chuck rib was in good demand, lifting 50 yen/kg up from last week to 1,225 yen/kg this week (choice grade).

Japanese buyers were not in a big hurry to secure chilled Australian products, despite the lower A$ this week. Interest in frozen items was more immediate, with trimmings and briskets attracting good bids from Japan.

First signs of lift in cattle demand :  23 July 2010

Cattle prices lifted across both saleyard and direct to works selling this week, providing the first signs of a possible lift in end user demand.
With yardings up 13% on last week (but still down on last year), it was a strengthening in the competition between restockers, feeders and processors that led to the rise across almost all categories and states. This competition was most clearly reflected in the EYCI, which finally broke away from the 350¢/kg cwt level it had maintained since early March, up almost 9¢ to 358.75¢.

The US import market is showing positive signs, feedlots are still placing cattle in pens for end-of-year Japan and Korean demand, and the recent rains have reinforced expectations of a good spring (further encouraging restockers).

The normal August/September peak in cattle prices is, however, likely to be constrained by the high and volatile A$ and continued economic concerns in Japan and the US markets.

Despite a small fall in lamb yardings, prices slipped slightly across national indicators this week, with the notable exception of Merino lambs in NSW and WA, which lifted on the back of last week's useful rains in the wheat/sheep regions.

NSW buyers managed to pull mutton sheep prices back 28¢ from last week's record, causing the national indicator to also fall from its record.

Australian foodservice on healthy growth :  21 July 2010

The latest MLA Australian foodservice tracking survey and ABS statistics revealed that Australian foodservice market value reached A$38.9 billion in 2009, growth of 8.1%, after the minimal 0.5% growth in 2008. Taking into account an average 3.5% increase in foodservice prices,

Australian foodservice sector's increased 4.6% in real terms in 2009 - above the annual 3% average real historical growth since 2001.

While the highest growth in 2009 was in takeaway foodservice outlets (+15.8%), there has been a significant turnaround amongst cafes & restaurants (-3.8% to +5.8% in 2009).

Factors contributing to the growth include the return to buoyancy in household incomes and assets, historically low interest rates, healthy employment levels, government stimulus spending and the stabilisation of financial markets.

ABS turnover data indicates foodservice growth during January to April 2010 has slowed from December 2009, although it remained above the same period last year. According to the MLA Australian foodservice tracking survey conducted in May, poultry continued to be the most served meat in foodservice outlets (83.5kg/outlet per week), followed by beef (73.7kg/outlet per week), lamb (31.5kg/outlet) and pork (27.8kg/outlet).

The Australian foodservice survey during May 2010 involved 431 telephone interviews across hotels/motels, restaurants, pubs/clubs, fast food chains and independent fast food outlets in Sydney, Melbourne and Brisbane/Gold Coast.

Around 55% of foodservice operators in this survey described themselves as 'doing OK', followed with 27% 'thriving' and 16% reportedly 'slow or struggling'. The overall results showed only minor changes compared with the November 2009 survey, but were better than May last year, when the economy was in the depth of the global financial crisis.

Korean enquiries yet to recover :  23 July 2010

Australian beef exports to Korea from 1 - 19 July totalled 7,585 tonnes swt with chilled beef making up 24% (DAFF). Beef trade with Korea has been firm this month, but Australian exporters have reported slowing enquiries in recent weeks.

Slow Korean consumer beef demand and strong supply has triggered wholesale prices for some imported beef cuts to fall.

Since the start of the FIFA World Cup last month, several Korean news sources continue to report on soaring chicken demand. The Korean Chicken Council expects consumption to hit 618 million chickens this calendar year compared with 564 million last year (Joong Ang Daily). A popular chicken dish is 'samgyetang' - a traditional Korean soup that is enjoyed during summer. Korean discount retailers E-Mart, Lotte Mat and Homeplus have also reported increased chicken sales year-on-year (Joong Ang Daily).

June marked the fifth consecutive month that total sales at discount retailers increased on last year. Groceries - making up 51.1% of all purchases - jumped 5% in the year to June (Yonhap). The Bank of Korea has also increased its gross domestic product (GDP) growth forecast from 5.2% to 5.9% - partially due to increased consumer spending (AP).

Australia continues to dominate Korean beef market :  23 July 2010

Korean imports of Australian beef over the January to June period increased 8% year-on-year, to 65,002 tonnes swt. Chilled and frozen beef imported from Australia increased 23% and 4%, respectively, this year. Australian beef continues to be dominant in the imported Korean beef market - supplying 78% and 47% of all imported chilled and frozen beef cuts, respectively.

Over the period, total Korean beef imports lifted 21% to 124,668 tonnes swt compared with last year. So far, beef imports have surpassed last year's monthly totals - assisted by subdued domestic cattle slaughter.

Beef imported from the US in the year to date increased 57% on last year to 37,591 tonnes swt. Beef from the US into Korea consists of 90% frozen (mainly barbecue) products. New Zealand volumes increased 17% from January to June, to 20,555 tonnes swt - with frozen beef accounting for 97.5% of total shipments.

Japanese cattle farm numbers in decline :  21 July 2010

The Japanese beef cattle herd decline slightly in 2010, while average beef cattle numbers per farm increased due to a reduction in the number of farming households.

According to data released by Japan's Ministry of Agriculture, Forestry and Fisheries, there were 2.89 million head of beef cattle as of 1 February 2010, down 1% from last year. Kyushu (southern island of Japan) remained the largest region for beef cattle in Japan at 1.06 million head (mostly Japanese black Wagyu), followed by Hokkaido (northern island of Japan) at 0.54 million head (combination of Wagyu, F1 and dairy beef cattle).

Farm numbers continued to decline, largely due to the aging farming population and the industry consolidation. As a result, 74,400 farms (down 4% year-on-year) had an average 39 animals/farm in 2010 (one animal more than the previous year). In reality, over 52% of the total herd was fed by larger beef cattle operations, with more than 200 animals - only 3% of total farms.

The figures were taken prior to the foot-and-mouth outbreak in Japan (April 2010).

US beef market steady but economy on uneven ground :  23 July 2010

The lean manufacturing beef market in the US this week remained relatively steady across imported and US domestic product, amid a cautious buying environment due to much market uncertainty. Both the importer 90CL indicator and the US domestic fresh 90CL indicator remained relatively unchanged on last week, at 155.5US¢/lb (CIF) and 166.5US¢/lb, respectively.

While there were expectations for the US economy to start its slow recovery, recent US unemployment figures suppressed all positive expectations for a strong recovery, with the US unemployment rate in June at 9.5% - unchanged on June last year, and a slight decline from May's 9.7%. Alongside this, the US GDP growth for the first quarter of this year was revised down from 3.2% to 2.7%, with calendar year figures now down to a range of 3% to 3.5%.

The sluggish economic growth in the US and high employment looks likely to continue to limit beef demand at both retail and foodservice for the rest of this year.

US eyes North Asia prize :  23 July 2010

US beef shipments to Japan in 2010 continue to gather pace, with exports in May jumping 10%, to 13,250 tonnes cwt. US imports are currently restricted to beef from cattle less than 21 months of age. Since March, monthly US cattle placements into feedlots have been above year-ago levels, increasing the availability of eligible cattle for the Japanese market.

US beef exports to South Korea during May increased three fold on the same time last year, accounting for more than half the overall growth in total US exports during May. Beef shipments to South Korea in May totalled 12,899 tonnes cwt - the highest May shipment since the occurrence of BSE in the US in late 2003.

The growth in exports to north Asian markets so far in 2010 has been offset by falls to the US's largest beef export market, Mexico. US beef consignments to Mexico have declined for the fifth consecutive month, with exports in May down 14% year-on-year, to 18,017 tonnes cwt. High US cattle and beef prices and a stronger US$ against the peso continue to impact on the US beef trade to Mexico.

Taiwan culls nearly 14,000 goats in pox virus outbreak :  21 July 2010

Approximately 13,976 goats from 127 Taiwanese goat farms were culled as at 19 June, as the spread of goat pox virus has yet to subside since the discovery of the outbreak in April (Taiwan News).

According to the Taiwanese Council of Agriculture, around 230,000 doses of vaccinations have been purchased to immunise the remaining 220,000 goats currently raised in the country. The goat pox virus is known as a highly contagious disease of small ruminants, characterised by fever, ocular and nasal discharges, but does not infect humans and can be destroyed at high temperatures.

The outbreak has not affected goatmeat prices in Taiwan, as domestically raised goats contribute only about 12% to domestic consumption. In 2009, almost 90% of goatmeat consumption in Taiwan was imported, with Australia's dominating the market.

During the first half of 2010, Australia exported 1,850 tonnes swt of goatmeat to Taiwan, up 12% compared with the same period last year, despite high prices affected by tight supply and the stronger A$.

Imported beef consumption eases in Japan :  21 July 2010

Japan consumed 61,152 tonnes (boneless equivalent) of beef in May, up 3% compared with the same time last year (data by the Agriculture and Livestock Industries Corporation of Japan, ALIC). Imported beef consumption declined by 2% from 2009 to 30,737 tonnes.

The lacklustre performance of the Japanese foodservice sector in May - total sales were down 1.7% year-on-year -combined with the increased import costs of Australian beef, contributing to the subdued consumption. The import value (CIF) of Australian beef during March to May averaged 408 yen/kg, up 9% compared with the same period last year. The A$ during the same period, appreciated 13% against the Japanese yen, year-on-year.

In contrast, consumption of local Japanese beef increased 9% year-on-year in May to 30,415 tonnes. Plentiful supply and slow consumption lowered Japanese beef carcase prices, resulting in reduced retail prices during the month.

Beef ‘back to school' in the Philippines :  21 July 2010

As students in the Philippines entered a new school year in June, demand for Australian manufacturing beef increased, due to the volumes of beef used for traditional beef school meals, including beef burger, corned beef and beef hotdogs.

While most consumers are reportedly withholding spending to accommodate tuition fees and other school needs in June, fine-dining restaurants in the Philippines have offered various promotions to assist sales and are using alternative cuts to ease margin pressure.

Wholesale prices for chilled Australian tenderloin averaged 1,390 Peso/kg (A$34.71) in July, while equivalent chilled US tenderloin prices sold at a premium, averaging 1,850 Peso/kg (A$46.19). Prices for chilled Australian rump registered 480 Peso/kg (A$11.99/kg) unchanged from July last year.

At retail, sales of Australian beef over the two months to July were assisted by an increasing number of modern retail stores offering Australian product, despite Australian beef's premium compared to local product.

EU to maintain restrictions on Brazilian beef :  21 July 2010

The EU is unlikely to change Brazilian beef import regulations, even after a recent visit by the Brazilian Minister of Agriculture to discuss the EU's stringent certification procedures, according to EU industry sources (Valor Econômico).

Since February 2008, Brazilian farms need to be individually audited by Brazilian Ministry of Agriculture (MAPA) technicians and later approved by the EU - this has decreased the number of approved properties from around 10,000, to only 100. Currently, this figure is close to 2,000 establishments.

The recent Minister's visit was intended to pass the approval responsibility to MAPA, but according to the EU Health and Consumer Commissioner, the ease in Brazilian product import controls faces strong pressure from EU producer organisations.

In addition, according to Brazilian producer associations, the number of certified establishments to the EU will increase proportionally as the EU certified steer price premium increases. The mark-up is currently only around 22-30A¢/kg, a level which does not encourage producers to join the system.

Full steam ahead

Although the highly-anticipated winter planting season across the state has turned out to be somewhat patchy, according to a report in Queensland Country Life primary industries continue to have a bright future.

The latest Queensland Rural Debt Survey released last week details how the financial sector has increased borrowings to Queensland agribusinesses by $3.24 billion - or 27 pc - over the past two years to a total of $15 billion.

The level of debt for the beef industry has increased by $2.19 billion (up 36 pc) during the past two years, which is said to be largely attributable to rising production costs and costs associated with drought.

The paper says that there also was debt incurred for infrastructure as some producers moved into beef from other industries. As a result, total rural debt for the beef industry has now reached $8.24 billion.

Red meat stars

Queensland's powerhouse $6 billion red meat industry will pause next month to salute its high achievers says Queensland Country Life when the 2010 Red Meat Innovation Awards are decided at the Royal Queensland Show.

Entries in the Rabobank Red Meat Innovation Awards officially opened last month and organisers have received a flood of nominations in the eight categories during the past five weeks.

The paper says the awards night has become a fixture on the industry calendar as it recognises the significant contributions of individuals and companies towards innovation in the red meat industry.

Awards will be presented at a gala dinner on the first night of the Brisbane Ekka (August 4) at the Meating Centre in the showgrounds, culminating in the Beef Industry Achiever of the Year award.

Feedlots ‘not needed yet'

While recent studies have highlighted the potential for four super feedlots along the Fitzroy River, Australian Lot Feeders Association president Jim Cudmore says the market is not yet ready for the up to 120,000 head of extra cattle they could supply says Queensland Country Life.

State government funded studies have identified nine areas along the Fitzroy which could be suitable for up to for up to four, 30,000-head feedlots, or up to nine 15,000-head feedlots.

The paper says that during the past 12 months the physical feedlot capacity in Queensland was about 630,000 head SCU but Cudmore says that the state operates on only between 50 and 60 pc of that figure.

Cudmore says the cost to develop a 30,000-head feedlot would be in the vicinity of $30-$36 million and says while market forces will eventually determine the need for the expansion at "this point in time we can't justify increasing".

Beef grilling to fan flames - again

Armidale has had its turn and last Friday it was the time for Rockhampton to experience the "exquisite" sensation of beef's long, cold winter of discontent says Queensland Country Life.

Back in February hundreds of beef producers descended on the tranquil New England city to vent their frustration at rising costs, falling prices and red meat consumption, abattoir closures  and the hot-button issue of imports from BSE countries.

Now it is five months down the track and beef producers have again come together, with the same beefs, this time at the Paradise Lagoons property of Queensland cattle baron Graeme Acton.

Acton says the rally provided a forum to launch a "new strategic plan" for the beef industry with proposals to lift prices, reduce costs, restructure and streamline the industry including a revamp of MLA and launch a rural development bank.

Feed system put through its paces

Keenan is pushing ration management to the next level with a new system that won't only improve the accuracy of what's going into the mixer - but what's coming out says The Land.

Its PACE (performance accelerated control enhancement) for beef system combines existing PACE capabilities for loading the mixer accurately and in the right order with capabilities to accurately measure how much is unloaded from the mixer in each pen.

The paper says two systems are currently being trialled on properties in Victoria and northern NSW ahead of a planned launch at the Commonwealth Bank AgQuip field days at Gunnedah next month.

Keenan physical nutritionist (beef specialist) James Bjorkstein says the system allows the operator to program how much feed they want to unload into each pen of a feedlot, ensuring feed provided is kept at its freshest.

Meat judging triumph

The prestigious Roy McDonald Shield has been returned to Australia for the first time in four years says The Land after our team defeated long-time rivals the US to take out the Intercollegiate Meat Judging (ICMJ) competition.

After consecutive years of success by Illinois, Oklahoma and Colorado universities, WA's Murdoch University produced amazing results to take out the contest over the University of Wyoming and other Australian and Japanese universities.

Murdoch coach Peter McGilchrist told the paper that the students on the team had prepared diligently for the competition and that he was "thrilled with the results" which included two team members making the Top 10 finalists.

They will travel to Brisbane later this year to complete an MSA training week. Charles Sturt University's Jessica Loughland was the star of the competition winning various beef and small stock classes as well as the sought-after Founders Buckle.

New England Angus sale leads the way

For the first time in 54 years of the New England Angus Breeders (NEAB) bull sale, to be held this year in conjunction with the Tamworth Charolais sale on July 22, the bulls will be unled says The Land.

NEAB sale president Ewen McLeish says that the decision was made because fewer people are breaking their cattle these days, so the organisers wanted to adopt a more commercial approach to the event.

But he told the paper that did not mean the quality of the offering would be any less than in previous years and that formal judging - with bulls in their pens - will still take place as usual on the day of the sale.

The first NEAB sale was conducted on the Manilla Road at Tamworth in 1956 and McLeish says it is still going as strong as ever. "Breeders are well positioned to capture a range of buyers from southeast Queensland, the Upper Hunter and Orange/Bathurst areas," he says.

Shedding light on weight gain

A report in The Land says how quickly cows shed their winter coats in spring may have an effect on their calves' weaning weights according to research led by Trent Smith, Mississippi State University, with funding from the American Angus Society showing a link between the two.

Smith says the objectives of his three-year study are to develop a method to measure hair shedding, determine the variation in hair shedding and then estimate sheddings effects on 200-day weights and body conditions scores.

He says the team observed 532 cows between 2007 and 2009 in North Carolina and Mississippi to determine if the perception is true that cows which do not shed, or shed later, are not good performers.

Data analysis revealed body score was not significant so researchers focused on weaning weights which revealed that cows which shed by May had, on average, 267-kilogram calves and after May averaged 265-kilogram calves.

Keeping Angus integrity high

The popularity of the Angus brand is growing daily and Certified Australian Angus Beef (CAAB) has taken its commitment to product integrity one step further with International Standards Organisation accreditation says The Land.

The paper says that the breed's ISO accreditation provides third party verification of programs carrying the Angus name - a step which consolidates the diversity of Angus products now on the market.

CAAB chief executive officer Phil Morley says the accreditation also indicates that the business has the management systems, procedures and integrity to provide verification in accordance with the ISO 9001:2001 world standard.

Apart from CAAB and Angus Pure, Morley says there are other processors anxious to benefit from the Angus brand so "we are now providing verification services" for Angus products ranging from five-star restaurants to fast food takeaways.

Alice shines

Centralian beef producers, basking in their best season for a decade, showed the quality of cattle the area is capable of producing at the recent Alice Springs Show annual blue-ribbon sale says Stock Journal.

The 3500-head yarding sold above southern prices - considering the huge freight bill - and the renewed optimism which comes from green herbage flowed into the show although bull-buying budgets were still tight.

The paper reports that although the region received a further 25 millimetres of rain during show week, it was still not definitely raining bids during the bull sale itself, despite the excellent lineup on offer.

This year was the first time in recent memory Angus bulls returns to the sale ring and they were well received with Landmark Alice Springs manager Ian Hayes saying the southern support was a big plus for the event.

Indo rejects hit prices

Cattle from Queensland formerly destined for live export to Indonesia are flowing into Victorian saleyards says the Weekly Times, pushing down prices for medium-weight and trade-weight steers and cows.

According to the paper, Meat and Livestock Australia says that a higher Australian dollar, and ongoing sluggish demand from key US buyers, is compounding that market change.

However, the Eastern Young Cattle Indicator, staged a mini recovery last week but was still below 350 cents, while prices for Japox, 500-600 kilograms, were led by improved prices in NSW.

MLA suggests that this improvement may indicate some interest from Japanese buyers, currently low on stocks and seeking supplies to meet improved demand, which is expected from next month.

Sober up - the party may be over

Prime stock prices may have peaked for this winter according to a report in the Weekly Times, with market trends in the past week suggesting the best money for young cattle and prime lambs has already been paid.

The paper says the beef market is now displaying signs of a mid-winter slowdown, with the Eastern Young Cattle Indicator below 350 cents a kilogram after holding at this level for about the past month.

"The usual suspects of subdued export demand from Asia and the US, combined with the bouncing Australian dollar, have been blamed for taking the shine off physical cattle prices," Jenny Kelly says.

"There has also been increased talk of ‘cheap boxed meat' from the north being put back on the domestic market, and in the past fortnight the paper has seen full eye-fillet steaks stamped with the AMH brand on special at Victorian supermarkets for just $14.99 a kilogram," she says.

Beef's domestic blitz

As if the beef news about the Indonesian export market is not bad enough, the nation's leading exporter has told Weekly Times northern cattle producers will be forced to flood Australia's domestic market with cattle no longer suitable for the Indonesian market.

Wellard Rural Exports managing director Steve Meerwald says Indonesia's decision to enforce its long-standing 350-kilogram limit reinforces the need to explore new markets. Wellard shipped 280,000 cattle to Indonesia last year.

In the past 12 months, Australia's nearest northern neighbour accounted for about 80 pc of all live cattle sold out of the country - or more than 700,000 head - but that figure is set to fall to 400,000-500,000.

"Our exports have slowed over the past six months while weight restrictions are dogging the trade," Meerwald says. But he believes markets including the Middle East, Philippines and Malaysia are possibilities.

Dollar does some serious damage to red meat

The Australian dollar traded 18 pc higher than the previous 12 months and it was the beef and veal industry which paid the price according to Stock and Land, with exports dropping seven pc to less than 900,000 tonnes.

Meat and Livestock Australia senior analyst Tim McRae says rain, or lack of it, also played its part, along with the tentative recovery of the global economy, particularly in our major markets of the US and Japan.

McRae says as a result Australian beef was costing more at a time when buyers in export markets, especially Japan, were looking to keep beef prices lower to maintain consumer demand.

Japan remains Australia's main export market, taking 349,888 tonnes shipped weight, which was four pc below the previous year, while the US contracted even further, dropping 25 pc to 210,514 tonnes - the lowest there since 1996-97.

MLA UPDATE

Rain boosts markets : 16 July 2010

Useful rains across NSW, Victoria, SA and WA over the past week has reduced yardings and lifted prices on young cattle, cows, ewes and restocker lambs. Store buyers have been more active on suitable stock.

Saleyard trade cattle values rose in Queensland, and to a lesser degree NSW, while cow prices lifted in NSW and WA. The national indicator price for Japan steers fell a further 9¢, to 319¢/kg cwt, led by declines in Queensland - a reflection of continuing weak Japanese demand and the rising A$.

Cattle prices often move towards a seasonal peak in August/September, as southern cattle turnoff declines as winter progresses. However, this could be muted this year if the A$ continues appreciating.

The rains and lower yardings did not prevent a further 2% fall in finished lamb prices, as a number of works remain closed for annual maintenance or on reduced shifts, the quality of old lambs is slipping and buyers anticipate a flush of new season lambs by August. Trade and heavy lamb prices are now on a par with last year's July rates, light and Merino lambs are 6-8% higher and restocker lambs are 23% higher than last year (reflecting the good season).

Mutton prices rose 18¢ this week, to 427¢/kg cwt. Prices are 38% up on last year, while numbers yarded are down 32%.

Winter weather continues :  16 July 2010

Rainfall was widespread over the last week, with good falls throughout southern and central Australia as a front swept through late in the week, dumping some of the heaviest July rainfall in years.

Particularly good falls were received in the previously parched WA wheat belt and in cropping areas in western NSW. Large swathes of WA, NSW, Victoria and Tasmania received over 50mm, but it was Mount Buffalo in Victoria that was wettest - at 230mm.

Friday daily livestock article  :  16 July 2010

At Roma, numbers increased by around a third in cheaper market. Yearling steers to slaughter were firm averaging 176¢/kg. A large supply of bullocks were 5¢ cheaper averaging 172¢/kg. Heavyweight D4 cows sold 1¢ lower and settled around 145¢ while heavyweights averaged 146¢/kg.

At Dubbo numbers slipped slightly with a greater percentage of plainer lines. Medium weight yearling steers to feed averaged 182¢, as the heavy feeder steers settled at 183¢/kg. Heavy yearling heifers to the trade sold from 165¢ to 190¢ to remain firm. Medium D3 cows gained 3¢, to mainly sell around 140¢, as the heavy lots settled at 152¢/kg.

Numbers contracted at Bairnsdale with better quality evident in some categories. Medium weight vealer heifers to the trade were 8¢ cheaper at 184¢ while heavyweight yearling steers were firm mostly selling around 187¢/kg. Heavyweight D3 cows were 3¢ dearer to average 155¢/kg.

After Thursday's markets the Eastern Young Cattle Indicator was 2.5¢ dearer than last week at 350.25¢/kg cwt. Trade steers gained 4¢ - to 192¢ and feeder steers were up 1¢ finishing at 189¢/kg. Japan ox lost 2¢ to 178¢ and US cow gained 3¢ to 135¢/kg.

Yardings were lower at Wagga after some mid-week rain. Young trade weight lambs topped at $130/head and averaged firm at 521¢, while the older pens averaged 525¢/kg cwt. Heavy lambs sold from $125 to $142/head and settled around 520¢/kg cwt. Medium weight Merino ewes were highly sought after, topping at $138/head to mainly sell around 510¢/kg cwt.

After Thursday's markets restocker lamb prices eased 35¢ in comparison to last week, down to 465¢/kg cwt. Merino lambs lost 15¢ to 438¢, as light lambs slipped 38¢ - to 434¢/kg cwt. Trade lamb prices were 11¢ cheaper, settling at 508¢ and heavy lambs averaged 496¢/kg cwt. Mutton finished 12¢ higher at 430¢/kg cwt.

Subdued Korean trading activity :  16 July 2010

Australian beef exporters reported slowing enquiries from Korean buyers this week. According to market sources, sufficient beef stocks, seasonally low beef consumption and the weakening won are all contributing to the subdued trading environment.

As a result, prices for imported beef cuts in the Korean wholesale market remained unchanged or were unquoted due to inactivity. The holiday season from mid July to mid August may also add to slowing the trade, as some Korean importers take a break.

Beef exports from Australia to Korea from 1-12 July this year were steady at 4,424 tonnes swt - chilled beef accounting for 24% (DAFF). While chilled beef's share of exports has declined, January to June volumes increased 29% on 2009.

DPJ faces political setback in Japan : 16 July 2010

The ruling Democratic Party of Japan (DPJ) experienced a substantial political setback last Sunday, with the largest opposition Liberal Democratic Party (LDP) and allied parties winning the majority in the Upper House election. The so called 'twisted Diet' (the opposition controls the Upper House while the ruling party remains in control of the Lower House) situation will likely put further pressure on the DPJ's political stability. In the meantime, negotiations on foreign trade policies may take a back seat to more pressing matters, such as a possible consumption tax increase and economic recovery measures.

In the Australian beef export market, Japanese businesses remained cautious this week, with the higher A$ causing a fall in the A$ export prices to Japan. Reports that the US market is gaining momentum prompted some Japanese buyers to lift bids on trimmings and some frozen products, but otherwise buying was still subdued.

About turn for US prices :  16 July 2010

After 11 weeks of decline, the imported beef market in the US turned around, as US domestic manufacturing beef supply has been falling over the past three weeks. Also, prolonged spot trading earlier in the year saw some US end-users going into the 4th of July holiday period with lower inventories.

Previously, it was indicated that the market is likely to have already seen its peak in imported prices. However, it appears imported beef supplies are falling short of current demand, particularly as US domestic supplies are tightening. The market may continue to rise into August, but seasonally, the imported manufacturing beef market tends to drop away come September, as grinding beef demand falls.

US protein prices forecast higher :  16 July 2010

Average US cattle and hog price forecasts for 2010 were revised down recently due to changes in forecast US beef and pork production, although prices are still expected to remain above year ago levels.

The recently released USDA World Agricultural Supply and Demand Estimates report, saw a slight upward revision in US beef production for 2010, due in part to higher cow slaughter so far this year and an increase in cattle placements into US feedlots over the past couple of months. However, US beef production for 2010 is expected to be 1% below 2009, at 11.69 million tonnes cwt (25.768 billion lbs).

Given tighter meat supplies, higher exports and some improvement in US meat demand, average US steer prices for 2010 are forecast to jump 12% on 2009.

The forecast for 2010 US pork production was also raised slightly, to 10.1 million tonnes cwt (22.269 billion lbs), although 3% below 2009. Higher slaughter and heavier carcase weights during the second quarter was the premise for USDA's revision. Despite recent increases in supply, US hog prices for 2010 are still predicted to jump 33%.

Contrary to beef and pork, 2010 US broiler production is predicted to increase 3% on 2009 volumes, as lower feed costs push bird weights and numbers up.

While it would be expected that higher production would translate to cheaper chicken, USDA is forecasting average US broiler prices to rise 8% in 2010. This is due to lower beef and pork production, and an expected boost in US poultry exports for the rest of the year, due to a resumption of exports to Russia.

Chilean beef imports up in 2009-10 : 15 July 2010

Chilean beef imports during 2009-10 increased 35% year-on-year to 133,822 tonnes swt. The rise was a result of the strong economic conditions, low domestic production and the higher imports from Paraguay, which jumped 36% to 79,503 tonnes swt.

Argentinean shipments to this market also increased a noticeable 36% to 39,419 tonnes swt during the period. However, most was imported during the second half of 2009 as production fell, with negligible recovery expectations during 2010.

Brazilian imports jumped 771% in 2009-10 to 10,859 tonnes swt as a result of increased access into the market. However, shipments from Brazil remain short of 2005-06's 24,593 tonnes swt.

Imports from Australia reached 1,715 tonnes swt (with the majority shipped during the second half of 2009) with an average CIF price of US$5,203 tonnes swt.

Butcher sales steady in 2009-10 : 15 July 2010

Butcher sales during 2009-10 were steady (beef and lamb) to higher (pork and chicken) compared with the previous year, according to MLA's butcher survey carried out by Millward Brown.

Of the 1,273 butchers interviewed in 2009-10, 53% reported 'very good to excellent' beef sales, steady compared with 52% in 2008-09. Sales of lamb were also stable on a year earlier, following 40% of respondents noting 'very good to excellent' returns. Lamb sales were particularly softer during the two months to June, as a number of butchers noted heavy lamb quality affecting sales.

Pork sales improved in 2009-10, as 34% of respondents indicated 'very good to excellent' sales compared with 30% the previous year. Around 47% of butchers also reported 'very good to excellent' sales of chicken during the 12 months to June, up from 43% reported in 2008-09.

Results from the butcher survey in 2009-10 also revealed a smaller proportion of butchers describing themselves as 'thriving' (16% compared with 23% in 2008-09). Meanwhile, more respondents noted their business as 'usually slow or struggling' (12% from 8% in the previous year). The percentage of butchers (69%) regarding themselves as 'doing OK' remained unchanged from a year earlier.

During 2009-10, the survey of butchers also indicated that prices of all meats averaged higher on a year ago.

Brazilian beef exports stable in 2009-10 :  5 July 2010

Brazil maintained its position as the world largest beef exporter during the past 12 months (July 2009 - June 2010) with exports increasing 0.3% on the previous year, to 958,034 tonnes swt.

Russia remained Brazil's main export destination during the period, despite shipments contracting 11% on the previous year, to 304,106 tonnes swt. Low prices in the Russian market, combined with constrained demand from local importers after the global financial crisis, encouraged Brazilian exporters to look towards other markets including the Middle East and South-East Asia.

Iran became Brazil's second largest market in 2009-10, with volumes jumping 97% year-on-year, to 159,175 tonnes swt, followed by Hong Kong (up 23%, to 98,900 tonnes swt) and Egypt (down 14%, to 67,510 tonnes swt).

While easily maintaining its position as Brazil most lucrative market (on a per tonne basis), exports to the European Union continue to remain well below the record volume shipped in 2005-06, at 290,908 tonnes swt. With restrictions in place since February 2008, triggered by traceability and food safety concerns, Brazilian beef exports to the EU in 2009-10 reached 47,082 tonnes swt, which was an increase of 76% on the very low 2008-09 total.

Average Brazilian beef exports prices (FOB) for the year increased 1%, to US$3,659/tonne year-on-year, as the Brazilian real appreciated 16%, to average 56US¢ in 2009-10. In local currency terms, average steer prices declined 8%.

The Brazilian Beef Exporters Association expects exports to increase in 2010, when compared to 2009, although remaining below the 1.023 million tonnes swt shipped in 2008 and the record 1,286 tonnes swt shipped in 2007.

Korea delays beef talks with Canada  :  15 July 2010

Bilateral talks between Korea and Canada to be held on 13 July this year to discuss the resumption of Canadian beef imports into Korea were unexpectedly delayed (Maeil Business Newspaper).

The Korean Ministry of Food, Agriculture, Forestry and Fisheries notified their Canadian counterpart of the delay as more time is needed to gather data in order to hold talks effectively. The Korean agricultural ministry plans to come up with a nationwide agreement, involving livestock and quarantine experts, producers and consumers before the talks take place.

Canada has not exported any beef products to Korea since bovine spongiform encephalopathy (BSE) was found in Canadian livestock in May 2003. However, the World Trade Organization for Animal Health has declared Canada "a controlled BSE risk" country since 2007.

Korea is currently reviewing its plan regarding Canadian beef imports after the Canadian government took the issue to the World Trade Organization for settlement of the dispute.

The Korean government is anticipating further discussions with Canadian officials in August this year.

May beef production declines : 15 July 2010

While Australian beef production increased year-on-year during May, it remained well below the five-year average, as producers continued to withhold stock after the better start to 2010. May is traditionally a high period for cattle throughput, as producers cull numbers in preparation for winter.

Driven by better seasonal conditions across eastern Australia, production reached 189,578 tonnes cwt for the month, 4% behind the five year average of 196,730 tonnes cwt.

Accordingly, production in Queensland was back 8% against the five year average in May, in line with lower slaughter levels, at 93,482 tonnes - just under half of total Australian processor output for the month. Production in NSW was back 1% to 40,099 and up 1% in Victoria to 31,768 tonnes, despite slaughter numbers in both states being well back against the five year average. The vastly improved season in Victoria and NSW has allowed much better conditioned cattle to hit the market, lifting the national carcass weight average to a new record of 272.8kg/head for Jan - May.

Production in SA rose 25% against the five year average to 9,412 tonnes, again boosted by a much better season, while numbers fell 9% in Tasmania (4,963 tonnes) and were steady in WA, up 1% to 9,771 tonnes.

Green Brazil  : 15 July 2010

The Brazilian Ministry of Agriculture has launched its Low Carbon Agriculture program (ABC), which will support sustainable farm practices, the recovery of degraded land and the integration of cropping, livestock production and forestry.

The program, which is budgeted at A$1.3 billion during the first 12 month period, is part of the Brazilian government's strategy to recover 15 million hectares of degraded pastures and achieve a 39% reduction in carbon equivalent gas emissions by 2020 (Scot Consultoria).

Global economic outlook upgraded - IMF :  15 July 2010

The International Monetary Fund (IMF) has upgraded the outlook for the global economy for the remainder of 2010, to 4.6%, assisted by a better than initially projected performance in the first half of the year, with upwards revision to output for the US and Japan. However, the main contributor to the higher growth expectations for 2010 has been from the emerging and developed economies, including China, India, Brazil and Russia.

After the sharp contraction in economic growth throughout the second half of 2008 and throughout 2009, the global economy appears to be on track to record a strong recovery in 2010, with this to be sustained for 2011. However, the IMF did state that significant risks still remain that could derail a recovery, including financial turbulence and debt issues throughout Europe.

Despite sustained high unemployment levels and ongoing financial jitters, the US economy is projected to expand at 3.3% for 2010, a substantial turn-around from -2.4% in 2009. For 2011, the US economy is expected to grow at 2.9%. After recording an economic contraction of -5.2% in 2009, the Japanese economy is projected to grow at 2.4% in 2010, and 1.8% in 2011.

The rapid expansion of emerging and developed economies continues to add strength to the global recovery, with China's growth forecast at 10.5% in 2010, followed closely by India (9.4%), South East Asia (6.4%) and Brazil (7.2%). Economic conditions in Russia are projected to go from of -7.9% in 2009, to growth of 4.3% in 2010.

According to the IMF, Australia's economic growth is forecast to reach 3% in 2010, increasing to 3.5% in 2011.

The financial collapse and recessionary period throughout 2008 and 2009 had a significant impact on beef demand, especially across advanced economies, including the US and Japan. However, the projection for better economic conditions in coming years should point towards a recovery in consumer demand, including for beef, which should be welcome news for Australia's export dependant red meat industry.

Middle East performs strongly in 2009-10 :  5 July 2010

Australian red meat exports to the Middle East region performed strongly during the 2009-10 financial year, with lamb volumes up 10% to 33,410 tonnes swt, beef up 40% to 19,423 tonnes, and mutton back only 5% to 46,202 tonnes.

Tight mutton supply in Australia caused a slight drop in exports to the Middle East, lamb increased as a result of continuing strong demand despite rising prices for sheepmeat, while beef benefited from increased demand for topsides, thick flank and knuckle.

The timing of Ramadan this year (August 11) and the resultant adjustment to school holidays have combined to create a 'mini' expatriate exodus. This has directly impacted on retail and hotel occupancy levels in the region resulting in a challenging trading month for June 2010. A more conservative approach by many importers with Ramadan ordering patterns has also impacted on the June import levels.

Volumes for June saw lamb down 12% on last year, mutton losing 45%, while beef continued its rise, growing by 57%.

The main mutton falls were in Saudi Arabia (down 76%; 2,298 tonnes to 559 tonnes) and the UAE (down 45%; 828 tonnes to 457 tonnes). Some interesting rises however were experienced in Bahrain (up 5,815%; 6 tonnes to 355 tonnes) and Egypt (up 176%; 146 tonnes to 404 tonnes).

Conditions considered, lamb held up relatively well with Saudi Arabia increasing 46% (215 tonnes to 313 tonnes) and Jordan increased by 7% (822 tonnes to 876 tonnes). With temperatures in Kuwait often in the 50 degrees plus region, it is an example of seasonal influence with a fall of 34% (394 tonnes to 259 tonnes) and the UAE fell 25% (1,343 tonnes to 1,013 tonnes).

Beef benefited from increases to Egypt (up 346%; 130 tonnes to 578 tonnes); the UAE (up 69%; 308 tonnes to 523 tonnes); Jordan (up 121%; 73 tonnes to 161 tonnes) and Bahrain up by 1,066% from 5 tonnes to 53 tonnes.

Volatile year for beef

A fluctuating dollar, erratic export demand and unexpected seasonal conditions all led to an unpredictable financial year for beef cattle producers according to a report in the Weekly Times.

The paper says that in the financial year just ended, national beef cattle prices slipped 2.5 pc on average, but at the same time producers sent more cattle to market.

Meat and Livestock Australia economist Tim McRae says the past 12 months have been characterised by a volatile Australian dollar and sluggish export demand - with returns from our two major markets both dropping, as did returns in Australian terms due to the dollar.

Total export volumes of boxed beef and veal were back seven per cent to 898,960 tonnes he says while exports to the US dropped 25 pc to 210,500 tonnes and shipments to Japan were down four pc.

Another case of FMD in Japan

A new case of foot and mouth disease (FMD) was discovered in Japan last week according to a report in the Weekly Times, extending the unprecedented FMD outbreak in Japan's Miyazaki region.

The paper says that according to World Organisation of Animal Health data, the outbreak, which began in April, has so far resulted in 188,753 animals - 153,676 pigs and 35,019 cattle - being destroyed.

Since the first reported outbreak there have been 290 outbreaks of FMD recorded with WOAH but movement restrictions in the infected areas were gradually being removed. However, following the new infection it is clear the outbreak is not over.

The self-imposed export ban on all beef is still in place, except to Hong Kong and Macau, and according to MLA, weak market conditions in Japan held Australian beef and veal exports for June back 14 pc year-on-year, to 27,691 tonnes shipped weight.

Top grade

The Meat Standards Australia (MSA) grading program continues to grow at an exponential rate judging by its recently released end-of-year figures according to a report in the Queensland Country Life.

Those figures show that MSA cattle numbers graded across Australia reached just over 1.25 million head for the 12 months ended June 30 - which is a spectacular 28 pc rise on the previous financial year.

MSA beef grading numbers passed the one million head for the first time in a 12-month period to December 31 and since then activation of MSA programs in a number of abattoirs, and expansion of programs in existing MSA-licensed plants, has further boosted numbers.

Despite the high throughput, the rate of compliance in cattle against MSA specifications has continued to creep higher, rising to 91.7 pc nationally for the June 30 year - up almost one pc on the previous financial year.

Science gives boost to beef market access

CSIRO has conducted research into the prevalence of non-O157 E. coli strains in Australian beef according to Queensland Country Life - the very same varieties that are gaining adverse attention in US and European markets.

Results suggest the presence of these strains in Australian beef cattle is very low, reinforcing previous findings that support our position as a source of quality, clean, green meat products.

Dr Kari Gobius, food safety research leader at CSIRO, says that the research is important for safeguarding the health of consumers and reducing the socio-economic costs associated with medical treatment.

Gobius says the research - which focused on methods for detecting and isolating bacterial strains related to, but different from, the more common E. coli O157 - also ensures the Australian beef sector can readily adapt to changing regulations, maintaining access for our $7 billion export industry

Biloela trial reveals NLIS value

Central Queensland beef cattle producers are invited to a July 15 Biloela district field day to see firsthand how NLIS technology can be used to improve herd management and business profitability says Queensland Country Life.

Department of Employment, Economic Development and Innovation (DEEDI) FutureBeef industry development officer Lindy Symes says the on-property NLIS day will finalise a three-year producer demonstration site trial.

Project co-ordinator Gavin and Megan Muller will host the event from 9.30 am to 3 pm at their Callide Valley property Gavyna where the NLIS project has used weaners sourced from the Muller's co-owned Ubobo breeding property Cooinda.

The MLA funded trial, an initiative of the eight family businesses within the CQ BEEF Biloela group, is aiming to demonstrate how the collection of NLIS data could help solve livestock management problems. Details from 07 4992 9178.

Fertility under the microscope

It has only been in recent years that the bovine semen morphology assessment has literally come under the microscope as a further check on a bull's fertility according to a report in the Queensland Country Life.

To maximise production potential astute beef producers have been applying bull soundness evaluation examinations before seasonal paddock mating as well as those used in AI programs to fast-track superior genetics.

Department of Employment, Economic Development and Innovation (DEEDI) FutureBeef extension officer Ken Murphy says the issue of cattle semen quality assurance has been raised at CQ BEEF Moura and Bajool producer group meetings.

Murphy says the interest in semen assessment with a focus on morphology was expressed by seedstock breeders and commercial operators. An assessment of semen for morphology or shape of the sperm identifies whether an individual sperm is normal, or abnormal, in shape.

Taste for Angus beef on a roll

It appears the taste for Angus beef is extending far beyond out supermarkets and burger chains according to a report in the Queensland Country Life.

Angus Australia chief executive Peter Parnell, has told the paper that breeders in Queensland - and elsewhere in the country - are receiving more inquiries from beef producers keen to introduce Angus genetics into their herds.

In an article featured in the paper's crossbreeding special report Fusion 2010, Parnell says increased recognition of the Angus brand as a "premium" product is now having an impact in the paddock as well as on the plate.

He says there is "no doubt we are seeing an upsurge" of interest in Angus genetics among beef producers in northern Australia, based on Angus' proven ability to enhance meat quality and improve compliance to MSA grading.

Casserole on the menu

Meat and Livestock Australia's latest marketing campaign is seeking to put beef casseroles back on the family dinner table this winter according to a report in The Land, with new recipes and advice on cut selection and cooking.

MLA marketing general manager David Thomason told the paper that the previous two campaigns were successful in increasing the volume of beef casserole cuts purchased.

Thomason says that in winter last year, beef servings over the campaign period averaged 52.67 million a week, which was 6.81 million per week higher than the same period in the previous year according to Roy Morgan data.

He says MLA is aiming to not only build householder confidence to cook a greater range of beef dishes, such as casseroles and roasts, but to drive further beef purchasing by enticing consumers to expand their repertoires to include meals such as goulash, curries and beef bourguignon.

Coles launches state-of-origin campaign

Coles supermarkets has launched its "100 pc Qld Beef" logo, which a report in the Stock and Land says will be shown on packs of beef containing locally bred  and raised product sold within the State.

The paper says that the initiative will draw on information from the National Livestock Identification Scheme (NLIS) which will allow the retailer to accurately trace the origin of its beef products.

The culmination of a long-held desire to develop a hole proof system with Australian Country Choice and Colesstock, the logo has provided further proof of Coles support for Australian producers says its meat general manager Allister Watson.

Watson says the program has also been introduced in a direct response to consumer feedback which revealed the chain's customers wanted to know where their products were coming from.

Cattle Council yearbook

Cattle Council of Australia's 2010 yearbook is now available to beef producers and those interested in learning about national "hot topics" affecting Australian beef cattle producers according to Stock and Land.

The paper says that the yearbook covers market access progress, environmental policy, emergency animal disease response plans, beef-focused research, development and extension initiatives and market statistics.

The yearbook also contains summaries of beef farming issues at the State and national level, as well as insights into peak industry groups such as State farming organisations.

Copies of the yearbook are free from the Cattle Council of Australia office by contacting 02 6273 3688 or e-mail cca@cattlecouncil.com.au.

Beef processors adjust for export

With the Indonesian government imposing its 350-kilogram restriction on live cattle imports, Stock and Land says the entire Australian cattle market is currently challenged by, and reorganising for, a fundamental shift in buying demand.

And adjusting to this change has meant a larger number of cows, heavier steers and bulls that would have been exported live are now seeking slaughter at home rather than abroad, suppressing the usual mid-winter price spike by congesting kill space at some export plants.

Ruralco NT specialist Peter Watkins  says if anyone remains unconvinced the northern live export industry does not have an influence on southern cattle prices, now is the time to take notice.

Watkins says in the past the northern live export has virtually been an "open slather" affair, taking all weights and grades of cattle but by enforcing its longstanding 350-kilogram limit it means suppliers of rejected northern cattle are now looking for markets elsewhere.

MLA UPDATE

Volatile A$ continues - 09 July 2010

The A$ continued to be volatile this week, moving as much as 2¢ (or 3%) against the US$ during one day's trade, to finish Thursday at 87US¢ (Reserve Bank of Australia)

The A$, which moved over a range of 3.5¢, or 4% for the week, initially surged on improved confidence from overseas investors, which lifted markets in general. This was added to by the release of strong jobs growth by the ABS on Thursday, which raised the likelihood of further interest rate increases in coming months.

The A$ is now 3% lower against the US$ than at the beginning of the year, 7% lower against the yen at 77¥, and 2% higher against the Korean won at 1056won.

Korean beef trading activity eases - 09 July 2010

Similar to last week, Australian beef exporters reported steady to easing demand from Korean importers. Subdued Korean beef consumption during summer, and solid beef stocks as a result of increasing beef imports this year may have affected trading activity.

Subsequently, prices for the majority of imported beef cuts decreased in the Korean wholesale market this week. The most significant drop in value was for imported short ribs, after registering price hikes from the start of this year until early June.

Currency volatility is currently gripping both Australian beef exporters and Korean importers. Reportedly, the Korean won was at a two week high on 8 July - responding to news that US retail sales rose from January to June this year. The A$ also jumped on the same day, to a weekly high of over 87US¢, as employment figures came in much higher than expected (Bloomberg).

Cattle market wrap - 09 July 2010

Financial year cattle slaughter down

Eastern states cattle slaughter numbers for the 2009-10 financial year contracted 6%, to just over 6.1 million head. Calf slaughter fell 7% compared with the previous year, with 542,909 head processed nationally.

The majority of the fall in slaughter was in Victoria, down 22%. This was largely due to the high turn off of cattle in the previous year, associated with the liquidation of the dairy herd. The number of cattle to slaughter in NSW and Queensland was also reduced, falling by 3% and 4%, respectively, with a wet January and February restricting shifts for some northern processors as sufficient cattle could not be sourced. These falls were partially offset by a rise in SA, where cattle slaughter increased by 11%.

Compared with June 2009, slaughter in most states increased, with eastern states slaughter up 10%. NSW remained relatively steady - with 181,552 head processed. Queensland kills increased 13%, with many processors having a good supply of cattle coming out of the northern, central and western districts. Victorian slaughter increased 5% and SA numbers more than doubled compared with June 2009.

SA cattle supply drops

SA cattle throughput fell 18% compared with last week. No sale at Millicent was a factor, but lower yardings at Naracoorte and the SA Livestock Exchange also contributed - falling by 36% and 41%, respectively.

The reduction in numbers had a mixed effect on prices. Yearling steers to the trade recorded gains of 3¢ to 5¢ as medium weights averaged 178¢, and heavyweights sold to a top of 195¢ and averaged 180¢/kg lwt. Despite spirited bidding from lot feeder buyers at the SA Livestock Exchange, feeder rates could not be maintained, resulting in medium yearling steers slipping 4¢ to average 186¢/kg lwt. Yearling heifers followed a similar trend, with C3 medium and heavyweights to slaughter improving up to 12¢/kg lwt.

Heavyweight C3 grown steers improved 1¢, to average 178¢, while heavy D3 cows averaged 3¢ cheaper to mostly sell around the 138¢/kg lwt mark.

Grown steer supply improves

This week, the supply of grown steers increased 16% across MLA's NLRS reported markets compared with last week. The lift in supply did little to dampen prices, with strong competition from processors helping to maintain or improve last week's rates.

Most of the increase was a result of grown steer throughput improving 45% in NSW. Most of the grown steers were yarded at Dubbo, CTLX and Wagga. An excellent pen of 12 B3 steers estimated to weigh 560kg lwt topped the state reaching 199.6¢/kg lwt. The large increase in numbers at the Roma store sale resulted in grown steer offerings in Queensland increasing 11%, with Victoria experiencing a similar lift.

The majority of the increase was in the medium and heavyweight categories. The improvement in quality outweighed greater supply, with better quality pens attracting demand and making higher average prices. Nationally, heavyweight C3 pens averaged at 172¢/kg lwt up 2¢.

Alice Springs store sale - 09 July 2010

The annual Alice Springs Show store sale was held in light steady rain and muddy conditions, which was quite different to the normal. A mixed quality yarding of 3,051 steers and 527 heifers sold to solid competition from the 22 registered buyers.

The cattle were in generally good condition, due to the rainfall that most districts around the "Alice" registered earlier in the year.

The British C2 vealer steers sold from 165¢ to 180¢, and Santa Gertrudis drafts averaged 160¢/kg lwt.

Yearling Shorthorn steers sold from 160¢ to 189¢/kg, with the EU lines at the higher end of prices.

Yearling heifers in small runs sold at 150¢ for the Droughtmasters, 149¢ for the Santa Gertrudis and 152¢/kg lwt for the Charolais crosses.

Markets slide as numbers increase -09 July 2010

Cattle and lamb markets came under downward pressure this week, as numbers and the A$ rose.

The main price falls were for finished lambs, which are still in good supply due to the favourable pasture and grain feeding situation. Lambs yarded at MLA's NLRS reported sales rose 17% this week, led by NSW and WA, to be 10% up on the same time last year. The peak prices for this winter appear to have been in June, as markets are now impacted by seasonal export works closures and shift cutbacks. Also, the NSW sucker turnoff is expected to be early this year (by August).

National average mutton sheep prices defied a 20% jump in yardings and the higher A$ to rise 7¢, to 407¢/kg cwt, led by NSW.

After staying within a cent of 350¢/kg cwt for the past month, the EYCI broke away this week, dropping to 347.75¢. This was influenced by rising cattle numbers from Queensland and NSW, the sluggish US market and higher A$. Prices for cows, medium steers and trade cattle followed suit.

One exception was Japan steers, with the national price indicator up 9¢, to 328¢/kg cwt, due principally to an 18¢ rise in NSW, despite a 45% jump in grown steer sales in that state. This probably indicates some pick up in Japan interest in anticipation of the end of the summer rains and improved beef demand from August.

Unseasonable northern rain - 09 July 2010

Despite scattered rain throughout the eastern states, the heaviest falls this week were across northern Australia - very unseasonable for this time of year. Parts of the Barkly district had heavy falls, while in the Alice Springs Region, Yuendumu received 127mm - weather more suited to the wet season. Further rain is expected over much of WA in coming days, while a vigorous cold front is forecast for south-east Australia early next week.

Slow demand in Japan - 09 July 2010

There was a lack of active interest from Japan for Australian beef most of this week, despite some stocks in the market reportedly getting low. Buyers were cautious across the board, with the exception of inquiries for trimmings and briskets.

The higher A$ this week and restrained demand resulted in softer export prices to Japan, reducing returns to Australian exporters.

In the Japanese livestock market, Chikusan Nippo reported that adult cattle slaughter numbers in June contracted 8.4% year-on-year. The fall was largely due to the foot-and-mouth outbreak in Miyazaki (the third largest prefecture for beef cattle in Japan), and subdued prices in the Japanese wholesale carcase market. The fall in supply, however, seemed to have had little affect on wholesale or retail prices for Japanese domestic beef, as meat demand overall remained slow during June.

Imported beef not feeling the US heat - 09 July 2010

As temperatures in the US soared over the Independence Day holiday weekend and into this week, imported beef prices and demand reportedly cooled.

Areas on the US east coast saw temperatures swelter up to 43 degrees Celsius this week, which counteracted an expected boost in consumers 'grilling' a large proportion of meat items such as hamburgers and rib eye steaks. Instead, consumers reportedly opted for lighter meals at the detriment of beef and lamb.

The imported beef market in the US traded lower this week, despite lighter volumes reportedly traded. The CIF indicator price for imported 90CL shed 1.5¢ on last week, to 147.5US¢/lb CIF, while in A$ terms the indicator dropped 18.2¢, to 341.6A¢/kg FAS.

Imported beef supplies still remain lower than year ago levels from Australia, New Zealand and Uruguay. However, over the past two months, Australian beef volumes to the US have lifted amid an increase in Australian beef production during May. Recently released figures for Australian beef exports to the US show June volumes jumping 12% on the same time last year, to 24,434 tonnes swt, largely due to an increase in manufacturing and middle cut exports.

China lifts ban on imports of Canadian beef  - 08 July 2010

China has agreed to resume beef imports from Canada, seven years after banning the trade as a result of bovine spongiform encephalopathy (BSE) concerns.
According to a statement jointly made by China's General Administration of Quality Supervision, Inspection and Quarantine and Ministry of Agriculture on 2 July, beef imports from Canada will resume in stages, starting with boneless beef from animals under 30 months of age and beef tallow for industrial use.

According to Global Trade Atlas, China imported 221 tonnes of frozen boneless beef from Canada in 2002 - 2% the total China beef import market - before being barred in May 2003.

Brasil Foods hit by antitrust recommendations - 08 July 2010

Brasil Foods S.A., the company resulting from the prospective merger of Brazilian food processors Perdigão and Sadia, has been hit by the recommendations given by the Brazilian Ministry of Finance (SEAE) prior to approval by Brazil's antitrust agency, CADE.

Perdigão and Sadia have long been two of Brazil's major poultry processors, with increasing market share and diversification in dairy, pork, beef, and other processed products. These companies enjoy strong brands in emerging export markets for chicken and ready-meals. Overall, 42% of Brasil Foods S.A. is from exports (Beefpoint).

The recommendations for approving the merger include the possibility of brand leasing, or selling some assets. According to the SEAE, the company may have excessive concentration in some markets, which may complicate the entry of new competitors. Investors have perceived these recommendations as largely detrimental to the success of the company, impacting share prices.

Record beef exports to South Asia in 2009-10

Australian beef exports to South East Asia and Greater China jumped 20% in 2009-10 on the previous year to 131,216 tonnes swt, despite the high A$ and subdued supply towards the end of 2009-10 curbing shipments from Australia.

Interestingly, demand for quality beef in South East Asia and Greater China seemed unaffected by the global financial crisis, with both chilled shipments and grainfed beef exports in 2009-10 reaching new records (13,978 tonnes swt and 9,463 tonnes swt, respectively).

Assisted by strong demand and available supply over the first half of 2009-10, exports to most markets in the region also reached new records (China, Hong Kong, Indonesia and Malaysia) and seven year highs (Taiwan and Philippines), except for slight decreases in shipments to Singapore and Vietnam.

Driving the increase in exports to the region 2009-10 was record shipments of most popular beef cuts, including manufacturing beef (37% of the total shipments), shin shank (17%), blade (8%), knuckle (7%), neck (6%), silverside (4%) and striploin (3%). Intercostal shipments bounced to a six year high (3% of the total exports), resulting from increased demand from Taiwan.

Despite the record shipments to South East Asia and Greater China, total exports to the region over the latter half of 2009-10 were steady. The stable trade resulted from a combination of decreased enquiries for Australian beef (Indonesia, Singapore and China) and increased shipments following improved economic (Philippines) and market access (Malaysia) conditions.

Beef offal prices flat in June - 07 July 2010

Beef offal prices were flat in June, with weaker prices for higher yielding offal reportedly dragging overall prices down (MLA's Monthly Co-products Monitor). The lower A$ gave some support to prices - averaging 85US¢ over the month, 7% less than the beginning of the year - but not enough to prevent overall returns slipping (Infoscan).

Korean and Japanese offal prices tended to be weaker over the month, despite much larger volumes of beef offal reaching each market. Offal exports to Korea in June rose 53% year-on-year to 2,067 tonnes swt, with large increases in both tail and tripe shipments, while exports rose 6% to 2,573 tonnes in Japan. Swiss-cut tongues averaged $10.30/kg, 22% less year-on-year, while rumen pillars (500-700gms) fell 2% to $5.81/kg. Tendons averaged 24% lower at $4.22/kg, while thickskirt ($3.94/kg) and thin skirt prices ($4.04) were flat.

Halal offal prices were almost all weaker following the wider market down, with lips the only exception at $2.39/kg. Halal hearts ($1.47), kidneys ($0.95), liver ($1.18) and tripe ($2.23) were all weaker, falling 21%, 20%, 5% and 4%, respectively, over the month. Halal prices should find support in coming months, as Ramadam approaches in August, and importers seek to build stocks.

Liver and heart prices reportedly suffered from weaker demand in Russia, where offal exports fell 8% to 592 tonnes swt. Livers averaged $1.13/kg in June, 3% higher year-on-year, while kidneys fell 16% to $0.81/kg. Heart prices also declined in June, averaging 17% less than a year earlier at $1.31/kg. Tripe prices averaged $1.99/kg, 10% less than a year earlier, with congestion and hold-ups in a number of overseas ports such as Hong Kong reportedly affecting prices.

Korea not renegotiating FTA with US - 07 July 2010

US President Barack Obama's remarks on 26 June on restarting discussions on the yet to be ratified Free Trade Agreement (FTA) with Korea were quickly rebuffed by Korean trade minster Kim Jong Hoon who indicated that no revisions will be made (Yonhap).

The US President announced he would have his administration engage with their Korean counterparts in order to have a revised trade agreement ready for the next G20 summit in November this year (AFP). It was the first time the US has provided a timeline on the Korea-US FTA, which was signed under the Bush administration in June 2007, but not progressed due to US concerns over access to the Korean market for American beef and automobiles.

Korean trade minster Kim Jong Hoon responded to Obama's comments by explaining that any further consultations regarding the FTA would only be held on a "working level", as both countries have previously agreed on everything else (Foodmarket).

The largest trade union in the US (the American Federation of Labor and Congress of Industrial Organizations) also expressed opposition to the ratification of the current agreement. The union is seeking improved access to the Korean market for US automobiles and beef - the latter being restricted by Korea only importing US beef from cattle under 30 months old due to fear of mad cow disease (Foodmarket).

Rising sterling ends UK meat industry summer - 07 July 2010

UK exporters are adjusting to difficult trading conditions, as the pound sterling strengthens against the euro after depreciating in 2008 (the result of the financial crisis).

In 2009, British packers faced favourable conditions, with increased export shipments into the euro zone as a result of the positive currency trading conditions (as well as higher prices of imported meat in pound sterling terms into the UK, increasing the competitiveness of local product in the domestic market). In addition, imports to the euro zone from South America, New Zealand and Australia have been not been largely benefited as these countries' currencies also regain value.

Local producers also benefited by the sterling's lower values, as farmgate prices rose due to increased export demand and increased payments to producers (set in euros in the Common Agricultural Policy) in sterling terms, temporarily ending the decline in the breeding herd. However, cow slaughter has increased 10% during the first five months of 2010 year-on-year, weakening prices.

Beef exports to Japan fall in June - 07 July 2010

Australia exported 27,691 tonnes swt of beef to Japan in June, down 14% year-on-year (Department of Agriculture, Fisheries and Forestry). Slow in-market demand during May resulted in cautious buying by Japanese importers in June.

In May, average purchase volumes of Australian beef at retail in Japan were only 84% of the previous year's volumes (point of sale data, Agriculture and Livestock Industry Corporation of Japan). The foodservice sector also lacked spark during the month, with consumers spending modestly when eating out, as they are still concerned about the country's economic recovery.

Subsequently, Australian beef exports to Japan in June declined year-on-year for most categories, in particular for grassfed beef - both chilled and frozen exports were down 26% to 3,756 tonnes and 20% to 11,791 tonnes, respectively. Total beef exports to Japan between January to June were 4% below the same period last year, at 172,032 tonnes.

Tough 2009-10 for Aussie beef exports - 07 July 2010

Australian beef and veal exports for the past fiscal year (July 2009 - June 2010) contracted 7%, due to lower beef production, the high A$, increased US competition and sluggish export demand - as major markets slowly recovered from deep recessions. Exports for the year totalled 898,960 tonnes swt, with falls to Australia's two largest markets, Japan and the US (Department of Agriculture, Fisheries and Forestry - DAFF).

One of the main overriding factors for the past 12 months for Australian beef exports was the slow and tentative recovery of the global economy after the deep recession. As the fallout from the recession extended globally, it was the impact on US and Japanese consumer demand for beef which hit Australian exporters, accentuated by a much higher A$.

The A$ in 2009-10 averaged 18% higher than the previous year, at 88.2US¢, which added to the cost of Australian beef at a time when buyers in exports markets, especially Japan, were looking to keep prices lower to maintain consumer demand. Against the Japanese yen, the A$ averaged 9% higher, at 80.6¥, while it jumped 17% against the euro, 10% on the Korean won and 7% against the Indonesian rupiah.

Demonstrating the impact of the higher A$ on export beef returns, indicative Australian 90CL manufacturing beef returns from the US market averaged 6% higher in US¢/lb terms in 2009-10, but when converted to A$, they averaged 11% lower. However, while averaging lower for the year, prices in the US did improve throughout the year, peaking in April, as market signals pointed to recovering demand in 2010 and low beef inventories.

Japan maintained its position as Australia's largest market in 2009-10, despite exports contracting 4%, to 349,888 tonnes swt. Combined with tighter available beef supplies, Australian beef to Japan faced increased competition from US imports (tracking 47% higher as at the end of May).

The fall for the year was primarily due to lower grassfed beef shipments, which were down year-on-year for eight consecutive months between July 2009 and February 2010, as suitable supplies of heavy finished steers remained tight. Total grassfed Australian beef exports to Japan for 2009-10 were back 6%, at 198,691 tonnes swt, while grainfed shipments were up slightly, at 151,197 tonnes swt - assisted by increased numbers of cattle on feed.

Australia's beef and veal exports to the US for the past fiscal year dropped 25% to 210,514 tonnes swt - the lowest fiscal year volume since 1996-97. This was due to tight manufacturing beef supplies, the high A$, more attractive prices elsewhere, high US cow beef supplies and sluggish US consumer demand, with recessionary conditions and very competitive prices for chicken and pigmeat.

One of the brightest markets for Australian beef in 2009-10 was Korea, with exports up 10% year-on-year, to 123,837 tonnes swt. Australian shipments had been expected to contract under increased pressure from US imports. However, robust Korean demand and a decline in domestic beef production lifted demand for Australian beef, especially chilled product.

Demonstrating the rapidly growing importance of the South East Asian region for Australian beef exports, shipments in 2009-10 were a record 131,302 tonnes swt - up 20% on the previous year and 85% above the average for the past five years. The most notable growth was to Indonesia, where exports surged 31% year-on-year, to a record 49,769 tonnes swt.

Record volumes for the period were also registered to China (up 6%, to 4,323 tonnes swt) and Hong Kong (up 56%, to 8,185 tonnes swt), while exports to Taiwan reached their highest level in seven years, at 31,758 tonnes swt.

Despite a resurgence since March, Australian beef and veal exports to Russia for 2009-10 slipped 36% year-on-year, to 23,769 tonnes swt, reflecting weak demand and tighter supplies throughout late 2009 and early 2010.

The Middle East continued to expand for Australian beef in 2009-10, with beef demand boosted by rising demand and tight supplies for other protein products. Exports for the year surged 40%, to a record 19,397 tonnes swt - with Dubai and Saudi Arabia the largest single markets.

For 2010-11, Australian beef exports are expected to benefit from slowly recovering demand, based upon the assumption of further improvement in economic conditions in the US and Japan. The A$ is likely to remain a major constraint again for exporters, while available beef supplies should improve into 2011.

Ramsay swears by beef

When you are dealing with the world's most notoriously acting chef, then your product had better be up to scratch according to a report in the Weekly Times.

That was the case for Hopkins River Beef, which as part of the Put Victoria On Your Table month, supplied Ramsay's new Melbourne restaurant, Maze, with 30 kilograms of grainfed striploin, served at the weekend.

The paper says that the Maze head chef Josh Emmett was first attracted to Hopkins River Beef, not only for its reputation of quality and consistency, but also because of its environmental credentials.

"Victorian producers work long and hard to create their produce, and it is great that restaurants are recognising this and supporting them," Hopkins River Beef's Adam North says. "Anything Gordon Ramsay endorses will generally take off and it is a real compliment we are producing beef that quality restaurants such as Maze are using."

Meat bosses get the chop

Allan Bloxsom, the man behind such pioneering projects as the National Livestock Identification System (NLIS) and Meat Standards Australia (MSA) - which now grades more than 1.2 million cattle a year - has been given the chop from Meat and Livestock Australia (MLA) says Weekly Times.

Following him out the door is MLA marketing general manager for the past 12 years David Thomason, who was responsible for the hugely successful lamb marketing program using Sam Kekovich for its Australia Day campaigns.

Bloxsom was formerly the manager of the now defunct Hereford Prime program who joined MLA in 1999 as its regional manager based in Japan, before taking up the industry systems role in 2002.

MLA managing director David Palmer announced the retrenchments and replacements last week, with Glen Feist taking over from Thomason and Michelle Gorman from Bloxsom. Palmer says the changes are about "reinvesting in the future".

VFF has a cattle beef

According to a report in the Weekly Times, falling subscriptions are costing Victoria's beef cattle producers a voice on their industry's national peak body - the Cattle Council of Australia.

Victorian Farmers Federation (VFF) livestock president Chris Nixon last week confirmed that the VFF is no longer a member of Cattle Council following a dispute to erase a debt reported to be an affiliation payment of $20,000 to the council.

Nixon told the paper that he was hopeful the protracted dispute could be settled in the near future and the Victorians get back onto the cattle industry's national agenda. Despite the debt Cattle Council is allowing VFF's Michael McCormick to attend council meetings.

Nixon says he is blaming the VFF's tight financial situation for the predicament. He is querying why fewer producers are having to pay for national representation. "We are capitalising the costs but socialising the benefits," Nixon says.

Being used and abused by US

Federal Opposition agriculture spokesman John Cobb has told the Victorian Farmers Federation annual conference in Bendigo that the US is using Australia as a back door into the lucrative Japanese and South Korean beef markets says Weekly Times.

The paper says that Cobb told the conference delegates that the Americans believe if they can get product from a BSE-affected country through Australia's quarantine screen, it will prove to the Asian market that it is safe.

He says the US "can't seriously want to export their beef here" and that "Australia is the last market they would be chasing". But he says everyone knows when it comes to quarantine "we are as tough as it gets".

Cobb says the US and Brazil, the world's two biggest beef producers, are "not within coo-ee of either our quarantine laws of the National Livestock Identification System" and that is the blanket they want to throw over their own products.

Healthy fat claims in store for beef packs

A team of UK scientists is confident that it can deliver meat containing enough healthy fat to make "source of omega-3" nutrition claims on the pack according to a report in Stock and Land.

The paper says that the scientists believe by manipulating the diets of beef cattle, the fatty acid of their carcases can be improved to meet the required standards.

The research is part of a five-year (finishing in 2012) government-backed ProBeef project, which is being co-ordinated by the Institute of Grassland and Environmental Research (IGER) at Aberystwyth in Wales.

The project is running in parallel to a larger, EU-funded ProSafeBeef project looking at microbiological and chemical contaminants in beef and beef products and innovations in beef processing and products.

Primex powering ahead

The Primex Primary Industry Exhibition will continue to go from strength to strength according to Queensland Country Life with plans to expand the sustainability awards and create an annual beef industry trade show.

Primex director Bruce Wright says the number of entries into the Primex sustainability awards doubled to 50 this year and the number of cattle breeds on show more than tripled with string crowds throughout the three days at Casino.

Wright told the paper that with the solid and reliable rains throughout the region earlier this year, there was now a positive mindset amongst landowners, which was also being reflected at the exhibition.

And while more than 1000 companies were represented at the event's trade stalls, it was the increased participation of cattle breeders and sustainable businesses that Wright highlighted as the new successes for the field event.

Glenprairie sale presses ahead

Queensland cattle baron Sir Graham McCamley will press ahead with the sale of his $80-$90 million Glenprairie Station in Central Queensland after the tragic death in April of his wife Shirley put the offering in doubt says Queensland Country Life.

McCamley told the paper that the tributes to his wife had been overwhelming and that he would honour the promise he made to her to sell the property and start to wind back his cattle interests.

"I probably need to step back a bit now," says McCamley, who wealth is estimated at $232 million by BRW magazine, built on his diversified grazing, farming and irrigation property portfolio covering more than 100,000 hectares.

"I promised Shirley I would sell it and that's what I'll end up doing but I know I will keep really busy with Tartrus (another of his cattle stations)," he says. The 46,500-hectare Glenprairie, just outside Rockhampton, is one of the largest organic cattle operations in Australia.

Thangool leucaena lets rip

The jury is still out on whether a capital outlay of around $300 per hectare to establish leucaena on shallow forest country soil will be a long-term winner says Queensland Country Life but initial plantings have buoyed Stuart Barrett's enthusiasm for further investment.

A Thangool district beef producer, Barrett hosted a recent field day to review a producer demonstration site trial, which has been co-funded by MLA and the Department of Employment, Economic Development and Innovation (DEEDI).

The paper says that the trial investigated potential production benefits and the economics of deep-ripping forest loam and deep Brigalow clay soils prior to planting leucaena-based pasture.

DEEDI senior pasture agronomist Stuart Buck and Fitzroy Basin Association field officer Joe O'Reagain co-ordinated the discussion and paddock trial inspection by 50 people with the support of other CQ BEEF Biloela group members.

Rockdale decision on hold

The nation's competition watchdog has deferred its decision on the proposed purchase of the Japanese-owned Rockdale Feedlot at Yanco in NSW by Brazilian processor JBS Swift according to The Land.

In a detailed paper released on the takeover last week, the Australian Competition and Consumer Commission has raised dozens of areas where it sees "issues" with the proposal, including the future acquisition of feeder cattle and increased market concentration.

This is despite the ACCC forming the view already that the proposed acquisition would be unlikely to result in a substantial lessening of competition in the market for the supply of processed beef.

According to the paper, ACCC said in its report on the proposed takeover that the merged entity would continue to be "competitively constrained". The ACCC began its investigation into the deal in April.

Better biosecurity

Animal biosecurity programs in NSW have been strengthened with the appointment of a new project leader in emergency preparedness and field operations NSW Primary Industries minister Steve Whan has told The Land.

Whan told the paper that Therese Wright will work from the Industry and Investment NSW head office in Orange as part of the effort to ensure NSW is properly prepared for any biosecurity emergencies.

He says that this position will also work with private and public veterinarians across NSW to ensure they are aware of potential exotic diseases, the associated symptoms and how to report any suspect outbreaks.

Therese Wright has a comprehensive knowledge of animal diseases and pests gained through more than 20 years experience in diagnosing, treating and managing animals both as a private vet and as a government veterinary officer.

Rabbit numbers to rise with rain

Farmers are being urged to keep an eye on rabbit numbers, with populations set to increase over the next few months, further adding pressure on pasture feed, and crops, along with kangaroos and mice plagues says Stock Journal.

Lower Eyre Peninsula resource management officer Rachel Stringer says while there has not been a huge increase in rabbits compared with previous years, strong seasonal conditions meant the numbers of pests such as rabbits and foxes had risen.

Stringer says rabbit numbers are expected to boom over the next few months, as they do every year, and "unfortunately some farmers wait until they see lots of rabbits before they try to implement control methods".

She says with rabbit numbers usually higher in coastal regions, grazing may prove the lesser of two evils n those areas to cropping and says farmers cannot depend on bio-controls unless they back them up with their own programs.

Private buyer eyes Naracoorte yards

Naracoorte Regional Livestock Exchange - which currently turns over $150 milling annually - may be about to become South Australia's second privately-owned saleyards according to a report in the Stock Journal.

The paper reports that a large agribusiness company has made an approach to Naracoorte Lucindale Council about the potential sale - or long-term lease - of the facilities, which have not lifted their rates for three years.

Mount Compass is the State's only privately owned yards, built around 20 years ago by ProStock agent Kym Endersby, although the SA Livestock Exchange at Dublin is owned by a consortium of stock agent firms and private investors.

South-East agents and producers fear a change of ownership may produce a hike in yard fees for vendors, but the council has been quick to reassure all parties that no formal offer has yet been made.

MLA UPDATE

Weak Korean trading activity this week

02 July 2010

Australian beef exporters reported quiet trading to Korea this week. A seasonal weakening in beef consumption, lower Korean won and sufficient beef stocks were all mentioned by traders as factors contributing to the slower trading activity. 

Current trading conditions have subdued prices in the Korean wholesale market. The value for the majority of imported beef cuts and domestic cattle carcases decreased throughout the entire month of June (HKJM). However, market insiders are expecting beef consumption to rise slightly during the Korean summer holiday period from mid July to mid August this year, with increasing customer traffic in foodservice outlets.

The Korean won tumbled this week to 1US$/1,233KRW on Friday, as Moody's Investors Service commented that it may downgrade Spain's credit rating - increasing concern that Europe's debt crisis will impact the global economic recovery (Bloomberg).

Cattle market wrap

02 July 2010

Cattle yardings up for first half of 2010

National saleyard throughput for the first half of the year at MLA's NLRS reported markets lifted 5% compared with the same period in 2009, while numbers remained steady with the five year average.

While yardings were higher, an increased proportion returned to the paddock, with restockers keen to capitalise on the better seasonal conditions. Restocker purchases of vealer steers jumped to 47% of offerings, up from 42% in 2009, while yearling steers increased from 23% to 33%. Yearling heifer purchases by restockers increased from 14% in 2009 to 22%, while cows increased from 6% last year, to 9% in 2010. 

Numbers in Queensland were 14% higher between January and June, despite the wet conditions and flooding significantly hampering sales across central and western regions. Dalby and Toowoomba Landmark were the only markets to record lower supplies for the period, falling 3% and 13%, respectively. The largest increase was at Longreach, where offerings grew by 46% year-on-year, even though the first couple of sales for the year had to be postponed with cattle unable to be transported due to flooding. Warwick yardings increased by 22%, with much of the supply area not receiving the extensive rainfall that fell across some areas of the state.

NSW offerings increased 4% for the six months, with almost 20,000 more cattle penned. While most markets had similar yardings to the same period last year, the increase was assisted by larger numbers at Casino (up 34%). Yardings at Dubbo fell by 10% and Gunnedah 9%, with a large portion of the western supply region impacted by floodwater flowing down from the north early in the year. Furthermore, producers were also able to hold onto stock given the excellent seasonal conditions.

Victoria went against the trend, with yardings falling by 2% for the six months. The decline was despite a 12% increase at Wodonga, and the generally higher prices on offer compared with last year. After a number of years of drought, many producers did not have the cattle to offload and were keen to hang on to breeding cattle for herd rebuilding.

SA supplies improved by 10,000 head or 9% year-on-year, with Naracoorte and Mt Gambier accounting for most of the increase, while numbers at the SA LE declined by 37%. Ongoing dry conditions across much of WA resulted in throughput increasing 5%. Finished cattle were scarce, with most young cattle going to feed or back to the paddock.

WA supplies contract

Cattle throughput at MLA's NLRS reported saleyards in WA fell 29% compared with last week, as the quality of stock offered continues to be plain. Last week's rainfall did little to help improve conditions, with many producers still supplementary feeding stock.

A drop in calves offered at Muchea accounted for most of the decline in overall supplies for the week, while pastoral cattle made up a fair percentage of the yarding, with quality very mixed. Some cows offered were in very poor condition, although there was also some reasonable grown steers presented that received strong competition from live exporters. Any grainfed cattle were in strong demand from local butchers and wholesalers.

Numbers at Great Southern almost halved on last week, with most of the yarding made up of young cattle in store condition, which were purchased by either feeders or restockers. Cow prices remained steady, with a decent line of C3's selling between 136¢ and 141¢/kg lwt.

US prices decline but above year ago levels

02 July 2010

The imported beef market in the US continued to trade lower this week, despite total imported beef volumes remaining tight. The CIF indicator price for imported 90CL shed 2.5¢ on last week, to 149US¢/lb CIF, while in A$ terms the indicator gained 9.2¢, to 359.8A¢/kg FAS - largely due to the lower A$.

Despite the recent downward trend in the US imported manufacturing beef market, prices for 90CL manufacturing beef remain 16% above year ago levels. The monthly June average for imported 90CL is 20% above a year ago, and 15% up on the five year average, at 155.1US¢/lb CIF.

New Zealand (NZ) cattle production started its dramatic winter seasonal decline in mid-May and appears to be now heading below year ago levels (according to NZ weekly slaughter figures). Lower NZ production is likely to further pressure supplies available for the US market. According to US Customs Bureau data, up to 28 June 2010, US beef imports from New Zealand were 9% lower than year ago levels.

Japan demand mixed

02 July 2010

Interest in Australian beef from Japan varied this week, with some items receiving more attention than others, while overall trading was still relatively subdued. Inquiry for chilled grassfed beef has slightly improved, particularly on the back of the A$ depreciation this week.

However, Japanese buyer expectations for lower prices did not materialise, as export prices in US$ terms were maintained at a similar level to last week, possibly due to firm demand from other markets.

In the Japanese wholesale market, demand for imported beef remained slow, with some speculate that the market may have bottomed out. Chilled grassfed fullset prices increased 10 yen/kg week-on-week to 735 yen/kg this week - the first rise since April.

Chinese beef imports jump 30%

02 July 2010

Chinese beef imports jumped 30% year-on-year during the first five months of 2010 to a record 5,696 tonnes swt, according to official statistics from the Chinese Customs Bureau. Driving the increase was the continued strong demand for beef in China, with higher imports of both New Zealand and Uruguayan beef more than offsetting falls from Australia and Brazil.

Impacted by reduced production during the first quarter of 2010, Australia's imported beef market share in China decreased to 26%. Australia remained the dominant supplier of chilled loin cuts to China during the period, despite the tighter supplies and high A$ pushing chilled prices 46% higher on last year, to average A$21.23/kg.

Imports of Brazilian beef, influenced by reduced supplies and stronger competition from other markets, fell 27% year-on-year, to only 261 tonnes - making up 5% of total imports between January and May.

During 2010, Uruguay has emerged as the dominant frozen beef supplier to China. Beef imports from Uruguay for the five months trebled on the same period in 2009, to 2,780 tonnes swt - making up 49% of total imports. China also imported 30% more beef from New Zealand during the period (1,155 tonnes swt).

Beef exports up 6% in June

02 July 2010

Australian beef and veal exports for June increased 6% year-on-year, with higher shipments to the US, Korea, Indonesia, Taiwan and Russia helping to offset a decline to Japan. Exports for the month totalled 87,212 tonnes swt - the highest monthly total since March last year, as increased production throughout May and early June facilitated a rise in shipments.

Reflecting relatively strong Korean consumer beef demand, combined with reduced domestic production, Australian beef exports to Korea were a record for June, at 12,109 tonnes swt. Korea has exceeded expectations during the first half of 2010, with shipments up 17% year-on-year, even though competition from the US has increased.

Weak market conditions in Japan had Australian beef and veal exports for June back 14% year-on-year, to 27,691 tonnes swt. Japanese beef demand is seasonally sluggish throughout June, while beef inventories are reportedly adequate.

Shipments to the US jumped 12% year-on-year, to 24,434 tonnes swt, partly assisted by the lower A$. So far in 2010, exports to the US have contracted 28% year-on-year, to 105,762 tonnes swt.

Exports to Taiwan reached their highest level since December 1998, at 4,058 tonnes swt during June, while shipments to Indonesia totalled 4,316 tonne swt - up 12% on the same period last year. Russia also continued to take steady volumes of Australian beef, with 3,518 tonnes swt shipped in June - taking exports for the first six months of 2010 to over 15,000 tonnes swt, up 149% on 2009.

Little direction in winter livestock markets

02 July 2010

There has been few changes in livestock markets in recent weeks, with lambs and sheep still close to winter highs, and the normal winter cattle price rises on hold for now. 

There was a 14% fall in cattle yardings this week, following significant declines in numbers in all southern states. This helped to hold the Eastern Young Cattle Indicator and national trade indicator 1¢/kg cwt either side of last week's rates.

Any resumption of the winter price rises for cattle is dependent on the A$ stabilising (or declining) and a pick up in Japan and US buying. While demand from Korea, Russia and South East Asia is strong, and the domestic market holding, demand has been weaker from our two largest export markets, Japan and the US.

Japan is currently in its wet summer season, a period of lowest beef demand, with buying likely to improve from July/August (particularly given current low stocks).

The US beef market remains constrained by fears of a further demand downturn in the second half of this year and continuing high beef cow kills - despite one of the best seasons ever. US cattle and beef prices are still expected to rise over the second half of the year, providing the US doesn't suffer a second recession.

The big question for near-term lamb prices is the timing and extent of the expected early new season lamb flush in NSW, particularly on trade and heavy lamb values. The top season in many areas has resulted in many sucker lambs being 2-4 weeks ahead of normal.

Uruguay chases up the herd

02 July 2010

The Uruguayan Ministry of Livestock, Agriculture and Fisheries (MGAP) is supporting producers and the cattle supply chain in moving towards the complete implementation of Uruguay's cattle traceability system. With the objective of reaching full traceability by 2011, the government is currently aiming at overcoming issues regarding documentation (El agro).

Since September 2006, the Uruguayan government has required mandatory identification of all new born cattle, starting from the first movement, or within six months of birth. The governments' initial objective was to have the entire cattle herd in the system by April 2010 but, given delays in the uptake, the due date has been extended until 1 July, 2011.

The traceability system, which began in 2003 as a tool to aid the control of disease outbreaks and assist in the opening of new markets, is now the most advanced traceability system in South America. It includes full electronic individual animal identification, including information such as location, movements, breed, sex and treatments (INAC).

Uruguayan cattle industry faces supply concerns

02 July 2010

The Uruguayan meatpacking industry has become increasingly anxious about the high female cattle slaughter levels recorded during the past two years, with concerns as to how it will impact beef production moving forward.

Uruguayan cattle slaughter rates increased in both 2008 and 2009, mainly the result of a severe drought that hit eastern South America - which also resulted in the loss of a large number of calves. Assisting the higher female cattle slaughter levels of recent years was also the need for producers to maintain cash flows, enticed by periods of strong cattle prices.

The Uruguayan Meatpacking Industry Association forecasts a drop in cattle supplies for 2011, which will impact export volumes.

Economic growth to spur Korean meat demand

01 July 2010

Demand for feed corn in South Korea, the world's third largest corn buyer, is expected to increase 5% in 2010, as the continued economic recovery boosts meat consumption, according to Nonghyup Feed Inc. (Bloomberg).

A spokesperson from Nongyup stated that Korean demand for livestock products is very sensitive to household incomes. It is expected that income improvements throughout the second half of 2010 will flow through to meat demand. The South Korean government revised its Gross Domestic Production (GDP) outlook for 2010 to 5.8% - compared to 5% earlier in the year, boosted by surging exports and strong domestic demand (Bloomberg).

The rebuilding of Korea's cattle herd became increasingly evident early in 2010, with an 8% year-on-year rise in cattle numbers during the first quarter of the year, to 2.7 million head. Increased production in previous year, especially in 2008 and 2009, impacted the number of cattle available for slaughter in early 2010, with slaughter levels falling 12% for the first four month of 2010. During the same period, Korean beef imports from Australia, US, New Zealand and Mexico increased by 16% (KITA).

US gearing up presence in Japan

01 July 2010

Japanese imports of US beef continue to expand, as the US Meat Export Federation (USMEF) gears up another marketing campaign in order to regain market share they lost after the BSE outbreak in December 2003.

Japan imported 36,082 tonnes swt of beef in May, up 12% compared with the same period last year, however import volumes in May 2009 were particularly low given the very uncertain economic and beef demand outlook. Imports from Australia grew 2% year-on-year, to 25,357 tonnes, while US shipments increased 34% year-on-year, to 6,131 tonnes - but still only 30% of pre-2003 BSE levels.

Beef imports from the US are expected to increase further in coming months, boosted by higher production, with the USMEF promotions expected to get into full-swing during this period. Its recent marketing activities include American beef cooking seminars for popular female 'bloggers' (owners of highly accessed websites), "Lunch box boys" recipes by young males, and a gift campaign to win 100kg of US beef (promoted under a theme "Unexpectedly healthy, American Beef").

Japan maintains the bi-lateral import protocols with US that all beef must be sourced from cattle less than 21 months of age, with Specified Risk Materials (SRMs) removed. Despite ongoing pressures from the US to relax the regulations, there have been no further reports to confirm the progress of beef import negotiations, since two countries last met for discussions in April.

Live exports to fall in 2010-11: ABARE

01 July 2010

Australian live cattle exports are tipped to fall 6% for the 2010-11 fiscal year, to 850,000 head, after reaching 906,000 head in the current 2009-10 year. The 6% decline will be largely due to a 17% fall in numbers to Indonesia, Australia's largest market, although rising exports to the Middle East and the rest of south-east Asia will slightly offset the decline, according to ABARE's recent release Australian Commodities June quarter 2010.

Indonesian demand has been the main driving force behind the growth in live cattle exports in recent years, with numbers almost doubling to over 700,000 head for the five years to 2008-09 (ABS). Over the same period, beef and veal exports to Indonesia have grown, rising from 8,748 tonnes swt to 38,089 tonnes in 2008/09 (DAFF).

The growth in shipments to Indonesia in recent years has been facilitated by the expansion of the Indonesian feedlot industry, which typically finishes Australian cattle for slaughter.

However, ABARE noted concerns that live export numbers to Indonesia may have peaked for the short term, with Indonesian authorities limiting permits and enforcing a 350kg maximum weight limit on all live cattle that enter the country. Some herd rebuilding in northern Australia following a return to better seasons is also expected to limit the availability of suitable cattle for the live trade.

Japan FMD ceasing

01 July 2010

The containment of foot-and-mouth disease (FMD) is progressing in Japan, with movement restrictions in the infected areas gradually being removed.

The unprecedented FMD outbreak in the Miyazaki prefecture has seen almost 200,000 cattle and pigs culled since 20 April, 2010. This has resulted in significant damage to the local livestock industry, as well halting Japan's Wagyu beef exports (due to a self-imposed export ban of beef products). The export ban is still in place, except to Hong Kong and Macao.

Japan's Shokuniku Sokuho has reported that the entire Miyazaki prefecture will become restriction free on 16 July, provided there is no further FMD case reported. The last case was found on 18 June.

In 2009, Miyazaki was the third largest prefecture for beef cattle in Japan, supplying approximately 15% of all Japanese black Wagyu calves to feeders nationwide. There has been no evidence so far to confirm that the outbreak has affected beef consumption, or beef supplies in Japan.

Beefing up the Cats

Friday night's game notwithstanding, according to a report in the Weekly Times it is official - red meat (and lots of it) is the food of Australia's champion AFL team.

The paper says that the private chef to the Geelong Football Club, Adrian Millman, has revealed the secret to success for the top-of-the-table club is a protein-based diet high in beef.

Millman says the club has done away with fancy nutrition plans and reverted to "simple food" and that the players eat a lot of protein, especially during recovery and after training.

Typically, fillet and porterhouse steaks of 250-300 grams are served at lunch and dinner and Millman sources all his produce fresh and makes his own mince, soups and casseroles to minimise waste as he prepared three meals a day, six days a week for the players and officials.

Indonesia deals a heavy blow

Problems with Australia's biggest live export market for cattle could change the supply dynamics of slaughter beef in the north - and put some pressure on southern markets according to the Weekly Times.

Indonesia, which accounted for a massive 81 pc of all the live cattle sold out of Australia in the past 12 months, or more than 700,000 head, is now enforcing a weight limit of 350 kilograms liveweight on all its shipments.

It has made headline new in Queensland and the NT as tyhe weight regulation - which has previously existed buty not been policed by Indonesian authorities - has stopped the flow of cows and other heavier slaughter animals being absorbed by Indonesia at healthy money.

To highlight the impact of the crackdown, Consolidated Pastoral Company, which runs 300,000 head in northern Australia, says that it will now have to find new markets for as much as 40 oc of its herd.

Heifers hit a high note

Prices for heifers at the Ballarat saleyards - both grown and weaners - last week hit a new high for the year despite another large yarding according to a report in the Weekly Times.

The paper says despite 3309 head being yarded, DJ and AL Briody's 10 Angus heifers, aged 20 months and weighing 441 kilograms, topped the heifer market at $745, or 182 cents, doing to a SA backgrounder.

While restockers looking for breeding replacements were prepared to pay between 190 cents and 200 cents a kilogram for suitable heifers, buyers planning to finish them on either grain or grass would only go to 180-190 cents.

Younger spring drop steers were very affordable, even though prices are still five cents up on last month's Ballarat sale, but competition was fierce for grown steers - particuarly those weighing more than 400 kilograms - and they sold to a top of $1000.

Tropicals crank up production

In its earliest days, tropical pasture proved a risky business as its fluffy seeds did not flow through the seeders easily, leading to patchy germination according to a report in The Land.

However, the paper says that the creation of the "seed pellett" has changed all of this, with tropical pastures now doubling, and in some cases trebling, its dry matter production potential.

Heritage Seeds state manager Adrian Driden says the uptake of tropical pastures has increased dramatically during the past few years when only 10 years ago people who were dabbling in them were "considered eccentric".

However, since the development of a lime coating, which also contains nutrients, fungicides, and insecticides, forming the "seed pellet" their success through conventional sewing equipment has given them a new lease of life.

Dollar makes trading a little easier

An improvement in the supply of cattle and the lower Australian dollar have certainly made trading a little easier for lotfeeders in the first three months of this year according to a report in The Land.

While the Australian Lot Feeders Association (ALFA) figures for the number of cattle on feed for the second quarter are still a few weeks away, there are indications there were more feedlot-suitable cattle being offered at saleyards and direct from the paddocks.

But, surprisingly, the paper says that has not led to cheaper prices for cattle entering feedlots and while there have been a few peaks and troughs, the general trend since January has been steadily dearer

The price did dip towards the end of the autumn, as there were bigger supplies of unfinished stock entering the market as the weather cooled off, and some areas of the State became more desperate for rain, but by early June the prices were climbing again.

Slow demand

A national Rural Press report says that demand from Japan for Australian beef was slow last week as the market enters the rainy season according to Meat and Livestock Australia.

Overall meat consumption tends to ease during the period, before picking up again with the arrivals of the Japanese summer holiday season - which runs from mid July to the end of August.

MLA reported that export prices to Japan last week varied as well, but says that the appreciation of the Australian dollar actually reduced overall returns to Australian beef exporters.

Australian chilled grassfed prices were soft across the board in the Japanese wholesale market last week, particularly striploin, which was down eight pc but US beef prices were mostly firm, although demand was sluggish.

Yard fees soar at Warrnambool

Warrnambool saleyard fees will soar almost 50 pc to help pay for its upgrades after the city council's 2010-2011 budget was approved last week according to a report in the Stock and Land.

 The cattle yard dues change from September 1 and will include a four pc consumer price index increase over the previous financial year's costs - plus an extra $3 a head on prime, store and dairy cattle, raising their fees to $11.30, $10.10 and $12.45 a head respectively

The agents have not escaped the 48 pc increase either according to the paper - their fees will jump $4500 for each of the five agents using the Caramut Road saleyards - raising a total of $22,500.

Warrnambool stock agents failed in an attempt to negotiate a more moderate increase closer to the CPI, despite suggesting necessary upgrades could be limited to $505,000 over the next two years and that the money needed to be borrowed to fund the capital works.

Rangers Valley feedlot moves to EU accreditation

Within the space of a month, Rangers Valley feedlot, at Glen Innes, hopes to have completed its value-adding European Union (EU) accreditation process according to a report in the Stock and Land.

The paper says that this will see the feedlot begin acquiring EU-accredited cattle to go into its 300-day grain feeding regime, specifically aimed at being onsold as part of the Australian and American 20,000 tonnes EU beef quota.

Rangers Valley sales and marketing manager Leith Tilley says because of the operation's feeding process, it is important that they get their cattle in as soon as they can.

Initial estimates from the feedlot suggested that cattle purchased specifically for the EU quota will total between five and 10 pc of monthly buying - or about 250 head - to make the program worthwhile.

Strong BeefEx support

A report in Stock and Land says the positive signs of rebuilding feedlot numbers have lifted expectations of a strong attendance at the grainfed beef industry's biennial BeefEx conference, which will be staged in October.

Registrations opened strongly a few weeks ago and the Australian Lot Feeders Association events committee says that its expects conference spaces to fill rapidly, despite the event still being some months away.

All 300 rooms at the five-star Royal Pines resort on the Gold Coast have been reserved but industry stakeholders planning to attend are still being advised to book early to avoid the inconvenience of being shuttled from outside accommodation venues should the "no vacancy" signs go up.

ALFA's BeefEx events committee chair Gina Lincoln told the paper that her team has aimed to develop a program to reach a broad range of stakeholders, ensuring content is relevant and appropriate irrespective of the size and scale of the feedlot or supporting industry members attending the event.

2020 vision for feedlot industry

A previous Meat Research Corporation (MRC) project - M.544 input requirements for the cattle feedlot industry - has highlighted the managerial and economic benefits of stratification and differentiation of livestock production activities says Stock and Land.

Since that time the paper says that a number of Australian beef industry operators have adopted and benefited from this strategy, turning cattle off breeding areas at an earlier age and transferring them into the feedlot production system. 

The feedlot sector believes that if the industry-wide benefits of these strategies could be demonstrated and quantified, the pace of beef industry structural change would be accelerated, accruing benefits to all sectors of the industry.

Project B.FLT.0132 - A 2020 vision for the Australian feedlot industry - was designed to evaluate and demonstrate the economic, environmental and social benefits of these feedlot industry development strategies going forward to the year 2020.

Avoid liver fluke with early action

Producers thinking about delaying the treatment of their herds for liver fluke following the relatively mild autumn should seriously be rethinking their strategies according to a report in the Stock and Land.

The paper says that beef cattle infected with the liver fluke show lower growth rates and lower feed conversion rates while it causes infected dairy cattle to produce less milk - and milk of a lower quality.

The young flukes penetrate the liver capsule and migrate through the liver tissue for up to six or seven weeks before entering the bile ducts to become adult flukes and resulting damage can cause anaemia, lowered appetite, in some cases bottle jaw and at worst, death.

Animals suffering from acute liver fluke disease may not show any obvious symptoms, making it even more important to treat the most susceptible stock and NSW DPI vet/state worm controller Stephen Love says if your farm is in a fluke-prone area such as eastern NSW and Victoria, chances of infection are high.

Sassafras to Surry Hills

Sassafras, Tasmania, beef farmer Kel Sharman was astonished to learn that meat from a beast he sold for $5 a kilogram was now on sale at a butcher shop in inner Sydney for $69 a kilogram says a report in Stock and Land.

Responding to contact from Sydney Morning Herald journalists tracing the origins of a basket of food products sold in Sydney, Sharman said: "You are joking. I'm in the wrong line of business."

Every piece of meat sold in Australian can, theoretically, be identified and traced back to its source paddock, with the barcode on its packaging linked to the NLIS ear tag fitted when each calf is born.

But in practice tracing meat to its source can be difficult says the paper because of the complex and often disjointed relationship from the retail shelves to the farm, via the abattoir, transport, storage and distribution companies - but in the case of Mr Sharman it showed how effective it can be.

Agents given 'killer' insight

A report in the Stock and Land says that 45 independent stock agents, drawn from four states, took part in an educational paddock-to-plate workshop at the MC Herd abattoir in Geelong last week.

Hailing predominantly from the livestock-rich Green Triangle area of western Victoria and southeast South Australia, the group was schooled on a range of issues including the importance of networking, committing to an agent code of practice and forming strong alliances with processors.

Organised by Rural markets Agents (RMA), a network of independents, the two-day event got participants out of their comfort zones of live animal assessments in saleyards and on-farm and looking at carcases much in the way processors do.

The paper says the MC Herd livestock manager Nigel Vince told the gathering of mostly young agents that equipment, machinery and the ethics of the company's Bacchus Marsh Rd workforce had come a long way in the 28 years he had been with the company.

Egypt shipment eases trade deadlock

A large shipment of heavy feeder cattle, which has sailed from Townsville for Egypt, is providing a crucial pressure valve for northern Australia's live export industry says Queensland Country Life following recent bans enforced by Indonesia on cattle above 320 kilogram.

The paper reports that the Wellard-owned vessel Ocean Shearer set sail after loading 17,300 bos Indicus-derived cattle, mostly steers and most significantly with an average liveweight that was above 400 kilograms.

The Townsville consignment is only the second to leave Australia for Egypt following a three-year market exclusion due to animal welfare concerns and one of the key attractions of the reviving Egyptian trade is that market will take steers up to 450 kilograms.

Even though Egypt is less receptive to females, at least half of the current shipment was made up of cattle which had been defaulted out of an earlier Indonesian order due to the ongoing import permit access issues.

Community rallies for local selling centre

Producers, livestock agents and community members from across the South Burnett have staged a supporters' rally tom highlight the central role of the Coolabunia saleyards in the South Burnett economy says a report in Queensland Country Life.

The paper says that the South Burnett Regional Council is reviewing the facility amid concerns for the workplace health and safety standards - as well as the associated costs required to upgrade the facility.

An independent feasibility study of the saleyards has been commissioned by the council, and it is expected this will be handed down following the release of the council's June budget.

Supporters of the saleyards says they fear that high maintenance costs could result in the closure of the facility, which they also say would impact on the district's business community and place added transport costs on small producers forced to sell cattle at yards further afield.

NQ market update

Meat and Livestock Australia (MLA) reports an exceptional 2009-10 wet season is providing the northern half of Queensland with some of the best seasonal conditions in decades heading into winter, with reports of ample feed and water supplies across a vast expanse says Queensland Country Life.

Recent weeks have seen some strong yardings at Longreach, with good prices reflecting the overall high quality of stock presented. Year-to-date yardings are also up on the same period last year with producers hitting a lot of the desired sale weights.

The paper says they were particularly able to do this in the autumn, when the bulk of northern numbers are turned off, and while numbers were 39 pc up on the same period last year they are still a third below where they were during 2008.

The largest yarding in Longreach so far in 2010 was the second week of April, with more than 3300 head penned. More interestingly, about 40 pc fewer cattle were yarded in the second half of 2009 due to lower stocking numbers.

MLA UPDATE

Cattle market wrap

25 June 2010

Over the hooks rates ease

The recent rise in the A$ resulted in a couple of processors in Queensland and one in NSW lowering direct to works rates 5¢ to 10¢/kg cwt this week. This continued the cheaper trend registered the last three weeks.

When the A$ fell to the low US80¢ range at the end of May, processors had an improved outlook, resulting in a slight lift in prices due to increased enquiry from overseas. In the last week of May, Japan ox in the south of Queensland averaged 317¢, 306¢ in the north and 316¢/kg cwt in NSW. In the same week, cows weighing 240-280kg cwt averaged 268¢ in southern Queensland and 265¢/kg cwt in NSW. Since then, the A$ has risen gradually and been subjected to daily fluctuations.

The increased value is creating a tough trading environment, with downward pressure on prices from overseas buyers and sluggish demand. This, coupled with good supply in Queensland, wintery conditions, a lack of rainfall over the past month and the end of the financial year encouraged producers to offload. A number of processors are reporting good supplies of cattle booked in advance, with supply also expected to be boosted by cattle over 350kg lwt that are unsuitable for live export to Indonesia.

These factors have caused over the hooks rates to fall in Queensland over the past month. Japan ox are currently averaging 306¢ in the south of the state and 291¢/kg in the north. Cows weighing 240-280kg cwt are averaging 258¢ in the south and 248¢/kg in the north.

Over the same period, NSW prices have not experienced the same decline. Processors are faced with tighter supplies of quality cattle and have had to raise rates in a bid to attract better quality consignments. This week, direct to works rates were mostly cheaper on last week, averaging 316¢ for Japan ox, while cows 240-280kg averaged 268¢/kg cwt.

Supply grows

With all Monday markets held this week, numbers returned to similar levels to a fortnight ago at MLA's NLRS reported physical sales. Supply, however, was only 16% higher compared with the shortened week last week.

Yardings in most states increased, except in Queensland, where they were down due to significant falls at both Roma sales and Longreach. The other states all had increases, although there were a few less offered at certain markets.

The increase in yardings had mixed impacts on indicator grades this week, with quality once again being a factor. The Eastern Young Cattle Indicator (EYCI) fluctuated throughout the week to finish firm on last Thursday at 350.75¢/kg cwt. The trade steer indicator increased 1¢, to 191¢ and feeder steers increased 4¢, to 187¢/kg lwt.

After a rise in the A$, Japan ox slipped 6¢ to 176¢, and US cows settled 1¢ lower at 136¢/kg lwt.

A mostly dry week

25 June 2010

The week gone by was another dry one for most of rural Australia, with significant rainfall limited to isolated coastal regions. The south-east of Australia saw the most widespread rain, with the Victorian high country and western Tasmania getting some good falls. A number of weather fronts are expected to move through over the weekend, with at least one bringing strong wind and rain to the south-east, as well as snow above 1,600m.

Roma saleyard comment

25 June 2010

Seasonal conditions have been favourable during June, and although the grass has hayed off, light showers have helped to retain soil moisture. Most oat crops are looking good, particularly to the north of Roma and around Injune.

Cattle condition has benefited from the good summer and most are in very good condition. Only recently have there been plainer lines from central and north western areas.

Numbers have begun to slow at both the Roma Prime and Store sales, with fewer cattle from the south east. Prices have remained firm, and are likely to become dictated more by quality as winter progresses. Competition has been steady, with more NSW buyers present to underpin demand.

Japanese demand watered down

25 June 2010

The trade in Japan reported sluggish demand for all meats this week, largely due to the rainy season, as well as subdued spending by consumers. Japan's Cabinet Office increased their GDP forecast for this Japanese fiscal year to 2.6% (from the earlier estimate of 1.4%), however, consumers are remaining conservative and tight-budgeted for now.

Beef export trading from Australia was also slow, with limited interest from both Japan and the US easing export trimming prices this week.

The Agricultural Ministry of Japan listed the 291st case of foot-and-mouth disease (FMD) in the Miyazaki prefecture on 18 June - there has been no new case confirmed this week. Chikusan Nippo reported an increase in calf prices in the Japanese livestock market recently, probably due to the temporary closure of cattle saleyards in Kyushu and Okinawa regions due to FMD.

US market moves lower

25 June 2010

The imported 90CL manufacturing beef market in the US continued to come under pressure this week, as the price outlook for August and September points to a bearish market.

Prices for imported 90CL manufacturing beef shed 3¢ on last week, to 151.5US¢/lb CIF. Since mid-April, the imported 90CL indicator has been declining each week. Between March and May, imported prices remained at a premium to US domestic fresh 90CL trim indicators. However, historically, imported prices are usually at a discount to domestic prices at this time of year.

The imported 90CL manufacturing beef indicator this week moved to an 11¢ discount to US domestic 90CL fresh trim product.

Solid exports ahead of Korean Chuseok demand

25 June 2010

Australian beef exporters reported that both Korean beef demand and prices were solid this week. From 1 - 22 June this year, beef exports from Australia to Korea totalled 8,336 tonnes swt, with chilled beef accounting for 25% of the total.

While beef consumption is usually subdued during summer months (compared with the rest of the year), some Korean beef importers have started to boost their stocks in preparation for Korea's Chuseok (Harvest Festival) celebrations on 22 September.

According to market sources, numerous retail chains are currently promoting chicken due to seasonal demand, and the current FIFA World Cup held in South Africa. The Joong Ang Daily has also reported that large discount stores, including E-mart, Homeplus and Lotte Mart are stocking fried chicken, as demand has soared on days that World Cup matches are held.

Brazilian exports to rise in 2010

24 June 2010

Brazilian beef exports are forecast to increase 6% to 1.7 million tonnes cwt in the 2010 calendar year, according to local consultant AgraFNP's annual publication Anualpec 2010.

The rise in exports will be backed by a 2% rise in total beef production to 7.778 million tonnes cwt and a lower 1% rise in domestic beef consumption to 6.104 million tonnes cwt.

The herd is expected to continue to recover since 2007's low, and increase 2% in 2010 to 176.6 million head.

US cattle placed into feedlots surge

24 June 2010

Cattle placed into US feedlots rose for the third consecutive month, up 23%, to 2.022 million head during May (United States Department of Agriculture). The extent of the increase is in line with US analysts' expectations, with a number of factors supporting the surge in placements.

Improved pasture conditions earlier in the year meant US producers kept feeder cattle on grass for longer, feedlots have been anxious to start rebuilding feedlot inventories following lower placements earlier in the year and currently lower feed costs.

Larger placements over the past three months have not impacted US fed cattle prices, with the Choice beef cutout indicator currently 9% above year ago values. While Steiner Consulting Group is forecasting the Choice beef cutout indicator to ease from current levels heading into August (given the higher placements), the average forecast for August of 151US¢/lb is still 6% above year ago values and 4% above the five-year average.

US analysts are expecting placements to slow over coming months due to US summer grazing cattle not likely to be available till the US autumn months.

Japan foodservice valued at A$400 billion

24 June 2010

In 2009, the estimated value of the Japanese foodservice sector declined 1.8% year-on-year to 29.5 trillion yen (A$400.4 billion), according to data released by Foodservice Industry Research Institute of Japan.

Industry sales peaked in 1998 at 32.9 trillion yen (A$399.8 billion), but have trended down since, due to a fall in private and business expenditure for dining out. In 2009, sales values of most foodservice categories declined year-on-year, with the exception of fast food, school meals, hospitals, and take away food.

The Japan Foodservice Association forecasts continuing demand in take away/cooked meal services, on the back of an increase in smaller households and an aging population. It also anticipates consumers' ongoing interest in healthy food and a balanced diet.

Brazil targets Middle East

24 June 2010

Brazilian beef exports during the fiscal year to May remained stable, decreasing only 0.5% year-on-year to 861,631 tonnes swt, mainly supported by increased demand from the Middle East and Northern African region. Brazilian exports to this region increased 14% to 350,578 tonnes swt over the period. In contrast, exports to the CIS fell 13% to 285,521 tonnes swt year-on-year.

The increased trade with the Middle East and Northern Africa has been driven by booming exports to Iran, with a record 18,094 tonnes swt in May (Brazilian frozen stewing cuts have a strong retail presence in this market), in addition to increased volumes to Egypt, Lebanon, Saudi Arabia, and Algeria among others.

Brazilian beef presence in the region has increased in recent years mainly as a result of rising demand, the suitability of Brazilian product for the Middle Eastern and North African consumer, government lobbying, in addition to the strong brand positioning of Brazilian chicken in these countries (during the fiscal year to May, Brazilian chicken exports to this region grew 17% year-on-year to 1.3 million tonnes and accounted for 43% of total Brazilian chicken exports).

Australian consumer confidence gains

24 June 2010

Australian consumer confidence increased 6 points in a week to 123.6 points on the weekend 20 June 2010 - days before Prime Minister Kevin Rudd was replaced by Deputy Prime Minister Julia Gillard. The weekly consumer confidence index was also 9.7 points higher than the same time last year, according to Roy Morgan.

Contributing to the increase in consumer sentiment was a four percentage point rise in the proportion of Australians (to 30%) stating that their family is 'better off financially' compared with a year ago, and 41% (up four percentage points) saying they expect their family to be 'better off financially' in a year's time.

There also was a strong rise in buying sentiment, with 58% (up 2 percentage points) of Australians saying now is a 'good time to buy' major household items - the highest since mid January.

NZ beef exports on the rise

24 June 2010

New Zealand beef and veal exports totalled 47,125 tonnes swt in May 2010, 6% higher than a year earlier, with exports increasing to most Asian markets. Similar to Australia, the value of the NZ$ fluctuated significantly during the past month, leaving many importers very cautious, with the NZ$ trading in a band between US66-74¢. (Reserve Bank of New Zealand).

Beef and veal exports for the period January through May were up 3% on the same period last year, at 194,420 tonnes swt. Shipments to the US - which typically account for close to half of all NZ beef and veal exports - have been fairly constant on 2009 levels, totalling 92,874 tonnes swt.

Shipments fluctuated to other markets, with a large drop in volumes to Canada (back 37% to 11,856 tonnes swt) largely offset by a 16% rise to Japan (15,714 tonnes swt), a 23% lift to Korea (17,733 tonnes swt) and a 45% increase to South East Asia (25,997 tonnes swt) (NZ Meat Board).

NZ adult cattle slaughter for the first four months of 2010 was running at 3% higher than a year earlier, at 1.05 million head, with 3% less cows, but 13% more steers and 3% more bulls coming forward. This change in composition along with the better season has helped increase average carcass weights, with production up 7% to 272,224 tonnes cwt for the same period (Statistics NZ).

Surge in Argentinean beef to the EU

24 June 2010

Argentinean beef exports during May were up 27% on April, to 8,704 tonnes swt. However, the surge for the month comes mainly as a result of the 133% increase in "Hilton" High Quality Beef (HQB) exports to the EU, to 3,399 tonnes swt.

Argentinean exporters have rushed to try and complete their respective shares of the 2009-10 quota - with a rising number of shipments being air freighted in June. In contrast, total beef exports remain 64% lower year-on-year.

The urgency comes as a result of the delay in the distribution of the HQB quota among local exporters by the Argentinean government (which allowed HQB shipments of the 2009-10 period to start only in November), in addition to the tightening of export restrictions, given the fall in local Argentinean supplies.

The local industry estimates that only 18,000 tonnes will be shipped out of the total 28,000 tonne HQB quota for the 2009-10 fiscal year.

In addition to the reduced supplies for the EU, European importers have advised Argentinean suppliers they will be applying discounted quotes for their products. As well, a number of major EU importers are evaluating with EU authorities over taking the responsibility of distributing Argentina's quota among exporters (instead of the Argentinean government) to secure a more reliable distribution and supplies (Infocampo)

Bargain period ends in Brazil

24 June 2010

Brazilian steer prices are expected to recover and increase over the medium term, similar to those rises experienced between 2006 and mid 2008, when prices surged as a result of higher demand and tighter steer supplies (Scot Consultoria).

Brazilian live steer prices have been suppressed in recent months, due to a number of factors, including very competitive chicken prices and a reluctance from meatpackers (affected by the rapid appreciation of the real since the global financial crisis) to pass higher prices back to producers.

The positive price outlook for grown cattle in Brazil comes as a result of the current imbalance between restocker and grown cattle prices. Prices for young cattle categories have largely surpassed the average grown steer price premium since early 2008.

The disparity in prices is largely due to a lack of cattle, the result of the 2005-2007 liquidation when a high percentage of female cattle were sent to slaughter, at the same time exports boomed and steer supplies tightened.

The recovery in beef exports since October 2009, assisted by the opening of new markets for Brazilian beef, combined with rapid growth in the local consumers' purchasing power is expected to result in a strong pull through for cattle prices from the demand side.

Beef exports to South Asia improve

24 June 2010

Australian beef exports to South East Asia and Greater China during May increased 13% from April to 10,172 tonnes swt. May shipments remained 2% lower compared with May 2009, affected by falls in exports to Indonesia, China, Hong Kong, Singapore and Thailand. Meanwhile, trade to Taiwan, Philippines and Malaysia continued an upward trend.

Over the calendar year to May, beef exports to South East Asia and Greater China decreased 3% on a year ago, to 44,954 tonnes swt, after being affected by tight supplies earlier this year. Manufacturing beef remained the most popular cut exported to the region during the period, with total shipments staying at 15,325 tonnes swt.

Shin shank, the second most popular cut to South East Asia and Greater China increased 6% year-on-year during January to May, to 8,218 tonnes swt, due entirely to strong enquiries from Taiwan and mainland China.

Beef blade shipments fell 18% on last year to 3,440 tonnes swt, although remained the third popular cut shipped to the region - competition from South Korea for blade/clod affected consignments to Indonesia, Malaysia and Singapore.

Looking ahead, beef exports to South East Asia and Greater China is expected to continue to face competition from other Australian markets, including Russia, although improved supply and the stabilised A$ may facilitate trade to the region.

Brazilian beef exports to South Asia retreat

24 June 2010

Brazilian beef exports to South East Asia and Greater China during January to May fell 15% compared with the same period in 2009, to 47,479 tonnes swt, as beef supplies remained tight in Brazil. Shipments of Brazilian beef to all markets in the region dropped during the first five months of 2009, with the exception of the Philippines, where better economic conditions boosted demand for beef.

Meanwhile, New Zealand beef exports to South East Asia and Greater China during January to May continued at record levels, up 21% year-on-year, to 40,343 tonnes swt - largely due to an increase in trade to Indonesia and Philippines.

US beef shipments to the region also jumped 34% during the five months to May, to 42,953 tonnes cwt, with the rise largely reflecting stronger demand and the lower value of the US dollar.

Australian beef exports to South East Asia and Greater China for the same five month period declined 3% on the previous year, to 44,954 tonnes swt, with subdued supplies early in the year impacting shipments.

Stock condition ‘key standards'

Farmers who present stock in poor condition may be prevented from loading them by transporters under new national animal welfare livestock standards and guidelines being developed, says Stock Journal.

The paper says that this was one of the key issues raised at last week's Livestock Transporters Association of SA conference in Adelaide, which attracted more than 100 industry leaders.

The guidelines are expected to be finalised and enforceable by the end of next year and from then on if transporters are not satisfied with the condition of animals they could be legally required to refuse loading.

Department of Environment and Heritage's Deb Kelly and PIRSA's Mark Peters outlined the development of the new national Animal Welfare Standards and Guidelines at the conference.

Microbial profiling takes huge step forward

Stock Journal reports a SARDI project has successfully developed a range of microbial profiling techniques to investigate gut bacteria, archaea (methanogens), fungi and protozoa in ruminants.

Researcher Dr Valerie Torok says these interim successes have produced tools which are now being used in collaborative projects which will investigate the influence of feed and genetics on methane production.

The project started in April last year and is due to report in December next year and is targeting DNA-based microbial profiling to assist the research team to rapidly evaluate feeding, breeding and management strategies in an effort to reduce methane production in ruminant systems.

Dr Torok says that the next step in the project will be to compare differences in microbial populations between animals shown to produce high and low levels of methane gases. Details at http://www.sardi.sa.gov.au/.

Beef heats up

Trade cattle prices could be in for a rough ride in the next few months according to a report in The Land, amid speculation the Eastern Young Cattle Indicator (EYCI) could be headed for a new record peak this winter.

The paper says that trade steers remained in limited supply during the past week, with the traditional winter shortage only putting further pressure on prices, forcing young cattle up another 0.75 cents a kilogram (carcase weight) to 350 cents.

Current prices are about 18 cents a kilogram higher than they were at the same time last year, leading some industry analysts to speculate the EYCI could reach a new winter high.

Meat and Livestock Australia's chief market analyst Tim McCrae says average monthly prices for the past eight years increased by nine to 11 pc between May and August and with the possibility of a lower Australian dollar and rising export demand prices may even outstrip the normal increase.

Ripe sale for Braidwood

Southern Tablelands beef cattle producer Ray Hall thinks the young cattle market's "mini boom" could stick around - for a while at least according to a report in the Weekly Times.

Hall has told the paper that he has been scaling back breeder numbers at his Braidwood Cattle Company property by about 40 pc to about 1200 head and ramped up trading of mixed breed steers.

While he isn't ruling out rebuilding breeder numbers if the season allows, in the current climate he is more than happy to reap the benefits from selling young steers direct into the feedlots.

He says they were "ripe" for offloading at 400 to 500 kilograms, and has about 400 young steers almost ready to go and "relative to the prime cattle market trade steers are going well and I am impressed with the prices".

Foreign buyers set to swoop

A rush of foreign investment interest in Australian farmland is stirring new concerns about just how much overseas ownership of local agricultural resources is too much according to a report in The Land.

Unease about global food shortages in the next 20 years - and long-term agricultural market opportunities - has made Australia and areas of South America prized targets for foreign government-aided enterprises and private sector groups.

That paper says that Africa has also been the focus of a significant land grab, particularly by overseas government-owned investment corporations from China and the Middle East.

Last week the Foreign Investment Review Board told a Senate hearing it was possible for offshore owners to gradually buy whole districts without any government scrutiny. The FIRB will also only be notified of any agricultural land sales if their individual value exceeds $231 million.

Agri benchmark

Both beef producers and researchers have the chance to achieve an insight into how Australian beef production systems compare with global competitors at a special Industry and Investment NSW (I and I) forum this Friday (June 25) according to a report in The Land.

The agri benchmark forum, which the paper says will be held in Brisbane, will present a detailed account of how the Australian beef sector is coping after the global financial downturn, and how it fits into the worldwide market.

I and I beef expert Kirrily Pollock, Armidale, says producers, beef economists and advisers from 16 countries will be participating in the conference, which she says taking into account Australia's dependence on export markets is a bonus.

Pollock says that by coming together the wider industry is looking to unlock the drivers of beef competitiveness and profitability by comparing the performance of beef industries across the globe. Details from http://www.agribenchmark.org/.

Win a $12,000 study tour

Beef, sheep and dairy producers are being offered the chance to win a $12,000 overseas study tour as part of a new initiative to recognise and reward good animal health and livestock management practices says The Land.

Animal health product manufacturer Virbac Australia has last week launched its search to find three national winners from the beef, sheep and dairy industries for its inaugural Proud Achiever awards.

Entrants can nominate themselves, or candidates may be recommended by friends, neighbours, farm product suppliers or livestock sector professionals who consider them a good example of animal health and husbandry success.

The national winners will be able to choose their own overseas study agenda, which may include an agricultural tour, an international conference or visiting specific enterprises or research facilities. Details at http://www.proudachievers.com.au/.

Korean delegates' beefed-up tour

For the second time delegates from a major South Korean supermarket chain - GS Retail - saw Australian beef production up close and personal last week according to a report in The Land.

The return visit follows the inaugural tour jointly organised by GS Retail officials and Cargill Australia, and they have been designed to further promote business ventures between the two countries.

The paper says that the most recent trip enabled 12 GS Retail shop managers to see the entire process which goes into producing the meat that they are currently selling through their stores.

This included a visit to Cargill's Jindalee feedlot and an on-farm visit to a beef production and Border Leicester stud at Wagga Wagga. GS Retail has 158 stores in Korea - with plan to expand to 200 by the end of next year.

Grain claim grassed

That ongoing industry debate that grainfed beef does taste better than its grassfed counterpart have been slammed by a prominent Melbourne chef according to a report in the Weekly Times.

The paper says that a Texas, US, study (funded by the National Cattlemen's Beef Association) released last week claimed that meat from grainfed animals was "more healthful" than the beef produced by traditionally grassfed animals.

But chef Adrian Richardson, who runs the La Luna restaurant in Carlton North, and exclusively uses grassfed beef, as well as rare-breed pigs on his menu, says he does so "simply because it tastes so much better".

"Breeding animals is not like buying furniture at Ikea, it will not be the same every time. But the most import thing to me is the beef is grassfed - the texture and flavour are far, far superior". He dismissed the US research, saying if he was selling grainfed beef, like most of the product in the US, he would find a study to support that.

Prices to drop Senator warns

Brazilian controlled red meat processing giant Swift Australia should be forced to divest some of its market-dominating assets to reduce its market power according to a report in the Weekly Times.

That's the opinion of southern NSW beef farmer and maverick Liberal senator Bill Heffernan, who is warning the partnership between the Brazilian-owned Swift and a major retailer could lead to lower prices for farmers.

The Australian Competition and Consumer Commission (ACCC) is currently assessing whether or not Swift should be allowed to acquire feedlot processing facility Rockdale Beef at Yanco in southern NSW.

Swift currently controls 22 pc of the Australian processing sector, with the US-owned Cargill Australia the next biggest players with a 12 pc slice of the business. Swift has also recently entered the trucking business in southern Queensland.

More animals going to market

Restockers and lotfeeders absorbed increased numbers of cattle which flooded the market ahead of last week's Monday public holiday says Weekly Times, with vendors opting to make up for the rain-affected sales of the previous week.

The paper says that supply increased by 11 pc at saleyards monitored by the National Livestock Reporting Service (NLRS) and yet all categories of cattle in all states, except for trade steers in NSW, sold to firm rates.

This trend was further reflected in the Eastern Young Cattle Indicator (EYCI), which held steady last week to close at 349.25 cents a kilogram (carcase weight) with NLRS saying young cattle were mostly 2-score condition but well bred.

Stronger global manufacturing beef prices, particularly from the US, and anticipated lower supplies of cull cows in the months ahead should see cow prices maintain levels five pc up on this time last year.

Herd rebuilding comes at a cost

Beef cattle producers' farm cash incomes are expected to have fallen by almost 50 pc in southern Australia during the 2009-10 financial years according to a report in the Stock and Land.

The decline, due to herd rebuilding during the same period on the back of better seasons, will see income hit about $31,700 per farm in southern Australia says a report released last week by ABARE titled Australian Beef: financial performance of beef cattle producing farms 2007-08 to 2009-10.

This loss of cash income was far greater than that predicted for northern Australia, which ABARE says will experience an 18 pc reduction in farm cash income to around $66,000.

Dry conditions in southern Australia since the 2002-03 drought were the main cause for the big difference in predicted farm cash incomes between the northern and southern zones of the country.

MSA grading underpins branded meat success

Australia's largest red meat processor, JBS Swift Australia, attributes Meat Standards Australia grading system with underpinning the success of a proportion of its domestic beef brands says Stock and Land.

Three years ago when the Brazilian-owned company acquired Queensland-based Australian Meat Holdings it had no MSA brands, but now the business grades between 2000 and 3000 cattle a week.

Swift's Townsville plant was the first to become MSA-accredited - in May 2008 - and by the middle of this year Swift Australia domestic sales and marketing spokesperson Jamie Ferguson says all seven of the company's export beef plants will be capable of grading cattle for MSA.

Ferguson says Swift sees it as a way of value-adding its livestock, "as it should be for producers who can participate in supplying the better end of the market with tender, quality beef".

Mites eating hide prices

Cattle mites are now eating into both the quality of cattle hides and returns for producers, cutting into the overall value of the production chain according to a report in the Stock and Land.

Department of Primary Industries (DPI) beef industry development officer Maria Crawford says a wet and warm autumn has led to unusually high mite damage, which is costing the hides industry thousands of dollars weekly in lost hide value.

Crawford says that with hides the most valuable cattle carcase by-product this issue affects both beef cattle producers and the whole leather trade, with skins being downgraded from high grade to reject.

She told the paper that the cattle mite - demodex bovis - is the suspected source for this problem, living in cattle hair follicles and causing small nodules to develop in the skin, resulting in 15 pc of hides affected in the past two months.

MLA UPDATE

Consumption and won affects Korean beef demand

18 June 2010

Both Australian beef exporters and Korean traders reported that currency volatility and low beef consumption affected Korean beef demand this week.
Enthusiasm for Korea's participation in the FIFA World Cup in South Africa has triggered many consumers to eat outdoors. However, it was reported that most spectators are satisfying their appetite with snacks (e.g. fried chicken) instead of dining out (Joong Ang Daily).

Korean news sources have reported that chicken consumption has increased, as high temperatures have caused consumers to choose chicken over other meats. Along with fried chicken from franchise outlets, major retailer, E-Mart, indicated that chicken prices have increased due to stronger demand (Kukmin Ilbo).
Another factor slowing beef demand is the high volatility of the Korean won against the US$ - the won has been fluctuating on the euro's movements (Business Week).

However, major financial services company, Wells Fargo, reported that increasing Korean exports, manufacturing, investment and consumer spending should soon begin to pay dividends for the won (Business Week).

Overcast summer outlook in the US

18 June 2010

Despite the forthcoming Independence Day (4 July) holiday and summer grilling season in the US, the short term outlook for imported beef has been clouded by large and cheap chicken supplies, and a slowdown in foodservice activity.

The weaker buyer demand was reflected in a 1% fall in fresh 90CL domestic trimmings to 160US¢/lb, and a 1% fall in imported Australian 90CL cow meat to 154.5US¢/lb this week. Returns to exporters were further hampered by the rapid rise of the A$, which rose 3% on last week to 86US¢, pushing prices down 3% to 364.5A¢/kg FAS.

Given the current weaker demand signals (with little room for improvement in coming weeks), imports of Australian beef are expected to reach only 16,000 tonnes swt in June - 27% lower year-on-year and 39% lower than the five year average.

Japan enters damp season

18 June 2010

Demand for Australian beef from Japan was slow this week, as the market enters the rainy season. Overall, meat consumption tends to ease during the period, before picking up again with the arrival of summer holidays (mid July to the end of August).

Export prices to Japan varied this week, but the appreciation of the A$ from last week reduced the overall returns to Australian beef exporters.

In the Japanese wholesale market this week, Australian chilled grassfed prices were soft across the board, particularly striploin (down 8% from last week to 1,200 yen/kg). US beef prices were mostly firm, but demand was sluggish, according to the trade. Chilled US steak ready (striploin) Choice grade was traded at around 2,075 yen/kg this week (no change from last week), while Australian mid-fed striploin averaged 1,950 yen/kg (down 50 yen/kg from a week ago).

Lambs push records as cattle prices ease

18 June 2010

The short trading week across the eastern states put additional pressure on lamb prices this week, with records broken across many categories. In contrast, the cattle market eased, even with yardings tightening 19% on last week, with quality reportedly an issue across some regions.

While national average prices for the two lightest lamb categories eased this week, with restocker lambs falling almost 8%, the seemingly unrelenting march towards record heavy lambs prices continued. Trade and export lamb prices increased 4¢ and 7¢ on last week, to 538¢ and 528¢/kg cwt, respectively.

The coming weeks should be very interesting for the lamb market, with the record high prices undoubtedly placing significant pressure on processor margins. The key to how high this winter price peak will go probably lies with the numbers of old lambs to come through in July and the level of the A$.

A reported decline in the quality of cattle offered across many of MLA's reported saleyards this week largely offset the impact of lower numbers, with national averages falling across almost all categories. Trade steer prices averaged 5¢ lower, at 338¢, with Queensland prices slipping 8¢, to 330¢/kg cwt.

Friday daily livestock article

18 June 2010

Numbers dropped a little at Roma for a yarding dominated by cows. Heavyweight yearling steers averaged 173¢ while heifers slipped 8¢ to 154¢/kg. Heavy grown steers Improved 4¢ to average 167¢ and bullocks were firm topping at 170¢ to average 161¢/kg. Medium weight D4 cows were 5¢ dearer around 144¢ as heavyweights made 143¢/kg.

At Dubbo numbers were up but overall quality slipped. Vealer steers to restock averaged 186¢ while heifers to the trade were 4¢ to 13¢ dearer with medium weights mostly making 178¢/kg. Yearling steers to feed were 7¢ cheaper around 186¢/kg. Heavy grown steers made similar rates to last week around 180¢ and medium weight D2 cows averaged 135¢/kg.

There was a similar sized offering at Bairnsdale with some very good vealers penned. Heavyweight vealer steers to slaughter topped at 227¢ to average 219¢/kg. Heavy yearling steers to the trade were firm around 183¢/kg. Medium D2 cows were 2¢ dearer at 142¢ as the heavyweights gained 3¢ to 153¢/kg.

After Thursday's markets the Eastern Young Cattle Indicator (EYCI) finished 1.25¢ dearer than last week at 350.5¢/kg cwt. The trade steer indicator was 2¢ dearer at 190¢ and feeder steer 3¢ cheaper at 183¢/kg lwt. Japan ox and US cow were both steady at 182¢ and 137¢/kg lwt respectively.

There was a substantial increase in numbers at Wagga with around 12 000 more lambs penned. Trade lambs were $3 cheaper around $138/head or 532¢/kg cwt. Well finished Merino lambs were $2 to $7 dearer with heavyweight portion selling from $118 to $134/head. Well finished heavyweight pens averaged 519¢ to 531¢/kg cwt and an exceptional pen topped at $185/head. Merino sheep sold up to $11 dearer reaching $142/head.

 The eastern states restocker lamb indicator slipped 5¢ on a week ago to 530¢/kg cwt. Merino lamb was firm at 468¢ and light lamb 7¢ dearer at 490¢/kg cwt. Trade lamb settled at 542¢ being 3¢ up and heavy lamb gained 7¢ to 530¢/kg cwt. Mutton finished 2¢ stronger at 425¢/kg cwt.

A$ edging higher

18 June 2010

The past week has seen the A$ edge higher, as some confidence returned to global equity markets and signs that the Australian economy remained comparatively healthy. After pushing above 87US¢ early in the week, the A$ finished Thursday trading above 86US¢ - up 5% for the week.

After plunging over 12% in the second half of May, to below 82US¢, the A$ spent most of early June trading between 82-85US¢, as uncertainties continued to plague financial markets and debt concerns gripped European economies. However, compared with the same period last year, the A$ is still higher, averaging 84US¢ so far in June - up 5% on the same period last year (80.5US¢).

For the Australian red meat exporting sector, while the lower A$ has been welcome news, the full benefit of the fall has been somewhat offset by increased buyer hesitancy, given the volatility in currency markets.

Cattle market wrap

18 June 2010

Demand mixed with quality

Lower throughput this week at MLA's NLRS reported saleyards had a mixed impact on demand. While processors looked to secure orders, they faced solid competition from feeders and restockers, resulting in prices varying depending on quality and region.

There was a noted increase in the number of NSW restocker orders active at the Roma store sale on Tuesday, which helped boost the market for medium weight yearling steers - averaging 192¢, up 5¢/kg lwt. There was also an extra order in Scone looking for well-bred vealer steers to return to the paddock in western NSW. The extra competition resulted in medium weight vealer steers to restockers averaging 4¢ higher, at 206¢/kg lwt.

Overall, restockers were not prepared to pay last week's improved rates, with all prices slipping except for yearling heifers, which averaged 3¢ higher at 157¢/kg lwt. A dearer trend was recorded in NSW for the heifer portion, where producers looking for young cattle paid an average of 7¢ more for heifer vealers, averaging 175¢/kg lwt. Despite the higher NSW returns, the national average price for yearling steers slipped 3¢ compared with last week, to 172¢/kg lwt.

Processor rates also generally eased with quality playing a factor. The small numbers of prime finished young cattle available are being hotly contested by processors, butchers and wholesalers. B muscled vealer heifers to the trade made an average 4¢ more than last week with most pens selling around 204¢/kg lwt. Similarly, B muscle yearling steers to processors gained 2¢ to average 201¢/kg lwt. C and D muscled lots to slaughter could not maintain the same trend, with averages slipping 2¢ to 6¢/kg lwt. C muscle vealer steers to slaughter slipped 4¢, to 184¢ and D muscle yearling heifers were 6¢ cheaper, averaging 147¢/kg lwt.
Lot feeder saleyard prices remained firm, to slightly cheaper on last week's levels. Contract rates for cattle to be short-fed experienced a cheaper trend, with reports of young cattle exceeding the live export weight restriction heading south to be fattened on grain.

Public holiday cuts cattle yardings

The shortened trading week meant no Monday sales were held this week, except in WA. Consequently, national throughput at MLA's NLRS reported markets fell 19% compared to last week.

At Dalby, numbers fell 39%, after last week's lower prices discouraged some producers from bringing cattle forward. Numbers were also well down at both Roma and Mareeba, although Warwick experienced a slight lift.

Most yardings increased across NSW, with the exception of Inverell and Casino, with yardings dominated by young cattle. Scone and Singleton had the largest jump in numbers, as numbers returned to more normal levels.

In Victoria and SA, most yardings remained steady, with a few more offered at Wodonga and Leongatha, while numbers eased slightly at Naracoorte. Muchea on Monday had a larger offering, with very little quality on offer, except for a few supplementary fed young cattle.

US beefs up exports

16 June 2010

The value of US beef exports jumped 37% year-on-year in April to US$267.9 million, while volumes grew 30% to 58,982 tonnes. April export values were also 14% higher than in April 2003, the last year of pre-BSE market access conditions for the US beef industry (USDA, US Meat Exporters Federation).

Mexico and Canada remained the largest markets for US beef in April, taking 12,227 tonnes and 12,139 tonnes, respectively, valued at US$49.2 million and US$57.9 million. US exports to Korea (6,994 tonnes) and Japan (7,300 tonnes) continued to grow at a rapid rate, surging 287% and 28% year-on-year, respectively, although remain well below 2003 levels.

US beef exports for January - April totalled 215,929 tonnes, 24% more than the previous year. Despite this, the expectation is still for much lower US beef production this year and the next, based on the shrinking beef cow herd and the smallest calf crop in more than 50 years (CME's Daily Livestock Report).

The USDA has forecast beef production in 2010 to fall 1.8% on 2009 to 25.608 billion pounds, and for a further fall of 3.3% to 25.217 billion pounds in 2011.

Argentina to fall short on HQB exports

16 June 2010

Argentina will not fulfil their 2009-10 "Hilton" High Quality Beef (HQB) quota, and is only expected to export around 18,000 tonnes swt to the EU out of their total 28,000 tonne quota, according to the Argentinean government (Infocampo).

The shortage is anticipated despite the government's redistribution of 3,293 tonnes (from companies which recognised the inability to fill their respective shares of the quota) to interested exporters.

The low shipments over the fiscal year to date are the result of the delay in the distribution of the quota among local exporters (Argentina only commenced HQB exports in November 2009).

In addition, a shortage of heavy export steers and the government's export controls have made it increasingly difficult to ship product.

Since last week, exporters have been filling remaining contracts with air freighted shipments. However, according to industry sources, many exporters have admitted the inability to proceed with these shipments due to high costs.

Butcher carves up the Bega market

Retired Bega butcher Brian Sirl still clearly knows his beef according to a report in The Land after penning one of the top-earning lines of weaner steers at a recent Bega store sale.

That paper says that Sirl, who sold his Kydd's Butchery business eight years ago after 46 years in the red meat retail industry, saw his pen of eight Angus steers, aged 10 months, return $642.

During his time behind the counter Sirl says he would ideally get the steers from the "gate to the plate" at 200 kilograms dressed weight, saying it costs the same to break up a beast at 150 kilograms as it does at 200 "so it pays to have the weight in them".

Sirl currently carries 180 Angus breeders on his property Springbrook at Buckajo, near Bega and sells the majority of his turnoff through store and prime sales at Bega, saying he appreciates the five cents a kilogram feedlot premium paid for Angus.

Searching for sale solution

The Land says that groups at Yass and Goulburn are locked in battle to secure a multi-million dollar selling centre expected to change the face of livestock selling in the southeast of the State.

It's hoped any new centre will prove a lure for local producers, who are increasingly offloading their stock at saleyards such as the Central Tablelands Livestock Exchange (CTLX) "super yards" at Carcoar and Wagga.

In March proposals for a new $20 million saleyards complex in Yass received the support of local farmers and agents after a plan by Goulburn Saleyard owners Kattle Gear Australia to build yards for 2500 cattle and 20,000 sheep was rejected.

The paper suggests that proponents of the proposed Yass super yards are claiming that their centre, once operational, would attract as many as 150,000 cattle and a million sheep annually within four years.

MLA cooking up casserole demand

Meat and Livestock Australia (MLA) has a new campaign which is urging the nation's beef customers and consumers to see beef as the bright side of winter according to a report in The Land.

MLA last week rolled out its new beef casserole campaign across several media platforms designed to boost consumption in the winter months - it is the third year of a strategy to encourage consumers to build their beef skills and expand their casserole repertoire.

MLA marketing general manager David Thomason says marketing for lamb has mainly focused on getting it noticed through its Australia and Mother's Day and spring promotions.

But he says the issue for beef has not been getting it noticed but rather building householders' confidence in their ability to cook a greater range of beef dishes beyond the traditional roast or steak.

Casino's Amy is on a roll

Amy Morton can pick a beast likely to hit market specifications from a mile away according to a report in The Land - even if the animal in question is soaked to the skin by pouring rain.

The newly-crowned Casino Beef Week Queen is a qualified butcher and the paper says she is currently working as a specification co-ordinator at Casino's Northern Co-operative Meat Company.

So when she said the lineup of animals in this year's prestigious Beef Week led-steer competition were as well bred and high in quality as you would find anywhere, it was a fair bet they would go on to make good money.

But even Amy's professional breath would have been taken away by the $5 a kilogram top set by the 496-kilogram champion steer, which went to Atron Enterprises at Casino, with primal cuts headed for the restaurant market.

FMD - is Australia doing enough?

A national Rural Press report says that the Federal government is spending nothing extra on beefing up Australian borders in the wake of the devastating foot and mouth (FMD) disease outbreak in Japan.

While we have effectively closed our borders to all Japanese animals and animal products which could potentially be affected by the disease, MLA Japanese regional manager Glen Feist says reports on the toll to Japan's herd are greatly exaggerated.

He says that of the 200,000 animals which have been destroyed since March, about 150,000 of those are pigs and the country's highly-prized Wagyu herd is intact despite claims it has been destroyed.

The report says that with Japan's disease and quarantine standards once believed to have been considerably robust, this current FMD outbreak is being touted as an overdue "wake up" call for Australia.

Burke burrs up at quarantine calls

Federal Agriculture minister Tony Burke would not comment last week on the growing call for a review of Australia's besieged quarantine system according to a report in The Land.

Nor, the paper says, would Burke be drawn on what extra resources the government is committing to keep Australia free of the foot and mouth disease (FMD) which has now gained a strong hold in Japan.

It is believed that Canberra's only action since the Japanese detection of the disease has been the suspension of imports from Japan of animals susceptible to FMD and their products made after March 10.

Those products include genetic material, dairy products, hides and skins, and biological products produced from FMD- susceptible species. There are no imports of live animals or fresh meat from Japan or processed meat and dairy products for which there are already rules to manage FMD risk will be approved on a case-by-case basis.

Solid prospects for Terra Firma

After investing a reported $425 million in purchasing 90 pc of Consolidated Pastoral from the Packer family, The Land says Terra Firma, its new owners, finally dropped in to see exactly what they had got for their money.

Guy Hands founded Terra Firma in 1994, and has since built it into a $13 billion empire with investments ranging from alcohol to aviation - and now including some of pastoral Australia's iconic names, such as Newcastle Waters.

Twelve months since the acquisition has seen the country's ambition to become the number one beef producer following an unusual private-equity shakeup involving hiring additional staff rather than redundancies and buying more land rather than selling off assets.

The paper says that after the most recent property purchases by the group, and more expenditure on water, yards and fencing, the goal to reach 340,000 head will probably have been surpassed - and it won't stop there.

Angus brands build T&R sales

T&R Pastoral has made a strong push to value-add to its beef business by selling a large proportion of the 3000 head weekly kill through the company's five brands according to Stock Journal.

Despite a tough trading environment, South Australia's largest red meat processor's two premium brands - Certified Australian Angus Beef and Angus Pure - have been able to grow significantly.

In November 2008, T&R Pastoral became just the third licensed CAAB-accredited processor in Australia - and since then its has built the throughout from 80 head a week to more than 300 head a week.

These CAAB cattle are custom fed for 130 days at Wanderriby feedlot at Meningie before slaughter. And with the large numbers of Angus cattle in SA, T&R has been able to source most of its stock locally.

Rise of dark cutting costs SA producers

South Australian producers need to better manage pre-slaughter stress levels of cattle consigned to the Meat Standards Australia grading scheme because failure rates dueo to dark cutting are three times the national average says Stock Journal.

The paper says that the MSA livestock supply chain SA co-ordinator Mark Inglis has reported that the eating quality system has delivered about 10 cents a kilogram premium above the normal grid price.

But too many SA producers are missing out because of dark coloured carcases and Inglis says the local compliance rate could be improved by greater emphasis on nutrition and minimising pre-slaughter stress.

This year MSA is on track to grade 1.2 million head and between January 2009 and May this year 5.85 pc of carcases graded nationally had a pH greater than 5.7. But in SA that figure hit a staggering 15.38 pc.

Rumours rife over Twynam sale

Speculation is mounting that two large chunks of the Riverina property portfolio owned by Twynam Agriculture are about to change hands according to a report in the Weekly Times.

Rumours have become increasingly stronger that Macquarie Pastoral Fund's offshoot Paraway Pastoral will purchase Mungadal Station, near Hay, and Gundaline Station, near Carrathool although Twynam has denied them and Paraway refuses to comment.

Mungadal Station has been on the market since April 2008 when Twynam's other long-held Riverina properties Steam Plains and Cobran Station, were also listed for sale. Twynam owner John Kahlbetzer said then he would be the 100,000 hectare Gundaline Station.

One Riverina real estate agent told the paper it would "make sense" if Paraway Pastoral bought the stations, while another said it "would not surprise" him if the rumours of a forthcoming sale were true.

Prices near '05 record high

The coming winter could see young cattle prices return to the record highs of the red-hot 2005 season with prices already tracking eight pc ahead of this time last year according to a report in Weekly Times.

However, the paper says that much of the progress has been made on the back of the weakening Australian dollar, rising US prices, recovering feedlot demand and the widespread rain of last month.

According to MLA these factors have all helped to ease normal market pressure from pre-winter culling and, as such, have seen the Eastern Young Cattle Indicator pushed towards the 350 cent barrier.

Even more promising, the EYCI has lifted an average of 10 pc between now and its traditional winter peak in August for the past five years and if that repeats this year should see it approach 380 cents - its highest level since 2005.

Direct route for red meat

Red meat processors now have a growing number of retail outlets selling meat directly to their customers and Weekly Times says despite slow growth in domestic consumption of red meat, direct sellers are finding new markets with value-added and branded products and good old fashioned service.

Industry analyst Glenn McLeod from IbisWorld says consumers are shifting away from ready-to-eat supermarket meals and taking more of an interest in cooking at home, a trend amplified by the success of cooking show MasterChef.

With one pc growth expected in the specialty meat retail sector this year, McLeod says that is where specialty retailers might get ahead - in providing locally grown produce and more information about cooking it.

And with demand for "organic" red meat - meat from livestock not treated with antibiotics, growth promotants and other chemicals - expected to soar in the next five years, producers expect to see more niche meat brands gaining momentum.

Herd heads north

Victoria's biggest cowherd has been sold to Queensland says the Weekly Times with the sale of Werribee Agriculture's 5000-cow herd to a Queensland buyer finalised with all females expected to be delivered by the end of last week.

Werribee Agriculture, which until recently managed farmland at the Western Treatment Plant at Werribee, sold the Angus herd to Kilburnie Cattle Company which recently paid $12 million for the 600,000 hectare Mt Margaret Station at Quilpie.

Elders account manager George Last, who handled negotiations on behalf of Werribee Agriculture, confirmed the sale last week, saying he had been angaged by the company six months ago to sell the herd.

The paper says Kilburnie Cattle Co emerged as the buyer just one week after it was revealed the company had also bought Mt Margaret, which adds to their existing northern NSW holdings.

Angus hits new heights

There is no doubt Angus beef is on a roll - literally - through the McDonald's and Hungry Jack's fast food outlets as a key ingredient in their burger ranges according to a report in Queensland Country Life.

But now the rise and rise of Angus beef continues seemingly unabated, with the recent launch by Pattie's Foods, the company behind the Four 'n Twenty brand, a new meat pie range made with 100 pc Certified Australian Angus Beef.

And one of those on hand at the Brisbane launch at the Gabba was AFL star and Brisbane Lions veteran Jonathon Brown, who gave the Angus taste top marks while sampling his first bite.

In an exclusive agreement with CAAB, Four 'n Twenty will be the only meat pie licensed to use the certified Angus beef endorsement on its packaging - another rolled gold promotional opportunity for Angus beef.

Downs brand wins top prize

A Queensland beef brand underpinned by strong product integrity and meat science principles claimed the major honours in the 2010 RNA Branded Beef Competition says Queensland Country Life.

Darling Downs grainfed beef producer Stockyard Beef claimed the coveted grand championship - Australia's largest branded beef competition which is held as part of the Royal Queensland Food and Wine Show.

Eighteen of the nation's most prestigious beef brands, drawn from Queensland, NSW, Victoria, Tasmania and SA, vied for awards in four divisions judged by a panel of eight experts.

The paper says that the branded beef competition also serves as the opener for Brisbane Show's 2010 beef cattle program, which this year will kick off with the led steer judging on August 4.

MLA UPDATE

Live cattle trade to Indonesia

The number of import permits issued this year by the Indonesian Government is down on the same time last year as it tries to match its domestic demand with import numbers.

Restrictions have also recently been enforced to ensure that only cattle weighing up to a maximum of 350kg are being imported.

The 350kg weight restriction has been part of the Indonesian Government's decree since 2008 and is now being enforced as part of Indonesia's beef self-sufficiency goals, as well as to ensure the local Indonesian cattle industry can value-add by feeding the cattle they import locally prior to processing.

Industry is seeking to secure alternative live export and/or processed beef markets for cattle over 350kg that had previously been destined for export to Indonesia, but is confident Indonesia will remain a strong long term market for Australian cattle as we continue to support its local cattle industry.

Indonesia has indicated that Australian breeding cattle and feeder cattle (up to 350kg) will play a key role in helping to achieve its self-sufficiency goals as its population continues to grow by around two million people per year.

Finishing cattle drives higher prices and southern performance: ABARE

11 June 2010

Producers who finish their cattle on grain before slaughter typically have higher incomes than those who don't, and a much higher income per hectare operated, according to Australian Beef: Financial performance of beef cattle producing farms, 2007-08 to 2009-10, released this week by the Australian Bureau of Agricultural and Resource Economics (ABARE).

Excluding all commercial feedlots, i.e. operations which have over 1,000 head on feed for over 50 days each year, the report focused on northern (Queensland, NT and northern WA) and southern (NSW, Victoria, Tasmania, SA and southern WA) producers, finding that only around 5% of southern and 7% of northern beef producers finished cattle on grain over the period.

In the north, these producers tended to be concentrated around south-east or coastal Queensland where farms are relatively small in size, but close to sources of grain. The average feeding time was 85 days, which resulted in producers receiving an average price for cattle sold to slaughter of $884/head, 17% higher than their non-feeding counterparts.

However, grain feeding entails higher costs, which resulted in lower farm business profits and rates of return to capital for northern farms, relative to those that did not grain feed.

In southern producing regions, producers who grain-finished cattle tended to be on larger properties, with more cattle and a larger area sown to grain. Although they realised only 4% more per head at sale than non-finishers, at $716/head, they achieved markedly higher financial performance, measured by income per hectare, return on capital and overall business profit.

Korean short rib prices ease

11 June 2010

Average prices for Australian and US short ribs dropped in the Korean wholesale market this week - the first decline for 18 weeks. The average fall in short rib prices from both countries was approximately KRW500 (A$0.48). In contrast, prices for New Zealand short rib increased in Korea's wholesale market, possibly due to its relative price competitiveness over other suppliers.

Some market participants described the short ribs market as 'overheated' with soaring wholesale prices since the start of this year. Subdued beef demand during summer and stabilising short rib imports could be the cause of easing prices. Some Australian beef exporters stated that interest from Korea was slower this week on last, partly due to the ongoing volatility of the Korean won against the US$. The weakening won has been driven by concerns that Europe's debt crisis may derail the global economic recovery, triggering investors to hold on to US dollars instead of riskier assets (Bloomberg).

Lambs on a high, cattle solid

11 June 2010

Despite a 6% rise in yardings this week, lamb prices continued their winter march, led by finished categories. The eastern states trade lamb indicator is poised to break the record of 540¢/kg cwt set in late July 2004, ending Thursday at 539¢. The national heavy lamb indicator rose 8¢ this week, to 521¢/kg cwt, also close to the record week ending price of 529¢ set in June last year.  

The softening in cattle export demand from Indonesia and associated enforcement of the 350kg lwt import regulation has not noticeably impacted on national or state saleyard price indicators.

The national export cow price was steady this week, at 275¢/kg cwt, still up 5% on last year, with the Queensland price up 5¢ this week. The expected tight supplies of cull cows in most regions, stronger global manufacturing beef prices (especially from the US) and the recent easing in the A$ are expected to keep supporting cow prices.

Most other cattle indicators held steady this week, except for trade cattle in NSW, which appeared to have been impacted by the added numbers after last week's rain-affected turnoff. Restocker and feeder interest remains strong due to the rains and low grain costs.

Cattle market wrap

11 June 2010

Supplies return in the north

After a number of sales were reduced due to rain last week and with no sales next Monday due to the Queens Birthday long weekend (except in WA), supplies at MLA's NLRS reported physical market improved 11% week-on-week.

Numbers increased 20% in Queensland this week, after many producers in the south-east opted to hold cattle back last week hoping for rain, although most eventually missed out. There were more cattle brought forward at Dalby, and over 3,000 additional head yarded at the Roma store sale, with large lines coming from central Queensland near Aramac and from even further north around Winton.

NSW cattle supplies jumped 28%, with large increases at Wagga, Inverell, Casino and Gunnedah, although numbers were back around a third at Singleton where very few grown cattle were penned. In SA, 19% more cattle were penned, and despite overall quality being mixed with plenty of plain lines, there were some excellent supplementary fed yearlings which sold to strong competition. Going against the trend in the eastern states, Victorian offerings slipped 15% on last week, with most markets registering reduced numbers.

Yardings in WA decreased by 33% on last week, primarily due to a public holiday on Monday. Muchea held a sale on Tuesday which was well down, with a large supply of pastoral cattle and very few medium and heavyweight grown cattle supplied. Numbers were also down in Tasmania which is normal for this time of year.

Restocker activity up

Restocker activity increased this week following some handy falls of rain last week across Victoria and NSW, while the western districts of NSW still has plenty of feed available.

Despite a fall in the overall number of vealer heifers yarded, restockers increased their purchases by around 40% this week, with most sales steady on last week at around 170¢/kg. Vealer steers were sought after by producers, who increased their purchases by 38% on last week, prices increased on average by 2¢ in Queensland and 5¢/kg in NSW.

Yearling heifer numbers doubled, with most destined to return to Queensland paddocks, with a large proportion of lightweights offered at the Roma store sale, with average prices increasing 6¢, to 166¢/kg. It was a similar story for yearling steers, although the increase in price was not as large, with the average price around 175¢/kg.

The number of cows purchased to return to the paddock more than doubled, with most of the extra supplies out of NSW. Although average prices slipped in most states, an increase in SA helped keep the national average firm at 123¢/kg.

Cows dearer in the south

Overall cow numbers at MLA's NLRS reported saleyards increased 9% compared with last weeks offerings, with NSW and Queensland markets recording larger numbers, while fewer were yarded in Victoria, SA and WA.

Price trends varied depending on supply conditions in each state. In Queensland, processors paid around 6¢ less than last week, to 112¢/kg. Despite an increase in numbers, cows to slaughter realised similar rates in NSW, with most pens selling around 126¢/kg.

Fewer cattle in Victoria and SA, along with a public holiday next Monday, meant processors were willing to pay 6¢ and
5¢/kg more, respectively, for beef cows in a bid to ensure adequate numbers. Dairy cows to process were also dearer - around 8¢ dearer in SA and 2¢/kg in Victoria. Cows to slaughter in WA mostly sold around 110¢/kg which was firm on last week.

At the close of Thursday's markets, the eastern states US cow indicator settled at 137¢/kg.

Japan economy tough, but beef consumption firm at home

11 June 2010

Japanese families have been spending less on meat purchases, but eating slightly more beef at home, according to data by Japan's Ministry of Internal Affairs and Communications (MIC).

The average Japanese household spent 6,030 yen (A$70) on meat purchases in April, down 3.1% compared with the same time last year. The year-on-year fall has been consistent for the last 13 months, as the market suffers from persistent deflation. The latest consumer price index (April) fell 1.5% from a year ago, recording the 14th consecutive monthly decline. The government believes that the economy "has been picking up steadily" (May economic report by the Cabinet Office of Japan), but it still "remains in a difficult situation".

Per household beef expenditure has also been impacted by the slow economy, with average expenditure trending down year-on-year since December 2008. Beef purchase volumes, however, have exceeded the previous year for the last 12 months, with the latest April figure showing purchases averaging 565 grams per household (up 3.7% from 2009). This indicates soft but steady demand for beef among Japanese families, despite the deflationary economy and subsequent decline in beef retail prices.

There has been no evidence of reduced beef consumption due to the recent outbreak of foot-and-mouth disease in Japan. Yet, the trade is carefully monitoring consumer reaction, as the government works around the clock to contain the further spread of the disease.

Japan's new agricultural minister

11 June 2010

Japan's new Prime Minister Kan has formed a new cabinet this week, including the appointment of Agricultural Minister Masahiko Yamada - he is known for his long term commitment to food safety.

Yamada continues to be closely involved with foot-and-mouth (FMD) disease containment measures with his vice minister. The 280th case has been confirmed this week, all confined within the Miyazaki prefecture (southern Japan).

Interest in Australian beef from Japanese buyers varied from modest to firm this week, with some exporters reporting a slow, but gradual improvement compared with several weeks ago. However, interest in trimmings eased from last week.

Beef consumption in Japan during April eased 5% year-on-year, to 74,111 tonnes (boneless equivalent, estimated distribution volume data by Japan's Agriculture and Livestock Industries Corporation). The fall was largely due to reduced consumption of imported beef (down 7% to 42,847 tonnes), compared with the same time last year when the 'yen appreciation sale' was in full swing at both retail and foodservice, as a result of the A$ depreciation during early 2009.

US market cools

11 June 2010

The US imported and domestic beef market cooled this week, with indicative import prices for Australian 90CL beef back 2% on last week, to 155.5US¢/lb - the lowest weekly price since late February. Market indications are that while Memorial Day beef demand and sales were good, assisted by favourable weather, follow through sales have been surprisingly sluggish. However, the lower A$ has largely offset the 8% decline in US¢/lb terms since the start of May for 90CL beef, with prices in A$ terms only slipping 1.5% over the same period.

Argentinean beef supplies fade

10 June 2010

Argentinean beef production continued to tighten during April, as finished cattle numbers became increasingly scarce. April production declined 12% on the previous month and was 31% down year-on-year, at 198,000 tonnes cwt - the lowest level since the March 2008's agricultural strike.

The very tight supply of cattle has been reflected in soaring cattle prices, to the highest level among the South American region, reaching US¢180/kg lwt for light steer categories.

The low cattle availability is a result of the severe drought experienced during the 2008-09 season, combined with the industry controls implemented by the local government since 2005. This has resulted in a number of cattle producers liquidating herds and exiting the industry in favour of other more profitable agricultural options.

Argentine beef exports in April slumped 60% when compared to March and 75% year-on-year, to 6,836 tonnes swt. The slump in exports is the result of the limited issuing of export certificates by the government, in order to retain beef stocks in the domestic market, in addition to the closure of a number of plants given the current low capacity utilisation.

However, despite the government's efforts to encourage packers to supply beef to the domestic market through a number of controls and incentives, domestic beef consumption has fallen 20% during the first four months of 2010, to an estimated 56kg/head per annum.when copared to the same period in 2009.

Taiwan to inspect US slaughterhouses

10 June 2010

Taiwan, for the first time will conduct on-site inspections of US slaughterhouses that export beef to Taiwan, according to Taiwan's Ministry of Health (The China Post, 7 June).

Scheduled for August or September, the inspection will be undertaken to ensure that all US beef exports are adequately labelled and meet Taiwan regulations. The planned inspection is a response to a recent request from the US to speed up the customs clearance procedure of US beef in Taiwan.

Late last year, Taiwan's legislature revised laws to ban imports of certain beef products sourced from US cattle including skulls, brains, eyes and internal organs.

Hide demand quiet

10 June 2010

Overseas hide markets have been weaker this week, with export demand slowing significantly. Overseas buyers have indicated they have sufficient stockpiles and are now holding off purchasing further in the short term in anticipation of cheaper product. Domestic hides were firm to cheaper, with some assistance from the weaker A$. Wet blue hides were also cheaper this week.

April beef production steady as Victoria declines

09 June 2010

Australia's beef and veal production during April was steady compared with the same period last year, as a 2% decline in national slaughter was offset by higher average carcase weights. Production for the month reached 175,645 tonnes swt, with year-on-year increases in Queensland and NSW offsetting declines across the remaining states, with the main feature the continued drop in female cattle slaughter in Victoria (Australian Bureau of Statistics).

Adult cattle slaughter for the month declined 2% year-on-year, to 632,752 head, with Queensland throughput jumping 3% over the same period, to 295,525 head. For NSW, while total slaughter declined 3%, average weights surged 5% on the same period last year, or over 12kg/head, partly reflecting the improved seasonal conditions so far in 2010 across many parts of the state.

For SA and Tasmania, total turnoff for April contracted 8% and 9%, respectively, year-on-year, while numbers in WA were steady, at around 35,000 head.
Female slaughter cattle in Victoria continued to tighten in April, reaching only 62,813 head - back 31% year-on-year and the lowest monthly volume since July 2006. After a surge in female turnoff in 2008 and the first half of 2009, primarily due to drought induced liquidation and a sharp downturn in dairy returns, female slaughter rates in Victoria have been below year-on-year levels for the past 12 months. Indeed, for the past 12 months (May 2009 - April 2010) Victorian female slaughter totalled 898,000 head, a decline of 18%, or 202,000 head on the previous 12 month period (May 2008 - April 2009).

 Assisting the sharp contraction in female turnoff in Victoria over the past year has been the gradual depletion of available female numbers in previous years, better seasonal conditions and rejuvenated prospects for the dairy industry. With seasonal conditions across much of Victoria reasonable heading into winter, female turnoff is expected to remain tight for several months to come, especially if beef herd rebuilding gains momentum.

 For April, total Victorian beef and veal production declined 13% year-on-year, with average weights up 6%, at 256kg/head.

 For the first four months of 2010, total Australian beef and veal production was 4% below the corresponding period in 2009, with a 5% decline in adult slaughter partly offset by a 1% increase in average national carcase weights.

Korean cattle slaughter falls after five year growth

08 June 2010

Korean cattle slaughter totalled 252,318 head during the first four months of 2010 - a decline of 12% compared to the same period in 2009 (Nonghyup). With the decline in domestic beef production, demand for imported beef surged, rising 16% year-on-year (KITA).

Hanwoo (native) cattle slaughter for the first four months of 2010 dropped 11% year-on-year, to 198,298 head, as the industry dealt with foot-and-mouth disease outbreaks. Beef cattle (non Hanwoo breed) slaughter dropped 22% for the same period, to 32,975 head, while dairy cattle slaughter remained steady at 21,046 head this year (Nonghyup).

While total Korean cattle slaughter declined over the four month period, domestic chicken and pig slaughter increased 7% and 6% year-on-year, respectively (Nonghyup).

Riding the buck

A month ago the Australian dollar's seemingly unshakeable reputation as a star performer in the international currency arena was a nagging source of widespread farm sector anguish and expense says The Land.

But not anymore. Over the past two weeks that has all changed and the bullish currency's painful long-term squeeze on exporter margins and rural commodity prices has been bucked as our dollar made a sudden dive against its American counterpart, hitting its lowest levels in almost a year.

Analysts are now tipping the dollar to stay around the $US0.83 cent mark in the short term, albeit riding plenty of ups and downs along the way, possibly climbing towards parity with the US dollar again by next year.

The paper says it is the one market indicator Australian farmers are always happy to see head south and its present value is a far cry from the $US0.92 rate at the start of May - adding about $2 billion to Australian farm incomes over a year.

Why we need farmers

A report in The Land says Sydney's population is far less likely to understand how food is produced, the value of agriculture or what farmers do than in any other Australian city according to recent research.

The findings have alarmed the NSW Farmers Association, which is launching a major campaign to "sell" the image of farming and food production to "out-of-touch" metropolitan dwellers in Sydney, Newcastle and Wollongong.

MLA sponsored research shows at least two thirds of today's Sydneysiders aged 30 and under have never visited a farm and there is also genuine confusion amongst school children about how milk and meat products reach retail shelves.

One in five did not understand milk originated with cows, and not with milk-bottling factories. The campaign, expected to begin next month, is likely to have significant backing from one major TV network.

AACo's Wagyu windfall

Japan's foot and mouth disease (FMD) outbreak is proving a lucky early break for Australian Agricultural Company's beefed-up beef exporting plans according to a report in The Land.

With Wagyu beef exports now banned from Japan, AACo is already enjoying a sharp jump in orders to the US and Korean customers, whose supply lines to Tokyo have been cut off for an unknown period.

AACo managing director David Farley told the company's recent annual general meeting Wagyu is seeing increased prices and market opportunities - AACo's had jumped 18 pc that week alone - because of FMD.

Japanese authorities are now looking at a massive slaughter program, possibly as many as 200,000 head, because of the FMD outbreak. Farley, who has just returned from Europe, says even in these tight times Wagyu is selling at 198 pounds sterling a kilogram in Harrods.

AACo sets sights on new opportunities

Australian Agricultural Company, Australia's second-oldest company - is turning its attention to previously overlooked beef market opportunities in Asia says Stock and Land to help turn the business around.

After two turbulent years of boardroom instability, including five different chairmen in that time, the pressure to deliver a big lift in business performance is weighing heavily on the shoulders of new managing director David Farley and his team.

Getting greater value from carcase yield, including the market for offal, and using the market experience of AACo's Dubai-based shareholder IFCO, have become other growth strategies for Farley, who joined the company in December.

IFCO, the biggest red meat processor in India, holds a 10 pc stake in AACo and has extensive contacts in the Middle East. It plans to help open new markets in the region for AACo - Australia's largest beef business with 600,000 cattle - while Malaysian shareholder Felda is looking at a lotfeeding option alongside its palm-oil plantations.

T&R in supermarket push

Major South Australian red meat processor T&R Pastoral is continuing with its rapid expansion into the retail market according to Stock Journal with the launch of Thomas Farms - another new brand.

T&R is renowned in the State's livestock industry but is now hoping to build a similar profile among consumers across the nation with its range of high quality, consumer-ready beef and lamb products.

The paper says that in the past the company has been heavily dependent on its export operations, but its management is now hoping to build on its 20 pc share of sales in the domestic market.

About a month ago the first packets of Thomas Farms meats began hitting supermarket shelves across SA, the NT and Victoria, and the roll-out is planned to continue in other states in the coming months.

Indo-bound bull delivery

Another flight of export cattle has headed from Melbourne to Indonesia according to a national Rural Press report - and this time the cargo is 110 bulls for boosting the Indonesian herd.

Overseeing the shipment was Sustainable Agro Industry Service operations manager Brendan Head, who says the first stop for the draft of bulls was Surabaya, Indonesia's second-largest city, where half were unloaded.

Head says from there the bulls are headed for the nearby city of Malang, where the semen collection centre Singosari is based and once collected straws will be sold to villagers at $2 each - "which is a fair bit for them".

The second unloading was Jakarta, with those bulls headed for the old Dutch capital of Bandung, which is between 4000 and 5000 metres above sea level. And like the first lineup, they will be headed to a nearby collection centre.

Australian herd update

Recent data released by the Australian Bureau of Statistics (ABS) profiled the national beef cattle herd by Natural Resource Management Region (NRM) as at June 30, 2009, and reinforced Queensland's dominance says The Land.

According to the ABS the Australian cattle herd increased two pc in 2008-09 to 27.9 million head while for the same period the national sheep flock kept declining, down 5.4 pc to 72.7 million head.

The paper says that despite a nine pc contraction in the Fitzroy NRM region's (surrounding Rockhampton) cattle herd, it still held onto its title as Australia's largest cattle region with 2.6 million head.

The influence of drought, flooding and cattle movements throughout the year saw movement in the ranking of the next largest regions, with Burdekin jumping from fourth in 2008 to second with 1.7 million head and the NT (no NRM classification) fell one position to third with 1.68 million head.

Japan craving Australian beef

Despite recent reports to the contrary, other MLA sources say current interest out of Japan for Australian beef has nothing to do with a reaction to that country's foot-and-mouth disease epidemic, but is solely price related says Queensland Country Life.

The paper says that MLA Japan region manager Glen Feist says there has been a significant kick in demand for Australian beef - and much of it is in direct response to the falling Australian dollar.

Feist says there has been zero negative reaction from Japanese consumers about beef generally, as a result of the FMD outbreak and nor has there been any significant change in price for Wagyu beef or otherwise despite earlier reports.

As of last week Japanese authorities say a total of 19,303 beef cattle have been destroyed as a result of the outbreak, mostly being sound animals within a radius of infected animals culled as part of the process.

Pasture meets nutrition needs

Last winter was one of the driest on record in Central Queensland but thanks to deep ripping and conservative stocking, Brett McCamley did not have to supplementary feed breeders grazing these improved grass and legume pastures says a report in Queensland Country Life.

McCamley, a fifth generation cattle producer, recently hosted members of the CQ Beef Bajool group to inspect 324 hectares of coastal pasture development at the family partnership's Fern Hills Grazing Company at Fern Hills.

Department of Employment, Economic Development and Innovation FutureBeef extension officer Ken Murphy says through the government's FutureBeef initiative Bajool district members were able to share their livestock and resource management skills to achieve more profitable and sustainable businesses.

The CQ Beef project is just one of many nutrition, grazing, breeding and business management FutureBeef projects being coordinated statewide to improve the profitability and sustainability of the Queensland beef industry.

Obama to savour Aussie beef

US president Barack Obama's upcoming visit to Australia is likely to be memorable for a number of reasons says Queensland Country Life - just one of which will be the quality of the beef he eats during his time with Prime Minister Kevin Rudd.

Following approaches from Tasmanian MP Sid Sidebottom the paper says that it looks as though two of the Island's premium beef brands will grace the dining table at The Lodge during the Obama visit.

After accepting a trial sample of premium Tasmanian beef from Sidebottom, Rudd agreed subject to availability the government will use Tasmania's famed Cape Grim grassfed branded beef.

The paper says Cape Grim is arguably Australia's highest-quality grassfed beef product, consistently achieving MSA boning groups 1-4 off grass in heavyweight carcases averaging close to 380kg and displaying abundant marbling.

Russian taste of Queensland

Coinciding with the recent Brisbane visit by Russian Meat Importers chief Sergey Yushin was a local marketplace visit by a delegation of leading Russian chefs according to Queensland Country Life.

The paper says Russia is now the second biggest beef importing nation in the world - behind the Americans - and as such is increasingly being courted by Queensland beef exporters, already supplying more than half Australia's exports to Russia.

The chef group's tour included Swift, John Dee and Nippon processing plants, retail sites, restaurants and other points of interest before a showcase beef dinner put on by MLA, Trade Queensland and participating processors.

Yushin says it was a great opportunity for key stakeholders from the Russian restaurant industry to see what they could do with Australian product, which already has a strong reputation in the Russian market for quality and consistency.

US still grappling with E. coli

The E. coli season is upon the US industry again says Queensland Country Life and many there are holding their breath there won't be a spike in positives and recalls as seen in the past two years.

The season is a reminder that food safety and demand are the US beef industry's biggest issues and the two are strongly linked - as the 1993 Jack-in-the-box E. coli 157:H7 tragedy showed.

Beef recalls in the following decade cost the US industry $1.6 billion in lost demand and analysts say an even larger amount was likely lost in the past seven years due to E. coli recalls and concerns about BSE.

But there have been other costs which have impacted the industry more. The Jack-in-the-box tragedy set off a series of regulatory and other actions which cost the US beef industry at least $US850 million in the decade from 1993, sparking the closure of at least 18 grainfed cattle plants and 23 abattoirs.

Euro woes hurting beef business

When you think of Greece it is more about kebabs to kleftiko, not beef. But Queensland Country Life says each Greek eats an average 20kg of beef annually and its current economic crisis is hitting big producers such as Australia and the US hard.

Greece's debt crisis - and that of several other EU countries - plus concerns about the euro have global investors on edge and while the resulting falling currencies including our dollar may be good short-term news, it will make it increasingly hard to price product for forward sales.

The market jitters have already dealt a sharp blow to the US grainfed industry and are a reminder that outside forces, not supply and demand, are the greatest risk to the market going forward.

The June live cattle contract lost $4.12 per cwt solely because of Greece's problems. The big concern going forward is speculative traders - who had heavily bought US live cattle futures - might bail out of live cattle big time.

MLA UPDATE

Unchanged conditions in Korean wholesale market

4/06/2010

Similar to last week, Australian beef exporters reported on steady to slower demand from Korean traders this week. The high volatility of the Korean won against the US$ was mentioned as a possible cause for the ease in demand.

Prices for Australian short ribs in the Korean wholesale market remained steady this week - after gradual increases since late April. However, US short rib prices increased for the ninth consecutive week due to subdued supply. Prices for most other imported cuts remained unchanged.

Australian exports to Korea during May totalled 10,831 tonnes swt - a 36% increase on the same month last year and an 18% rise year-to-date compared with the same period in 2009. Chilled beef exports to Korea reported record volumes with 13,085 tonnes swt - up 27% on last year (DAFF).

Japan awaits new PM

4/06/2010

Japan's Prime Minister Yukio Hatoyama - whose support had dropped to a record 20% low recently - announced his resignation on Wednesday. The New Prime Minister is expected to be chosen by late Friday, followed by a formation of the new cabinet early next week.

As the ruling Democratic Party of Japan (DPJ) now fiercely focuses on winning the upcoming Upper House election next month, the political turmoil may delay decisions concerning key trade issues, including the US beef import negotiations.

In the export market, Australia sent 30,756 tonnes swt of beef to Japan in May, down 10% from 2009. Chilled beef shipments declined 15% year-on-year to 13,002 tonnes, largely due to stagnant demand on the back of the strong A$ (15% higher from 12 months ago against the US$). Frozen beef exports also eased 5% to 17,754 tonnes. Calendar year to date shipments totalled 144,341 tonnes, 2% below the same time last year.

Beef export trading this week was generally subdued, with export prices to Japan mostly unchanged in US$ terms (but lower in A$ terms due to the A$ appreciation). Some Japanese buyers were still keen to source trimmings, resulting in competition with the US market

Wholesale prices steady

4/06/2010

Beef prices at the Sydney wholesale meat market have been stable for most of 2010, following a sharp decline at the end of last year. Currently, beef prices are 9% below the same time last year, while lamb wholesale prices are 22% higher.

Wholesale carcase beef prices in the 180-220kg cwt bracket are currently averaging 345¢, compared with 390/kg cwt at the same time last year. Comparatively, 180-220kg cwt yearling steers selling over-the-hooks in NSW currently average 302¢, up from 279¢/kg cwt in the first week of June last year.

In recent weeks, top quality yearlings have been a little scarce as winter begins and all weights cleared early most days. This added some enquiry to the broken trade which ensured acceptable clearances. Prices remain stable and apart from the odd sale of choice lightweights which sold marginally better, all other sales recorded steady prices.

Currently, the average price for trade weight lamb whole carcasses between 20-22kg cwt is 635¢/kg cwt, compared with 520¢/kg cwt at the same time last year. Lamb prices in the equivalent weight range are averaging 485¢ direct to works, compared with 477¢/kg cwt last year, reflecting a more favourable situation for wholesalers this year.

Lamb demand continues to be strong, particularly for the limited supply of prime grades available. Rates this week continued on a dearer trend, with base prices up to 10¢/kg cwt higher. The broken trade was quite brisk early this week, but tapered off slightly later in the week. Quality has been good and this has ensured good clearances were maintained.

Cattle market wrap

4/06/2010

May cattle supply jumps

With significant rainfall only recorded late in the month and a turn in seasonal conditions towards colder temperatures, cattle throughput at MLA's NLRS reported markets during May increased 14% compared with the previous month.

All states except SA recorded a significant increase in numbers, with many SA producers having already sold cattle before shifting their focus to sowing winter crops. The yardings in all of the other states increased for the month, with many producers turning off cattle before feed deteriorated with the colder weather, and culling dry cows after preg-testing. In some areas, plainer cattle were forced onto the market, with a lack of suitable pasture and dwindling water supplies.

Supplies in Queensland increased 13% for the month, or just over 10,000 head, after a run of public holidays in April reduced yardings. NSW throughput jumped almost 20%; Victoria lifted 11% and WA 25%, with all states being affected by the Easter and ANZAC public holidays in April.

Despite most of May being dry and cool, good falls were recorded over much of the south east of Australia during the final week of May. The much needed wet that covered much of NSW and Victoria, but missed most of Queensland, contributed to numbers contracting 10% this week. The largest falls were in NSW, with the supply areas for Gunnedah, Tamworth and Inverell receiving up to 60mm.

Rain boosts prices

Competition at MLA's NLRS reported physical markets increased this week after rainfall restricted numbers and boosted restocker activity.

NSW experienced the greatest increase in average prices, with restockers paying an extra 8¢ for vealer heifers and around 180¢ or 4¢/kg lwt more for yearling steers compared with last week. Nationally, trade buyers also paid more, with less cattle meeting slaughter specifications offered this week. Vealer heifers made an average of 176¢, as yearling heifers were 2¢ dearer, to average 162¢/kg lwt. Feeders were also prepared to lift rates this week, sourcing yearling steers for an average close to 6¢ more at 178¢/kg lwt.

Cattle slaughter up in May

Cattle throughput jumped considerably during May, with weekly slaughter figures collected by MLA's NLRS indicating a 14% increase nationally compared with the corresponding period in 2009.

Limited supply of prime trade cattle and ongoing solid demand from restockers and feeders meant processors faced tough competition as they tried to secure adequate numbers after production shortfalls at the start of the year. However, they were assisted by more cattle coming out of central and western Queensland. NSW and Queensland slaughter figures for cattle were both up 17% year-on-year and SA 31%, while Victorian abattoirs reduced activities, killing 7% less cattle compared with the corresponding period last year.

Most direct to works rates lifted throughout the month, which reflected processor intentions to secure quality cattle, especially after the sharp fall in the value of the A$ and the low proportion of finished cattle at physical markets.

Keep your eye on US distribution centre sales

4/06/2010

The US manufacturing beef market continued to ease this week, as US traders wait for Memorial Day weekend sales performance before committing to new orders.

To gauge the success of the Memorial Day weekend beef sales, all eyes will be on distribution centre orders being placed (that deliver to both foodservice and retail customers) at the end of this week/early next week. The size of their beef orders over the coming week will likely dictate whether the market has already reached its peak in prices, or if prices will continue on to a market peak leading up to the 4th July holiday period.

Tight imported beef supplies will also support a rising market over coming months, as imports of US beef tend to seasonally decline in July and August.

Australia though appears to have recently ramped up exports to the US, with May data showing the highest monthly volume sent to the US in 12 months, at 23,871 tonnes swt (although this volume is steady on the same time last year). Imports from Canada and Mexico remain above year ago levels.

Markets begin winter price run

4/06/2010

The seasonal May/June cattle price low appears to have passed, with markets again boosted by widespread rains this week.

Lower yardings and good restocker and feeder interest saw rises across the young cattle categories this week, with the EYCI lifting 4.5¢, to 349¢/kg cwt (8% higher than last year). The drop in monthly average prices between February and May was minimal this year (1% for the EYCI), as a falling A$, rising US prices, recovering feedlot demand and May rains helped to ease the normal market pressure from pre-winter culling.

Over the past five years, the EYCI has lifted 10% between May and its winter peak in August. If this occurs again this year, the EYCI would approach 380¢/kg cwt by August - its highest level since the records of winter 2005.

The impact of this week's rains on sheep and lamb markets has been even more pronounced, following a 10% fall in lamb yardings and almost 20% for sheep. Most prices lifted by around 3%, and a fall in yardings of Merino lambs saw prices up 6% for that category.

With sheep yardings now almost 60% lower than a year ago, and strong restocking interest, prices again posted record levels, with the national indicator at 411¢/kg cwt by Thursday, 50% higher than a year ago.

OIE grants Korea a controlled risk status for BSE

3/06/2010

Korea has been internationally recognised as a "controlled risk" country for bovine spongiform encephalopathy (BSE), or mad cow disease, by the world organisation for animal health, OIE (Chosun Ilbo).

The new status means that Korea is considered to have adequate surveillance for the disease and the ability to prevent an outbreak of the disease - through extensive supervision of animal feed and quarantine measures from breeding to processing cattle (Dong-Ah Ilbo). The ruling means that Korea will be allowed to export beef to countries where import policies follow OIE standards.

While acquiring the new BSE status, Korea has been battling with foot-and-mouth disease (FMD) this year. The last outbreak of this highly contagious virus was reported on 7 May, with 11 outbreaks since the disease reappeared on 9 April this year. However, the head of the OIE said that Korea is now controlling the FMD virus (Agra-Net).

Beef exports hit 14-month high

3/06/2010

Australian beef exports continued their steady recovery during May, hitting a 14-month high, with increased shipments to the US, Russia, Korea and Taiwan. Exports for the month, at 85,762 tonnes swt, were up 4% year-on-year, assisted by higher cattle slaughter since late April and a drop in the A$ throughout the month.

A feature for the month was the increase in exports to the US, at 23,871 tonnes swt - the highest monthly volume since May last year and 45% above average shipments in March and April. However, while shipments for the month were assisted by more lucrative returns from the US, with import prices averaging 12-30% higher year-on-year for manufacturing beef products, shipments for the month were still comparatively low historically, down 15% on the average for the past five years.

Reflective of a very slow production start to 2010, Australian beef shipments to the US were still 35% below year ago volumes for the first five months of 2010 - still the lowest level since 1996.

After a relatively steady March and April, exports to Japan for May declined 10% year-on-year, to 30,754 tonnes swt. Trade conditions to Japan remain tough, as the economy and consumer demand continues to struggle. However, a reduced supply of grainfed cattle impacted shipments for the month, with total grainfed beef shipments falling 12% year-on-year, with chilled shipments back 18%.

Korea continues to be a robust market for Australian beef in 2010, even with increased competition from US beef. Exports for May reached 10,831 tonnes swt, an increase of 36% year-on-year, with exports for January to May up 18% on the same period last year.

Despite some reports of sluggish buying early in the month, Australian beef exports to Russia reached 4,988 tonnes swt during May, as supplies from traditional South American suppliers continue to remain tight, namely Argentina.

Taiwan and the Philippines were another two markets to record an increase in Australian shipments during May, up 18% and 29% year-on-year, respectively. Shipments to Indonesia have cooled off in recent months, with exports for May back 18% year-on-year, to 2,490 tonnes swt.

For the first five months of 2010, Australian beef and veal exports were back 9% year-on-year, at 348,883 tonnes swt.

Australian consumer confidence drops

3/06/2010

Australian consumer confidence decreased 8.1 points in a week to 115.1 points on the weekend of 22-23 May 2010. Despite the fall, the consumer confidence index remained 10.9 points higher than a year ago, according to the weekly Roy Morgan Consumer Confidence Rating.

Driving the fall were the large falls in four out of the five components of the confidence index following the turmoil in global stock markets. Sharp falls in the Australian stock market, the A$ and the continued debate about the government's proposed mining super profits tax also contributed to the softer sentiment.

According to Roy Morgan, the biggest driver in the fall was the falling confidence about the year ahead, with only 36% of Australians (down 6 percentage points) expecting ‘good times' for Australia as a whole over the next 12 months and only 38% (down 6%) of Australians expecting their family to be ‘better off financially' this time next year.

Japan economy tough, but beef consumption firm at home

3/06/2010

Japanese families have been spending less on meat purchases, but eating slightly more beef at home, according to data by Japan's Ministry of Internal Affairs and Communications (MIC).

The average Japanese household spent 6,030 yen (A$70) on meat purchases in April, down 3.1% compared with the same time last year. The year-on-year fall has been consistent for the last 13 months, as the market suffers from persistent deflation. The latest consumer price index (April) fell 1.5% from a year ago, recording the 14th consecutive monthly decline. The government believes that the economy "has been picking up steadily" (May economic report by the Cabinet Office of Japan), but it still "remains in a difficult situation".

Per household beef expenditure has also been impacted by the slow economy, with average expenditure trending down year-on-year since December 2008. Beef purchase volumes, however, have exceeded the previous year for the last 12 months, with the latest April figure showing purchases averaging 565 grams per household (up 3.7% from 2009). This indicates soft but steady demand for beef among Japanese families, despite the deflationary economy and subsequent decline in beef retail prices.

There has been no evidence of reduced beef consumption due to the recent outbreak of foot-and-mouth disease in Japan. Yet, the trade is carefully monitoring consumer reaction, as the government works around the clock to contain the further spread of the disease.

BIGGEST PIE LAUNCH EVER  

FOUR'N TWENTY LAUNCHES 100% ANGUS BEEF PIES

Four'N Twenty, the nation's iconic meat pie brand, has launched its new Legendary Angus Beef range made with 100% Certified Australian Angus Beef.  And it will splash the Angus brand across the nation in a $1.7 million advertising program.

In an exclusive agreement with Certified Australian Angus Beef, Four'N Twenty will be the only meat pie licensed to use CAAB endorsement across retail and convenience markets.

Patties Foods Ltd, Australia's largest meat pie producer and owner of Four'N Twenty, says the marketing campaign behind its Legendary Angus range will be the biggest media launch the pie category has ever seen.

Greg Bourke, Managing Director of Patties Foods Ltd, says the Four'N Twenty Legendary Angus is a knockout product that will drive true category growth, attracting new and past users to on-the-go hot food.

"100% Certified Australian Angus Beef is the tenderest, juiciest and tastiest beef on the market.
"Our Four'N Twenty Legendary Angus Beef pie range offers a superior taste that no one with an honest appetite for pies can possibly resist.

"Blind taste tests have shown that the Legendary Angus pie is significantly more liked, encourages greater intent to purchase, and is clearly preferred over a major competitor offer", Mr Bourke said,

The new range of 220g Four'N Twenty Angus Beef pies will be available in three varieties, Legendary Angus Beef, Legendary Angus Beef and Pepper and Legendary Angus Beef, Cheese and Bacon. Recommended retail price is $3.95.

CEO of Certified Australian Angus Beef, Phil Morley, applauded the new Four'N Twenty Legendary Angus Beef pie as another great product using Australia's best beef.

"Angus beef is the best tasting, juiciest and most tender beef on the market.

"It's great to see two Aussie legends getting together - Certified Australian Angus Beef, and Four'N Twenty," Mr Morley said.

The launch of the Four'N Twenty Legendary Angus Beef range is being supported by an integrated advertising campaign with over $1.7 million investment in TV, Radio, On-line, Stadium and Point-of-sale.

View Patties "Message to Pie Lovers Video"

Bring back the stock squad

SA Farmers Federation wants the stock squad reinstated to combat continuing livestock theft says Stock Journal and says a specialised unit must include officers familiar with NLIS and saleyard operations.

While it has been more than two decades since the stock squad last operated, SAFF livestock committee chairman Andrew Ogilvie says that a small team which truly understands the industry could be effective.

Beltana Station's Graham Ragless and Laura McDonald says they have "hit a brick wall" when dealing with police about the alleged theft of cattle from their pastoral holding and despite receiving an NLIS warning the matter remains unresolved.

But Police minister Michael Wright says he is confident the systems SA police have in place to investigate stock theft are effective and that he is advised the number and frequency of incidents reported "does not warrant the establishment of a specialised livestock squad at this time".

Historic Kidman property for sale

Quinyambie Station, one of SA's largest pastoral leases and part of the S Kidman & Co's beef cattle empire - has come onto the market with Elders Real Estate according to a report in the Stock Journal.

The 1.21 million hectare property has been part of the Kidman business for 94 years but is being sold to enable the company to invest more money into its northern breeding country.

The paper says that in the north east corner of the State, Quinyambie is 160 kilometres from the regional hub of Broken Hill and stretches 230 kilometres between its northern and southern boundaries.

Quinyambie has been aggressively destocked because of two dry seasons and last year's fierce dust storms but its seasonal fortunes have changed with 250 millimetres falling since the start of this year. It has averaged 9000 cattle for the past 20 years.

‘Grassed-up' SA producers stock hungry

Grass driven livestock producers and their agents are hitting the roads in a national search for store cattle and breeding ewes, often hauling them thousands of kilometres back to their new homes in SA says Stock Journal.

In the past three months more than 200 decks of station cattle have been bought by Broken Hill pastoralists from the drought-stricken Pilbara areas of WA and the NT around Alice Springs.

Just eight months ago many of these pastoralists were forced to truck out their own stock after devastating dust storms destroyed feed. But after receiving 150-200 millimetres of rain earlier in the year stock are now being bought back in.

Elders national livestock manager Chris Howie says producers faced with a seasonal shortage of cattle are prepared to pay high freight costs to find them and where possible are sourcing smaller cattle to maximise numbers to freight.

Supersize yardings push Carcoar to limit

Supersized yardings are becoming run of the mill at Carcoar's Central Tablelands Livestock Exchange (CTLX) according to a report in The Land, pushing its superyards to their holding capacity.

In March the complex yarded 4010 store cattle, in April it was the record-setting Blue Ribbon Weaner Sale, which attracted 9553 weaners and by mid May there were as many as 6000 store cattle arriving for sale.

McCarron Cullinane director Lindsay Fryer, Orange, says that the pulling power of CTLX is huge, and although larger yardings could sometimes mean less coin, the prices at the yards are as good as anywhere - if not better.

He says for the past few monthly cattle sales the prices have held up really well and he has been more than pleased with results and is not expecting any slowdown during June, tipping yardings up to 5000 head.

Big rush for Russian business

The Russian bear might have awoken after 18 months of hibernation, with explosive growth being recorded in beef imports out of Australia and the US in the past three months says The Land - but the boom has to be seen in perspective.

Exports to Russia for April totalled 4107 tonnes, which the paper says was a dramatic rise from 1150 tonnes the previous month and just 870 in February - but pale when compared with 8246 tonnes in April 2008.

The paper says although they are still easily the best trade figures recorded since the country went into economic meltdown following the onset of the global financial crisis in mid-2008.

Russian Meat Importers Association chief executive Sergey Yushin says in his view the biggest market potential remains in frozen product, over chilled, because of Russia's huge distances and logistical problems in getting product around.

Japan hit hard by FMD

Japan is now battling a foot and mouth disease outbreak of major proportions according to The Land, with latest reports suggesting more than 80,000 pigs and cattle are likely to be destroyed in an effort to rein in the epidemic.

The paper says that in the past few weeks the disease has continued to spread dramatically, with the infection now being confirmed on approximately 100 farms on the southern island of Kyushu.

About 20,000 cattle and pigs have already been destroyed and while the outbreak has been confined - so far - to the prefecture of Miyazaki this is also one of Japan's better known Wagyu areas.

Of particular concern is the destruction of 49 of the prefecture's 55 approved Wagyu artificial insemination sires and the remaining six have since been removed to an isolated location. A formal closure of beef exports has now been imposed.

Beef anger at exam bias

Red meat producers are starting to voice their anger over high school children being "ideology bashed" by anti-cattle literature presented in an important exam according to a report in The Land.

Meat and Livestock Australia has heavily criticised an article in the controversial NAPLAN exam, which told Year 7 students that livestock contributed more to climate change than the coal industry.

MLA spokesman David Pietsch told the paper that the government-written examination also included information that was "biased", "misleading" and contained a series of "incorrect facts".

Pietsch says it has "naturally" got producers quite upset, and there are various letters going to ministers on the issue. Some of the claims producers say are incorrect are the details extolling the virtue of "roo over moo".

AACo looks south to spread the risk

The embattled Australian Agricultural Cattle Company (AACo) is to move a third of its 200,000 head breeding herd south to northern NSW and southern Queensland says The Land in a bold strategy to spread exposure to seasonal risk - and cut costs.

AACo will sell the 70,000-80,000 head to a newly formed financing partner, which in turn will lease the stock to selected breeders on the condition they sell the calves back to AACo.

The paper says that the new "alliance partnership" is likely to involve about 20 cattle producers based between Dubbo in NSW and Longreach in Queensland breeding AACo genetics on behalf of the big beef company.

The young progeny will then be on-sold as weaners to nearby markets, saving AACo as much as $40 a head in strategic freight advantages over the weaners bred and freighted from the company's northern Australian stations.

JBS Swift beef earnings boom

JBS Swift's combined US and Australian beef operations have reported a record first quarter earnings result on the back of the current boom in wholesale prices in the US domestic market and expanding global sales says Queensland Country Life.

The company's American Beef division, which includes its Australian operations, has reported first quarter net revenue of $US2.83 billion, up 5.5 pc on the same quarter last year. That represents 40 pc of the company's global net revenue for the period.

The US Beef division's earnings before tax of $US170 million was also a new record for the quarter. That figure was up a startling 185 pc on the previous year's first quarter, primarily because of higher beef prices.

According to industry analyst Steve Kay wholesale beef prices in the US have risen at least 11 pc since mid-March and with overall slaughter down 2.3 pc to 1.93 million head it shows profit levels are purely price driven.

Hunt for red meat heroes

Queensland Country Life is asking do you know a beef producer, processor or retailer, or restaurants, exporters or service providers who deserve to be honoured for their contribution to the red meat industry.

In other words, the paper asks do you know someone who has worked hard to make the red meat industry sizzle for their whole career, and/or have contributed significantly to the wider industry.

These are also the questions AgForce and Rabobank are asking as they join forces to help showcase excellence in Queensland's red meat industry at the annual Red Meat Awards, which will be announced at the 2010 Ekka.

The awards will be held on Wednesday August 4 and nominations for a range of categories, covering every stage of the production chain, are open until July 5. More details are available from AgForce on 07 3236 3100.

Drought-free Queensland on the cards

Queensland has all but shrugged off its dry and dusty image of the past decade according to a report in the Queensland Country Life, with only 1.4 pc of the State still officially in drought.

The paper says that in the aftermath of this year's drenching wet season, the State's Primary Industries minister Tim Mulherin has just revoked the drought status of a further 15 shires.

Mulherin says that drought-declared areas now only include parts of two local government areas - Banana Regional Council and Goondiwindi Regional Council - and all of Toowoomba Regional Council.

The State's drought status is a far cry from the same time last year when a devastating 35 pc of Queensland was covered by drought declarations - in a topsy turvy summer many producers have gone from drought to record floods.

Top beef show keeps growing

A growing reputation - together with a multitude of seedstock and carcase exhibits and trade stall on display - has catapulted National Beef, Bendigo, to its position as one of the eastern states premier beef events says Stock and Land.

This year 200 exhibitors and 800 head of cattle were paraded through the various rings - with 140 of these sidelined for the carcase competition and 660 to be judged in the breed classes.

Despite difficult seasons in recent years, committee chairman Richard Ham says the event is continuing to grow its market share and the committee is continuing to put together an event attractive to exhibitors and the broader industry.

Ham says local and royal shows don't have the critical mass of cattle which you will get at a specialist event such as National Beef - "we run a specialised beef event with a very clear focus on beef breeds".

US boosts its stake in beef

Richer economies appear to be regaining their taste for US beef according to Stock and Land with the US Meat Export Federation reporting during the first quarter of 2010 exports were up 22 pc on volume on a year ago to 157 million kilograms.

The paper says that those exports are boosting prices 10-15 pc for US producers this year - an increase it says is expected to soon reach consumers via the retail shelves in supermarkets.

Exports of US beef amounted to 10.6 pc of production in March, compared with 9.4 pc a year ago, with the industry actually recovering from two recessions - the worldwide economic downturn and the 2003 BSE crisis.

At the time of the BSE crisis exports amounted to more than 13 pc of US production but by 2004 that had collapsed to just 3.7 pc. They had recovered to 11 pc by 2008 before slumping again because of the global financial crisis.

MLA UPDATE

Friday daily livestock article

28/05/2010

Numbers declined at Roma prime by over 50% helping to maintain strong competition. Plain heavyweight yearling steers sold 2¢ dearer at around 165¢/kg. Heifers were dearer by 6¢ to 9¢ topping at 178¢/kg. Bullocks to slaughter held firm at 175¢ while heavyweight cows sold 7¢ stronger at 151¢/kg.

Dubbo also had a yarding that was well down after rainfall in some of the supply area. Medium weight vealer steers to restock sold around 200¢, realising gains of 2¢/kg. Heavyweight yearling steers to feed slipped 3¢ - to 182¢ while those to slaughter were 3¢ higher at 186¢/kg. Heavyweight grown steers were slightly dearer at 182¢ as medium weight cows were mostly firm selling around 139¢/kg.

At Bairnsdale numbers remained similar to last week and quality was slightly down. Heavyweight vealer steers sold to strong trade competition making from 191¢ to 208¢/kg. Yearling heifers were mostly dearer, medium weights to slaughter made around 175¢/kg. Heavyweight grown steers lifted 3¢ to 176¢ as heavy D4 cows made from 142¢ to 155¢/kg.

The Eastern Young Cattle Indicator settled at 344.5¢ after Thursday's markets, 3.5¢/kg cwt up on last week. Trade steers were down 1¢ at 185¢ as feeder steers jumped 2¢ to 185¢/kg. Export grades were strongly sought after with Japan ox lifted 3¢ to 181¢ and US cow was 2¢ dearer at 133¢/kg.

Numbers increased slightly at Wagga and quality was varied. Trade lambs to feeders lifted $2 to mostly sell at $119/head, whilst those to the trade held firm at 511¢/kg cwt. Heavy lambs gained up to 9¢ and more in places as most pens averaged 504¢/kg cwt. Merino ewes to the trade were $5 cheaper at $110/head and settled at 446¢/kg cwt.

The eastern states restocker lamb indicator eased 19¢ on last week to settle at 511¢/kg cwt. Merino lambs slipped 6¢ - to 443¢, while light lamb was 5¢ dearer at 462¢/kg cwt. Trade lambs settled at 510¢, to be 8¢ stronger and heavy lambs lifted 13¢, settling at 496¢/kg cwt. Mutton gained 3¢ finish on 406¢/kg cwt.

Japan FMD claims Wagyu bulls in Miyazaki

27/05/2010

The unprecedented outbreak of food-and-mouth disease (FMD) in Japan claimed its 200th case this week (as of 24 May), all confined to the Miyazaki prefecture (located in Kyushu region, southern Japan).

As the locals and veterinarians work around the clock to contain the disease, the Japanese beef industry is closely monitoring the destinies of 49 highly prized Wagyu stud bulls that the Japanese ministry of agriculture has advised the Miyazaki prefecture to slaughter.

Miyazaki is known for its premium quality Wagyu bulls, distributing semen from carefully crafted, high performance bulls to other cattle regions in Japan. The government has concluded that the bulls need to be culled, following the discovery of FMD in the livestock improvement centre where they are housed.

In the meantime, there has been no discernible impact on beef consumption or supply in the Japanese market due to the FMD outbreak. From late May to the end of June is traditionally the quietest period of the year for meat consumption. This has been accentuated this year by continued subdued consumer spending resulting from the economic downturn. Nevertheless, the trade has been monitoring consumer trends carefully, with some anticipating a potential impact on consumer attitudes if the disease continues to spread.

Average Wagyu carcase prices fell for A5 and A3 categories this week (Tokyo Meat Market), but it is too soon to regard it as a result of the FMD, according to the trade sources.

Korea's imported beef market grows 16%

27/05/2010

Korea's beef imports increased 16% year-on-year over the January to April period this year, totalling 80,522 tonnes swt. Frozen beef imports grew 15%, while chilled imports increased by 25% compared with last year (KITA).

Imports of Australian beef rose 6% from January to April this year compared with the same period last year - totalling 41,836 tonnes swt. While volumes were up, Australia's imported beef market share decreased to 52%, down five percentage points on last year.

Beef imports from the US increased to 24,513 tonnes swt this year (up 45% year-on-year). Imports from New Zealand lifted 11% year-on-year, totalling 13,231 tonnes swt. Over the period, US and New Zealand share of Korea's imported beef market totalled 30% and 16%, respectively.

Low US meat inventories

27/05/2010

US beef, pork and poultry cold storage inventories stood at 1.902 billion pounds as at the end of April, 16% less than a year earlier and 10% below the five year average, according to data recently released by the United States Department of Agriculture (USDA).

Boneless beef stocks, at 314.4 million pounds, were 9% below both the same period in 2009 and the five year average. Contributing to the reduced storage levels has been lower imports of beef so far in 2010 from Australia, NZ and Uruguay, along with higher US beef prices, which has reportedly seen many end users further reducing inventories in April.

Wholesalers have shown a reluctance to hold large meat inventories after the events of 2008 and 2009, when a volatile exchange rate and sharp demand slowdown left many operators in very difficult situation. As a consequence, many end users are entering the grilling season with much lower inventories than usual, which could result in sustained price pressure if demand improves

So far this month, the spot price for imported 90Cl Australian beef has averaged 172.5US¢/lb, 29% higher than the same period in 2009.

Heightened demand helps hide values higher

26/05/2010

Australia exported 1.9 million cattle hides over the first three months of 2010, 53% less than the same time a year earlier. Lower exports were due to much tighter supply - with adult cattle slaughter back 6% to 1.8 million head over the same period due to heavy rains and flooding limiting (and in some cases preventing) cattle turnoff in northern NSW and Queensland - as well as some buyer resistance to the sharply higher prices on offer for cattle hides (Australian Bureau of Statistics).

Despite a steep drop in the number of hides shipped, the A$ value of these exports surged 19% over the same period to $60.8 million for January - March 2010, on the back of vastly improved prices for cattle hides.

Hide prices have steadily lifted this year after bottoming out in early 2009, with the sense of panic, fear and dramatic slow-downs that engulfed the global leather processing and manufacturing industries as a result of the GFC gradually unwinding. This in turn has improved demand, allowing importers and processors alike to work through large stockpiles as trade resumes.

Hide prices in May - which have also been helped this year by lower cattle slaughter figures - are now averaging around 56% higher year-on-year for wet-blue hides (tick-free), and well over 400% higher for green hides, which were particularly affected by events last year (MLA's NLRS). Despite this, prices still remain low in a historical sense.

US back on the burgers

Australian beef is now selling in the US for prices almost 30 pc higher than it was four months ago according to The Land as the American cow herd declines to its lowest level since 1949.

The paper says that the price of our hamburger grade beef going to America, Australia's second-largest beef buyer, has jumped a whopping 27 pc since the start of the calendar year.

While the Australian dollar has skyrocketed from US71 cents to as much as US92 cents in the past year, making it more expensive for Americans to eat Australian beef, the demand for, and price of, our beef has continued to rise.

Australian exporters are now in the position of being able to charge their US customers an average of 12 pc more during April than they were able to at the same time last year.

Last roll of the dice for Casino?

One of the State's largest beef cattle selling centres, the Casino Regional Livestock Exchange, may soon be on the market and The Land says there is little doubt at a local level private ownership will mean increased fees for producers.

The 44-hectare complex on the northern side of the town, billed as the State's Beef Capital, is owned by the cash-strapped Richmond Valley Council, which has posted preliminary budget estimates for this financial year showing it is $500,000 in the red.

After receiving inquiries from two potential buyers the council - which has put a $9 million pricetag on the property - held a public meeting to garner feedback from the wider beef industry.

Only 60 people took the time to turn up, which Mayor Col Sullivan told the paper was disappointing given the size of the region's beef industry and the numbers that will be affected if the complex changes hands.

Red meat's new environmental blitz

The Australian red meat industry has launched an ambitious new communications campaign designed to drive its key environmental messages into the heart of the broader community says The Land.

The $300,000 media blitz - by far the most significant environment-related community awareness initiatives tackled by MLA - will run in metropolitan daily newspapers in the run up to International Environment Day on June 5.

The paper says the campaign is expected to reach an estimated audience of 12.7 million, with the first round of advertising run last week and the second round appearing around the country this week.

MLA managing director David Palmer says the key message is that Australian beef and sheepmeat industries can be trusted because they can demonstrate their credentials in management practices and custodianship of the land.

It's mythbuster time

A report in The Land says busting many of the myths about red meat's environmental foot print will be one of several roles for the new website launched last week as part of MLA's new Red Meat Green Facts campaign.

The paper says that the site - www.red,eatgreenfacts.com.au - will be operated as an independent and standalone domain, and not be seen simply as an extension of other MLA websites.

The site is designed for people wanting to know more about the red meat industry's environmental credentials, setting out facts in key areas including land, water and air-based environmental issues, from the breeding and growing, lotfeeding and processing perspectives.

It includes a series of information layers, ranging from simple, easy-to-understand information to the more technical, science-based facts designed to counter many of the recent myths about the environmental impact of beef production.

Shoppers sold on meat but more and more thinking ‘green'

While Australians generally have a positive view towards the environmental responsibility of livestock producers, a new national Rural Press report says that they also see beef production as having the highest impact on the environment relative to other meat protein options.

The report says that is just one of a host of findings from a major survey commissioned by Meat and Livestock Australia and carried out as part of the lead-up to the launch of the Red Meat Green Facts campaign.

The survey involved extensive consumer research across all the Australian capitals, the idea being to better understand broader community perceptions about beef production and its impact on the environment.

The research was conducted in January and February across a diverse sample of more than 750 respondents, with about two thirds saying they were either "very" or "extremely" concerned about the environment. The good news is this figure is about 10 pc lower than similar surveys conducted in 2007.

Ag fund beefs up in the south

Superannuation investment is replacing the widely-discredited managed investment scheme (MIS) model as the owner of a large-scale beef cattle enterprise on Tasmania's King Island says The Land.

The Melbourne-based Sustainable Agriculture Fund (SAF) headed by Frank Delahunty has emerged as the walk in, walk out buyer of Great Southern's King Island grazing properties.

The paper says that Elders negotiated the sale of the four-property aggregation, with SAF paying $27 million for a total of 16,700 hectares along with 6500 head of Angus cattle and all the farm plant.

SAF was established in 2007 to attract superannuation funds into agricultural investment and in February this year it also took delivery of two Great Southern properties in north Queensland as well as one at Goondiwindi and another at Croppa Creek in NSW where it is already sowing a winter crop.

CAAB keeps on growing

The growth of Certified Australian Angus Beef (CAAB) continues says a report in The Land with the appointment of Alison Schofield as supply relationships co-ordinator based in Brisbane to cover the significant Queensland market.

The paper reports CAAB executive officer Phil Morley as saying the new staff appointment will further provide support to the brand's licensed distributors, retailers and food service customers.

He says Schofield's experience in customer-focused roles will equip her well to drive the expansion of CAAB and Angus Pure in the Queensland market, and provide Angus brand support, including processors supplying the successful McDonald's Angus burger program.

Schofield has a Bachelor of Science (Agriculture) and Bachelor of Applied Science (Equine) combined with a background of working in client liaison and customer service as an MLA project officer.

Grazing a top climate solution

The Land says livestock and pastoral systems have a major role to play in climate change mitigation according to a review released by the United Nation's Food and Agriculture Organisation (FAO).

The report says grasslands cover 70 pc of the world's agricultural land, more than a billion people depend directly on livestock for their living and rangelands store as much as 30 pc of the world's soil carbon stocks, plus carbon stored above ground in shrubs and trees.

Some 18 to 28 billion tonnes of carbon is estimated to have been lost as a result of rangeland degradation, and overgrazing has been estimated to release as much as 100 million tonnes of carbon dioxide every year.

The report's author says in view of the vast extent of grasslands and rangelands and the degraded nature of large areas of these systems, the potential to sequester carbon through improved livestock and management practices is significant.

Roma hosts grand Angus forum

The Angus breed has enjoyed outstanding growth in recent times according to a report in Queensland Country Life and will come under the spotlight with its Queensland Angus Forum in Roma on June 9.

It has achieved what the paper says is an arguably unequalled level of consumer recognition throughout a range of markets and the breed is proving to be adaptable and commercially viable in Queensland.

The Queensland Angus Forum in the Roma Bungil Cultural Centre presents a first-time opportunity for Queensland beef industry members to experience valuable information and discussion on Angus cattle from a panel of highly-regarded speakers.

They include Senator Barnaby Joyce, JBS Swift livestock manager Brett Campbell on Angus premiums in the marketplace, Australian Lot Feeders Association president Jim Cudmore on Angus in the feedlot and CAAB CEO Phil Morley on the branded beef success story.

PIC ‘rumour' concern

According to a report in the Stock Journal, livestock producers are becoming increasingly concerned they may be forced to pay for the registration of property identification codes (PIC).

While the rumour is circulating at a rate of knots, PIRSA has not confirmed or denied the claims, saying only that an agreement for implementation of a payment had been agreed several years ago.

SA Farmers Federation livestock executive chairman Andrew Ogilvie says he has also heard that farmers could be charged to register a PIC and says if it does happen SAFF will "lobby vigorously against it".

While farmers contacted by the paper had no recollection of any previous agreement for the introduction of charges, a PIRSA spokesperson says livestock industries agreed in 2003 to the introduction of cost-recovery for the allocation of PICs.

BJD change confuses farmers

Changes made to the Bovine Johnes Disease (BJD) testing rules in March have created some confusion in the cattle industry and left dairy farmers in particular concerned with cattle purchased interstate says Stock Journal.

Early last year the SA government introduced compulsory BJD testing of all dairy cattle travelling into SA from other states - but that is a requirement which has since been abolished.

However, the paper says that now testing and management subsidies will still be made available to assist producers in that testing process - for a requirement which in theory no longer exists.

But PIRSA BJD coordinator Jeremy Rogers says the rule was not dropped - just ignored by so many it became hard to enforce. He says while the majority of SA herds have been tested, and are not infected, the control was causing a lot of angst with Victorian producers wanting to sell cattle into the State.

Award-winning Hopkins River Beef bound for SA

Adelaide's fine diners will be able to indulge in award-winning Hopkins River Beef according to the Stock Journal with the brand launching its first primal cuts into the SA market last week.

Hopkins River Beef director Adam North says about 15,000 cattle - mostly Angus - are marketed through the brand each year as either yearling grassfed product or finished in the feedlot for 110 days on almond hulls and assorted grains.

The brand was launched more than a decade ago by the Maconochie family at Dunkeld, in Western Victoria, and in 2008 it took out the grainfed class in The Age's Epicurean Battle of the Beef Eaters competition.

The paper says Hopkins River Beef is now used by about 200 of Victoria's leading restaurants, including Jacques Reymond Restaurant, Grossi Florentino and Pearl in Melbourne - and The Royal Mail Hotel in Dunkeld.

Healthy soils, top cattle

Hillcrest Pastoral Company business manager Bruce Creek is keen to test the theory "you are what you eat", or, says Stock Journal, a "healthier soil will produce healthier pastures and healthier animals".

If the first year's results of a three-year trial on his South-East property, comparing biological and conventional fertilisers, are anything to go by, he may have found the answer to a more sustainable grazing system.

The biologically-treated paddocks had a noticeably longer growing season than the neighbouring paddocks, treated with 100 kilograms per hectare of single super and grew higher-quality pasture.

Importantly, Bruce says during a 53-day trial last spring, steers grazing the biological paddock had an extra 244 grams a day weight gain than the neighbouring conventionally treated paddock - and both were stocked at 17DSE per hectare.

Late weaners need twice the food

Delayed weaning programs can negatively impact on the potential feed efficiency of beef cattle once they are moved into a feedlot situation according to a report in the Stock Journal.

And the paper says that according to veterinarian and Livestock Central director Rick White, cattle weaned late require nearly twice the amount of feed and also have poor milk production.

Speaking to producers at the recent Meat and livestock Australia Southern Meat Profit Day, White told them that weaning 50 days earlier than usual can save them about $18 a head.

White says premium returns are available when preparing cattle for a feedlot and producers need to recognise that backgrounder or feedlot customers want properly weaned and socialised animals.

Make plans on indicators

Market indicators provide a wealth of information for producers to make better informed decisions says Stock and Land but the problem is understanding what is available and converting it to make better informed trading decisions.

That was the message from producer Charlie Goode, Silverton Partnership, Naracoorte, SA and consultants delivered to participants at the recent MLA Southern Meat Profit Day.

They say indicators provided by the National Livestock Reporting Service - their quality, depth and complexity - are incredibly valuable and data provided enables producers to run their farms as a business - if they successfully sift the information.

But by monitoring and measuring their current situation with their historical performances, producers could better predict their future and make genuinely educated management decisions.

MLA UPDATE

Beef trade as usual in Japan despite FMD

21/05/2010

Japan's Ministry of Agriculture, Forestry and Fisheries has reported the 159th case of the foot-and-mouth disease (FMD) in the current outbreak, all confined to the Miyazaki prefecture (located in Kyushu region, southern Japan). The government's FMD Countermeasures Headquarters advised the local administration to slaughter cattle and pigs within a 10km radius of the movement restricted areas.

The government also announced that it will provide financial support to farms that were impacted by the outbreak. Over 110,000 animals were already slaughtered or scheduled to be culled (as of 17 May), according to Chikusan Nippo.

Despite the increasing number of cases, there has been no visible impact to meat consumption in Japan so far. Retailers and foodservice outlets continue to sell beef, while the wholesale market has been trading as usual. The Japanese domestic carcase and wholesale beef prices have been stable, but the trade is monitoring the situation very closely.

Beef exports from Japan remain suspended, with exceptions of Hong Kong and Macau.

The fall in the A$ assisted to lift interest in Australian beef among buyers this week, with export prices to Japan easing across the board in US$ terms, due to both the depreciated currency and seasonally weak underlying demand.

A$ caught in European financial gloom

21/05/2010

The A$ has experienced one of its most turbulent weeks since the global financial collapse during the second half of 2008, as debt and financial concerns gathered pace throughout Europe. After starting May at over 92US¢, the A$ traded below 81US¢ by Friday - a drop of over 12%

Adding to the sell-off of the A$ throughout the week was a fall in Australian's consumer confidence during April, and other negative domestic economic indicators, which look to have significantly altered the forecast for further interest rate rises in 2010. The close A$ correlation to China growth, the mining sector and commodity prices, has seen it fall against almost all major currencies since the latest global financial shock. Since the start of May, the A$ has fallen over 15% against the Japanese yen, 7% against the Korean won, and 10% against the Indonesian rupiah.

In terms of the impact for the Australian red meat exports, while a lower A$ is very welcome, significant movement (either up or down) can result in buyer hesitancy in committing to forward orders. In 2008, when the A$ plunged from 98US¢ in late July, to 61US¢ by late October, a fall of 37%, trading became difficult for Australian exporters.

While it is still far too early to determine the overall impact of the recent decline in the A$, it can be assumed that Australian exporters would be more than happy to see the A$ remain lower - just without the extreme volatility of the past week.

Argentinean beef production curtailed

21/05/2010

Argentinean beef production during the March quarter dropped 19% year-on-year, to 644,879 tonnes cwt.

The decrease was mainly the result of the fall in grown cattle supplies since December. Additionally, the tightening in export restrictions by the government has hastened the closure of several export plants.

Beef production in Argentina also decreased during the March quarter in 2008 - the result of a general agricultural strike, as the industry protested against export tax rises and the government's interventions and controls in agricultural industries.

However, in 2009 production increased during the period, as a severe drought and the ongoing liquidation induced higher cattle marketings, as producers switched to other more profitable and less government-controlled agricultural enterprises.

The current fall in production has resulted in an 18% fall in average beef consumption to 56.5kg/per capita a year (CICCRA).

According to the Argentinean Beef Industry Association, the domestic market has been affected to a higher extent, as exports decreased by a lower percentage than total production during the period.

Season deteriorating quickly

21/05/2010

Large parts of the pastoral regions stretching from southern Queensland to Victoria, SA and WA are in urgent need of widespread rain, following a generally dry April and May and the onset of wintery conditions. While too late to assist pastures in many areas, crops need rain to keep growing.

The poorer conditions are forcing more cattle to market, and overall quality is dropping, leading to lower average prices. The strong export demand from cows and fall in the A$ is helping to hold cow prices close to their recent higher levels, despite increased numbers coming forward. However, prices for Japan ox continue to slip, with demand remaining seasonally poor in Japan, and any benefit from the A$ fall being rapidly eroded by imported beef price declines.

Despite continued lower year-on-year numbers and a fall in the A$, lamb prices slipped this week - by 1% for heavy lambs and 3% for trade and light lambs. The tight supplies of Merino lambs and continued strong restocker demand saw this category buck the trend, rising 2% to be almost 20% above last year.

Despite this week's declines, all lamb values remain at or near record levels, with further price rises anticipated this winter. Similarly, despite a 12¢ decline this week, mutton prices remain very high, testament to the strength of Middle East and restocker demand and the historically small flock.

Reduced numbers at Narromine

21/05/2010

Numbers were again hard to find at Narromine, with the yarding the smallest for many years. There were only a few pens of young cross bred ewes yarded, and only the one pen of young Merino ewes.

There was a fair selection of mixed age and older Merino ewes, mostly scanned in lamb. There was a single line of young Dohne Merino cross ewes and similarly just the one pen of wethers. Despite the smaller yarding, there was a reasonable crowd on hand, with strong competition in all categories. Buyers attended from Oberon, Orange, Gilgandra, Condobolin and Forbes, with strong support from locals.

The first cross ewe market was very solid. The best of the one year olds, which were March shorn, sold for $158/head. The balance of the one year olds sold from $110 for smaller ewes lacking condition, through to $147/head for good quality. A line of two and three year old ewes scanned in lamb sold for a market top of $170/head. Two pens of store lambs achieved $68 and $80/head.

Merino ewes also sold to strong competition. A pen of young ewes May 2009 drops, April shorn sold for $116/head. The best of the Merino ewes were a line of three to six year olds, 100% scanned in lamb to Poll Dorset rams, which sold for $145/head. A line of mixed age plain condition ewes and only 50% scanned in lamb sold for $82/head. The balance of the older Merino ewes mostly scanned in lamb sold from $104 to $131/head. There were some exceptional sales, with six year olds achieving $126 and five year olds selling to $131/head. There was a large line of 865, five and six year old ewes passed in. Buyers did not operate on these particular sheep due to a heavy burr infestation. A single pen of Merino Dohne cross ewes which were one and a half year olds, April shorn sold for $100/head.

The single pen of wethers was August and September 2009 drop, March shorn, sold for $75/head.

Steady Korean beef demand in 'family month'

21/05/2010

Australian beef exporters reported another solid week, as there has been steady Korean beef demand and enquiries. The month of May in Korea is known as ‘family month', with celebrations on official public holidays such as ‘children's day' and ‘Buddha's day' usually lifting overall beef consumption.

This week, wholesale prices for Australian and US short ribs increased again on last week. Beef traders in Australia confirmed that demand for Australian short ribs remains solid.

The wholesale price for a Hanwoo (domestic) carcase in Korea dropped for the fifth consecutive week as suspected cases of cattle infected with foot-and-mouth disease continue to come forward.

US buyers increasingly cautious

21/05/2010

The volatility in currency markets, and especially the A$, over the past week has seen many US buyers become increasingly cautious, with concerns remaining about the ability of US end users to absorb higher meat prices. US import beef prices were lower across all manufacturing items this week, with 90CL prices slipping back for the fourth consecutive week, down 3¢, to 163US¢/lb - but still 26% above the same period last year.

While the drop in the A$ more than offset the lower US prices for Australian exporters for the past week, buying is likely to remain tentative until some stability returns to the currency. However, the much higher prices year-on-year is starting to slowly see more Australian product sent to the market, after a very slow start to the year - with 11,900 tonnes sent to 17 May, around 30% higher than the April shipment rate.

Unseasonable north west rain

21/05/2010

Most of south eastern Australia experienced another dry week, as the north western region of Australia recorded an unseasonable May dump, with in excess of 100mm recorded across parts. While some good falls were experienced across parts of southern WA, the agricultural regions are still desperately waiting for season breaking rains. Widespread falls are forecast for much of the country in the coming week, including for WA.

Butcher sales stronger in April

20/05/2010

Butcher sales of all meat types were notably stronger in April compared with the previous month and remained steady (for lamb) to higher (for beef, pork and chicken) on a year ago. During the month, beef, lamb and pork prices averaged above April last year, while chicken prices were lower to steady compared with 12 months earlier, according to the latest MLA's butcher survey carried out by Millward Brown's National Field Services.

The upturn in sales during the past four months may indicate a regain in butcher popularity, as more consumers shop for fresh meat at local butcher shops. Beef sales at butchers were stronger in April, with 53% of respondents indicating ‘very good to excellent' sales, up from 46% in April 2009. Sales of lamb during April were firm year-on-year, as 43% of butchers mentioned ‘very good to excellent' turnovers.

Of the 100 butchers surveyed in April, 40% reported ‘very good to excellent' sales for pork compared with 31% in April last year. About 54% of respondents noted ‘very good to excellent' sales of chicken in April, a rise from 44% during the same time last year.

Argentinean beef production curtailed

20/05/2010

Argentinean beef production during the March quarter dropped 19% year-on-year, to 644,879 tonnes cwt.

The decrease was mainly the result of the fall in grown cattle supplies since December. Additionally, the tightening in export restrictions by the government has hastened the closure of several export plants.

Beef production in Argentina also decreased during the March quarter in 2008 - the result of a general agricultural strike, as the industry protested against export tax rises and the government's interventions and controls along agricultural industries.

However, in 2009 production increased during the period, as a severe drought and the ongoing liquidation induced higher cattle marketings, as producers switched to other more profitable and less government-controlled agricultural enterprises.

The current fall in production has resulted in an 18% fall in average beef consumption to 56.5kg/per capita a year (CICCRA).

According to the Argentinean Beef Industry Association, the domestic market has been affected to a higher extent, as exports decreased by a lower percentage than total production during the period.

What are the largest cattle and sheep regions in Australia

20/05/2010

Recent data released by the Australian Bureau of Statistics (ABS) profiled Australia's cattle herd and sheep flock by natural Resource Management Region (NRM) as at June 30 2009, and reinforced Queensland's dominance of the cattle herd. According to the ABS, the Australia cattle herd increased 2% in 2008-09, to 27.9 million head, while the national sheep flock declined 5.4%, to 72.7 million head.

Despite a 9% contraction in the Fitzroy NRM regions (surrounding Rockhampton) cattle herd to the year ending June 30 2009, its held onto its title as Australia's largest cattle region, with 2.6 million head. The influence of drought, flooding and cattle movements throughout the year saw movement in the ranking of next largest regions, with the Burdekin in Queensland jumping from fourth in 2008 to second as at June 2009, with 1.7 million head. The NT (no NRM classifications) fell one position to third in 2009, with 1.68 million head, followed by the Southern Gulf (1.5 million) and Desert Chanel regions of Queensland (1.4 million).

For WA, the Rangelands NRM, which takes in almost 90% of WA and 1.85 million square km had the most cattle, at 1.07 million head.

For the southern states, the largest cattle region in NSW was the Namoi NRM region (centred on Gunnedah), just ahead of the Northern Rivers, with 896,615 head, while the largest region in Victoria was the Glenelg Hopkins region (Hamilton), with 911,903 head. For South Australia, the South-East NRM had the most cattle, with 708,197 head, while in Tasmania; the North West recorded the most cattle, with 319,901 head.

For the sheep flock, the Glenelg Hopkins region of South West Victoria maintained its position as Australia's region with the largest number of sheep despite contracting 12% year-on-year, to 5.9 million head. The Lachlan (5.5 million), Central West (5.35 million) and Murrumbidgee (5 million) NRM regions of NSW were the next largest flocks by region, closely followed by three regions in WA, including the South West (4.8 million), Avon (4.5 million) and South Coast (3.6 million).

The ongoing decline in the WA sheep flock is best seen in the south west NRM region, which fell 22%, or 1.3 million head, for the year ending June 30 2009, to 4.8 million head - taking it from the nation's second largest flock by NRM 2008, to fifth in 2009.

Australian grainfed exports up in 2010

20/05/2010

Australia exported 68,018 tonnes swt of grainfed beef during the first four months of 2010, up 7% year-on-year, as feedlot turnoff increased throughout the first quarter (DAFF, ALFA/MLA).

Over the same four month period, Australian grassfed beef exports declined 17% year-on-year, to 195,104 tonnes swt, as heavy rain brought flooding and transport disruptions to large regions of Queensland and northern NSW. With the reduced grassfed cattle turnoff, total adult cattle slaughter for March quarter declined 6% nationally, which contributed to a 12% decline in exports for the same period, totalling 263,122 tonnes swt.

Shipments to Australia's largest grainfed market, Japan, declined 4% year-on-year, to 47,222 tonnes swt. Grainfed beef prices to Japan came under increasing pressure throughout the period, with the premium between grainfed beef, and cheaper grassfed beef, narrowing to their smallest margin in many years. With the reduced returns, Australian exporters looked towards other markets, with shipments to Korea lifting 48% year-on-year, to 10,837 tonnes swt, along with an 8% rise to the US, to 4,520 tonnes swt.

Grainfed exports also continue to expand to developing markets, where consumers preference for, and ability to pay for the premium product, continues to increase. Shipments grew 106% year-on-year to China, 60% to South East Asia and 215% to the Middle East, although total volumes still remain comparatively low.

Grainfed beef shipments accounted for 26% of all beef exports between January and April, up from 21% a year earlier.

Korea delivers strong returns for Australian beef industry

20/05/2010

In the first quarter this year, the value of Australian beef and veal exports dropped 25% year-on-year, largely due to lower exports and the significantly stronger A$, with declines in export value to major markets like the US (-52%) and Japan (-22%). However, the export value for the Korean market increased 5% during that same period (Global Trade Atlas).

Export value of Australian beef and veal to Korea totalled A$121,512 for the March quarter, compared with A$115,470 in 2009. The value of frozen beef dropped 5%, while chilled beef increased 22%.

Returns on chilled carcase remained unchanged for the quarter, while the value of chilled bone-in cuts dropped 6% year-on-year. The main driver behind the surge of export value to Korea during the March quarter was an increase in Australian boneless beef, which lifted 24% year-on-year.