TE MANIA ANGUS MEDIA SUMMARY - 21 May, 2013
New rules for sheep exports
SHEEP exporters to Kuwait will be required to employ supply chain officers. It comes after a federal government investigation into the slaughter of animals in a banned meat market says The Weekly Times.
The Department of Agriculture, Fisheries and Forestry investigation followed the airing of Animals Australia footage last year, which showed sheep being cruelly slaughtered in the Al Rai Market in Kuwait City.
Released late last week, DAFF's report found it was highly likely the sheep were exported from Australia under the Exporter Supply Chain Assurance System (ESCAS). However, the sheep filmed by Animals Australia were sold and slaughtered outside of an approved supply chain, in breach of the ESCAS, it said.
The department said three exporters had approval to export sheep to Kuwait, "however it was not possible to fully identify the sheep to a particular property, consignment or exporter based on the photos and footage provided".
Queensland farmers seek city support
FIRED up western Queensland graziers have taken to the big smoke to garner city support to protect their rivers – and long-term livelihoods – according to a report in The Weekly Times.
A public meeting in Premier Campbell Newman's Ashgrove electorate heard farmers and indigenous elders from Queensland's channel country explain what impacts the removal of Wild Rivers protections would have on the Lake Eyre Basin.
Grazier Bob Morrish said it would be foolish to believe government claims that any impacts from development would be minor. He said his grazing land and the tourist potential for the Lake Eyre basin would undoubtedly be impacted.
"I don't care which government it is, they can leave our bloody rivers alone," he said to unanimous applause. Morrish said the forum was just the first to inform city dwellers of the concerns because they had a bigger voice.
Landmark rabbit control win
GEELONG district couple want their court win against the Victorian Government over rabbits to embolden others to do the same. "This is a game changer for the Government,'' Colin Wilkin said at the Geelong Law Courts today.
Colin and Denise Wilkin are among the first to challenge what they have called a heavy-handed approach by the Government to rabbit control according to a report in The Weekly Times.
Magistrate Ann Garvie dismissed charges against the Wilkins brought by the Department of Environment and Primary Industries for failing to comply with a land management notice.
At the heart of the case was the department's claim the Wilkins had failed to adequately controlled rabbits on their Thompson Creek property. Magistrate Garvie today found they did. She also awarded legal costs against the department, which are still to be calculated.
Wilkin believes the department has spent almost $200,000 prosecuting its case against himself and his wife. "This money would have been better spent getting rid of some of the rabbits on their own land,” he said.
Live export trade fights back
THE live export trade has already hit back at a move by Independent MP Andrew Wilkie to ban the trade. Australian Live Exports Council chief executive Alison Penfold told The Weekly Times today that any move was “ignorant to the true impact”.
“People in industry and those who have opened their eyes to the consequences of such a decision, know the full and adverse impacts it would have on people, on jobs, on communities, on Australia and on our trading partners,” Penfold said.
“If at the heart of the ban is a view that shutting down the industry will improve animal welfare, then it is important to understand Australia’s withdrawal from the market will mean weaker global animal welfare standards for exported livestock. “
Penfold said Australia was the only one out of the 100 exporting live animals which was investing in animal welfare. And she said the argument that banning live export would generate more jobs was not logical.
Dollar hits 11-month low
THE Australian dollar has fallen to a fresh 11-month low. In a move which will be welcomed by Australian farmers, the fall comes amid continuing optimism about the US economy and negativity about the Australian economy, before rebounding slightly.
The Australian currency dropped to US97.97c in the early hours of Friday morning, a level not seen since June 2012. At 7am AEST The Weekly Times says the local unit was trading at US98.09c, down from US98.37c on Thursday.
US economic figures released early on Friday morning, Australian time, showed a sharp jump in weekly jobless claims while the number of housing construction starts fell 16.5 per cent in April.
US stocks fell after these figures were released. However, LTG Goldrock director Andrew Barnett said the Australian dollar's fall was not due to the economic data but because of a wider continuing trend.
Joint Tasman effort on FMD
AUSTRALIA has joined with New Zealand to fight foot and mouth disease. Federal agriculture minister Joe Ludwig and New Zealand's primary industries minister Nathan Guy recently announced the two countries would work more closely together to strengthen defences against the threat of FMD.
Ludwig said it posed one of the single greatest threats to the livestock industry despite Australia being free of the disease for more than 130 years. He told The Weekly Times a large outbreak would cost Australia $16 billion to control.
A trans-Tasman FMD action plan will be developed to ensure both countries are adequately prepared for the disease. Key activities include sharing intelligence on emerging health risks and developing and improving training activities and FMD detection capabilities.
Ludwig said prevention still remained the first priority for both countries.
This comes after the recent state budget set aside $4.7 million over the next two financial years towards better preparing Victoria for outbreaks of FMD.
Fracking laws lacking
VICTORIA urgently needs to tighten its mining laws before signing up to national guidelines for coal seam gas extraction. That's according to the Environment Defenders Office says The Weekly Times.
The advocacy group said the state had a unique opportunity to come up with comprehensive laws that allow fracking only where the impacts would be acceptable to the community.
EDO principal lawyer Felicity Millner said Victoria's mining laws did not require landholders to be informed when a mining company was licensed to explore for CSG.
"The laws do not ensure a thorough, independent assessment of the environmental impacts (of CSG)," Millner said.
"In NSW and Queensland, dangerous BTEX chemicals, which are carcinogenic and used in fracking, have been banned. Fracking is also banned within 2km of a town. Victorian laws provide no such protection."
Good signs for cattle market
THERE are some positive signs for the cattle industry by the middle of last week. The benchmark Eastern Young Cattle Indicator rose for the first time after a run of 12 selling days where prices fell.
The EYCI closed at 280c/kg carcass weight yesterday, up just 1.25c/kg, but a rise nevertheless. It was the first move into positive territory since April 29, with the market gradually slipping since then.
But the EYCI is still a staggering 109c/kg lower than it was this time last year.
Meanwhile, rain across much of Victoria and southern NSW is expected to help, too, when 8500 store cattle go onto the market in the next two days.
With some big sales set for late last week – at Wodonga, Hamilton and Ballarat agents say that some producers may withdraw stock from sales thanks to the rains according to a report in The Weekly Times.
Fine wool’s dry blow
DRY seasonal conditions are adding to the woes of an already depressed fine wool market. The volume of fine, super and ultrafine wool being tested has increased significantly year-on-year, meaning there is an increase of fine wool hitting the market.
The recent Australian Wool Production Forecast Report says wool test volumes are 3pc higher than for the same period in 2011-2012 and increases in year-on-year production volumes are greatest in superfine, fine and medium wool.
Australian Wool Testing Authority statistics show 15-micron wool tested year-to-date (2012-2013) compared to last year (2011-2012) is up 43 per cent, 16-micron category is up 30 per cent and 17-micron volumes are up 23 per cent.
The 18 to 21-micron volumes are also up between 3 and 13 per cent. Elders national wool manager Andrew Dennis said the biggest factor contributing to the increased volumes of fine wool was the seasonal conditions.
Queensland looks to live cattle trade
QUEENSLAND premier Campbell Newman is in talks to ship up to 150,000 live cattle to Papua New Guinea to solve the beef crisis. Newman headed a trade delegation to PNG last week and was part of a briefing to officials about lifting Queensland's beef glut and alleviating his hosts' "protein drought", the Courier-Mail reports.
Delegates are pushing for live cattle to be sent, rather than cash in an AusAid-funded program to the $500 million-a-year aid recipient. They visited port facilities, holding yards and processing plants in Port Moresby to check the capacity of the infrastructure and to assess animal welfare standards.
According to a report in The Weekly Times Federal MP Warren Entsch is the mastermind of the plan, backed by Cairns Chamber of Commerce chief Deb Hancock and prominent northwest mayors and graziers.
"Given that PNG is the largest recipient of Australian aid, we could use some of those aid dollars to buy as many as 150,000 of our heavier cattle, especially the breeding females, from our farmers, and send them to PNG to build up their herd.”
Study proves AI is viable
ARTIFICIAL insemination could be a more viable option for commercial beef herds, according to results from an Angus benchmarking study according to a report in The Weekly Times.
The second round of results from the Angus Sire Benchmarking Program released recently showed high conception rates. The data also confirmed estimated breeding values were an accurate tool to predict production outcomes from bulls.
The benchmarking program tested several local and international bull offspring over a large number of traits including daughter fertility, progeny growth, carcase characteristics and feed efficiency of their progeny.
In the latest round 2306 cows from five commercially operating herds in NSW and Victoria were joined with 40 Angus bulls. A 60 pc conception rate was achieved, using fixed-time AI after the cows were synchronised using Bayer fertility regulators.
Indonesia cattle quota speculation
SPECULATION continues as to whether Indonesia will import an additional 25,000 cattle by June. Late last year the Indonesian Government set an import quota for 2013 at 267,000 live cattle, which was a reduction of 9 per cent year-on-year.
Australian agriculture ministers have been in Indonesia this week visiting supply chains and meeting with Indonesian Government officials, with reports that they have been discussing the possibility of increasing the live cattle import quota.
And while there have been reports that the new quota has already been granted, Australian Livestock Exporters Council chief executive Alison Penfold said there still hadn't been an announcement so it was speculation.
"The mechanisms required to enable the increased quota have not been put in place and we have to respect the process," Ms Penfold said according to a report in The Weekly Times.
Food drops to cattle labelled loopy
CONDUCTING food drops for starving cattle is a "greenie, loopy idea", Queensland's national parks minister says. However, state Greens Senator Larissa Waters said the option was better than opening up national parks to grazing.
The Queensland Government will this week rush through legislation to open up five national parks and eight national reserves to help feed 25,000 cattle. They'll be able to graze on the land until the end of 2012.
The northern Australian cattle industry is suffering from the effects of widespread drought, wildfires and plummeting prices largely blamed on the reduction in live cattle exports to Indonesia says The Weekly Times.
Waters said the government needs to get fodder to cattle in need to immediately address the animal welfare crisis. "The Newman Government should have acted earlier and worked with graziers instead of letting this become an emergency to use as an excuse to open up national parks," she said.
National Parks Minister Steve Dickson, whose family was forced off the land when he was six, said there was not enough money to do food drops. "We've had enough greenie, loopy ideas over the two (previous) terms of (Labor) government, I think it's about time action got ahead of words," he said.
Indian herd on top
INDIA has the biggest bovine herd in the world for the second year running. Figures just released by the United States Department of Agriculture puts the Indian bovine herd at 327 million, an increase of 1 per cent.
India's herd size is skewed by the big numbers of buffalo, which push that country's total up. But it puts the local herd of almost 30 million into perspective, placed eighth behind India, Brazil, China, the US, EU, Argentina and Columbia. Russia and Mexico round out the top 10.
The Weekly Times says Brazil's herd number is expected to continue to rise, up 3 per cent on last year's total, thanks to genetic improvements, improved pasture management and better cattle prices.
In contrast, the US herd is expected to decline 2 per cent as breeders continue to sell off numbers due to the ongoing drought there. China's herd has been forecast to remain steady this year at 104 million.
Qld Govt releases details on BJD assistance package
The Queensland Government has announced details of a financial support package to assist cattle producers impacted by the ongoing Bovine Johne’s Disease response package in the state says online news service beefcentral.com.
The central planks of the package are:
Cattle Council to kick off producer forum series at Casino
The Cattle Council of Australia will hold the first in a series of national grassfed beef producer forums at Casino during the town’s Beef Week celebrations later this month says online news service beefcentral.com.
The forums are the result of a new arrangement between Cattle Council and Meat & Livestock Australia, under which Cattle Council is facilitating producer forums around the country on behalf of MLA in return for what it terms as a cost-recovery fee.
In a press release issued to announce the first event at Casino, CCA president Andrew Ogilvie said the producer forums provide a mechanism for Cattle Council to have a two-way dialogue directly with Australian beef cattle producers.
“Cattle Council has two distinct roles. One is to represent the interests and views of Australian beef cattle producers and the other is to provide strategic policy advice and direction to Meat & Livestock Australia (MLA) on the investment of grassfed cattle levies,” Ogilvie said.
Grainfed cattle numbers rise only 1pc in March quarter
Questions are again being asked about the ability of the quarterly grainfed industry survey to accurately capture trends in grain-feeding operations, after the March quarter figures released last Friday surprisingly suggested there has been only a 1 pc rise in numbers on feed since December.
The result has perplexed a number of large industry stakeholders contacted by Beef Central given the clear evidence of huge earlier inflows of cattle into feedlots due to seasonal conditions. In the lead-up to today’s result, there was broad expectation that numbers would rise dramatically.
In Queensland’s case, numbers on feed have actually fallen by 18,000 head since December, the survey showed, reaching 470,000 head, despite being at the epicentre of the current drought event.
In NSW, the second largest feeding state, results showed feedlots increased numbers 17,000 head, to 239,000 head. Victoria was up less than 1000 head to 40,000. “Ridiculous – totally inaccurate,” said one of Australia’s largest processors when told of the result filed this morning.
Qld BJD outbreak linked to foreign bison strain
Ever since Bovine Johne’s Disease was confirmed in a Central Queensland cattle stud last November, triggering the quarantine lockdown of more than 100 cattle properties the question on everybody’s lips has been ‘how did it get there?’
Laboratory testing of the strain of BJD found on the Kirk family’s Rockley Brahman stud has now come much closer to solving that riddle – and the answer raises some serious questions about the biosecurity protections for Australia’s national cattle herd.
Queensland Government scientists have now determined the strain of BJD found on Rockley is the “bison-strain”, which means it is very likely to have originated from overseas says online news service beefcentral.com.
The strain is unlike any other found in Australia, ruling out the likelihood that that variant at the centre of Queensland’s quarantine response was imported via cattle from either Victoria or NSW.
Friday daily livestock article
Consignments at Roma prime this week dropped 29%, returning to normal levels, with all the usual processor buyers present.
Heavyweight D3 grown steers to slaughter lifted 7ȼ, selling between 131ȼ and 140ȼ, while light D3 grown heifers sold to processors 5ȼ dearer, ranging from 108ȼ to 128ȼ/kg. Medium D2 cows to slaughter fell 19ȼ, to average 58ȼ/kg.
Numbers at Dubbo were 41% lower week-on-week, with very limited numbers of prime trade weight cattle and grown steers. Light C2 yearling steers returning to the paddock rose 9ȼ on 154ȼ, while light C2 yearling heifers to restock sold from 100ȼ to 146ȼ, at 13ȼ dearer. Medium C3 grown steers to slaughter increased 5ȼ, averaging 138ȼ, while medium D3 cows to processors were 4ȼ lower on 87ȼ/kg.
Supply at Bairnsdale declined 19%, with condition improving from last week’s plain quality offering. Heavy D2 yearling heifers to slaughter lifted 8ȼ on 124ȼ, while heavy C3 grown steers were 9ȼ higher, selling between 176ȼ and 185ȼ to processors. Heavy D2 cows to slaughter rose 6ȼ, ranging from 99ȼ to 113ȼ/kg.
At the close of Thursday’s markets the Eastern Young Cattle Indicator (EYCI) increased 2.5ȼ, to average 282.50ȼ/kg cwt. Trade steers were 1ȼ higher on 165ȼ, while medium steers lifted 3ȼ, averaging 152ȼ/kg. Feeder steers were 3ȼ dearer on 155ȼ, while heavy steers improved 1ȼ on 163ȼ/kg. Medium cows fell 1ȼ, to average 91ȼ/kg.
Numbers decreased slightly at Wagga with a relatively good quality selection across all lines. Light weight 2 score lambs increased 71˘ to 421˘, and trade weight score 3 lambs also jumped 16˘ to 422˘/kg cwt. Heavy weight 3 score lambs were 17˘ higher on 425˘, and extra heavy 4 score lambs rose 19˘ to 408˘/kg cwt.
At the conclusion of Thursday’s markets the eastern states restocker lamb indicator was 8˘ higher on 343˘/kg cwt. Merino lambs increased 12˘ to 323˘, as did light lambs, up 9˘ on 330˘/kg cwt. Trade and heavy weight lambs both increased, 6˘ and 5˘, to 389˘ and 404˘/kg cwt, respectively. The mutton indicator rose 3˘ to 160˘/kg cwt.
Increased NZ supplies drive exports to UK and China
In April, total NZ lamb exports were up 5% year-on-year, registering the second highest monthly export volume since April 2010, at 36,567 tonnes swt.
This accentuates what had already been a rapid start to the year, with export for the first four months of 2013 totalling 133,882 tonnes swt, up 21% or 23,537 tonnes on the corresponding period last year (Beef + Lamb New Zealand).
The large volumes that left NZ shores in April were primarily supply driven, as producers continued to turn off lambs at higher than expected levels on the back of what were the worst drought conditions in 30 years.
Shipments to the EU accounted for 40% of total NZ exports in April, at 14,590 tonnes swt - but were back 12% on April last year, underpinned by a huge reduction in exports to France, down 48% at 1,092 tonnes swt. In contrast, exports the UK were up 25% at 8,547 tonnes swt, accounting for 59% of total lamb exports to the EU.
Shipments to China continued at very high levels throughout April, totalling 11,400 tonnes swt, up 86% on April last year. In comparison, exports to the Middle East and the US were back 17% and 10% on April last year, at 3,088 tonnes swt and 1,092 tonnes swt, respectively.
Brazilian beef exports surge in April
Brazilian beef exports during April reached their highest volume since 2007, totalling 95,200 tonnes swt – an increase of 37% year-on-year. Underpinning the increase in shipments was a recover in exports to Iran and Egypt, assisted by a decline in export prices. Russia and Hong Kong remained as major destinations.
After a slow start in the first quarter of 2013, shipments to Egypt during April rose 40% year-on-year, to 8,139 tonnes swt. Despite still facing bureaucratic issues in Iran (in December 2011 the country stopped issuing import licenses), beef exports for the same period recovered significantly, up seven-fold year-on-year, to 4,244 tonnes swt.
The ban on US chilled beef by Russia last February has contributed to substantial growth on Brazilian chilled beef exports to Russia, with shipments during April totalling 934 tonnes swt. Exports to Hong Kong continued to register significant growth, totalling 19,122 tonnes swt for the same period.
Potential co-product values increase in April
The potential co-product value for a Japanese steer (average 331kg cwt) during April increased 7% year-on-year, averaging $206.04/head, with strong demand for hides, and meat and bone meal, buoying prices (Kurrajong Meat Technology – April co-products monitor).
Meat and bone meal values ($34.70/head) were 5% higher on last month and up substantially (36%) on the corresponding month last year, underpinned by strong demand from Indonesia and China.
Hides (281-350kg) improved 33% year-on-year, to average $59.67/hide, with weak US supplies, along with increased tanner demand from Asia and Italy, triggering generally higher prices.
The potential value for tallow rose 5% month-on-month, to average $54.59/head, yet fell 15% on last year. Tallow prices are likely to remain firm, as demand from China’s oleo-chemical producers and Singapore’s renewable fuel companies is likely to continue.
The average value for beef offal remained relatively unchanged on March, at $57.09/head, however declined 1% year-on-year.
Feeder rates slide
Feeder cattle rates eased again this week, with the ample supply of suitable cattle continuing to impact the market.
Mid-fed and long fed prices have also reportedly retreated due to the increased supply.
Cattle prices ease across South America
South American steer price have fallen to their lowest level since early 2013, with seasonal conditions forcing additional cattle to market and placing downwards pressure on prices.
The Uruguayan market continues to feel the impact of difficult seasonal conditions, with a premium emerging for heavy steers that meet tight specifications (finished in natural grasslands) - averaging 370US˘/kg cwt last week. A lack of rain, combined with poor pasture growth in Central Cacho region, Paraguayan steer prices dropped 10US˘/kg last week, averaging 290US˘/kg cwt.
With the deterioration in pasture quality, the quality of cattle offered across Brazil has reportedly declined, with prices back across all regions. Cattle to slaughter in Sao Paulo averaged 326US˘/kg cwt last week, while further south, Argentinean steer price remained steady, averaging 344US˘/kg cwt.
Beef and lamb sales strong in April
Butchers reported relatively strong beef and lamb sales for the month of April, despite being slightly weaker year-on-year, according to MLA’s butcher survey carried out by Millward Brown.
Of the 150 survey respondents, 39% reported beef sales as ‘very good’ to ‘excellent’, although down eight percentage points on last year, only 2% reported ‘poor’ sales. Around 32% of butchers recorded lamb sales as either ‘very good’ to ‘excellent’, this was seven percentage points lower than the same time last year.
Despite the good quality, pork cuts have become less popular in recent weeks, reflected through sales performance, with 30% of butchers recording ‘poor’ to ‘fair’ sales. Chicken was the only meat to remain on par with April 2012, with 37% of respondents again reporting either ‘very good’ to ‘excellent’ sales.
When asked about cut trends, respondents noted that beef striploin, new york, porterhouse and T-bone cuts were the most popular in April, with butchers attributing this to the cooler weather and current price of beef.
Sluggish trade in Korea, despite improved economy
While the Korean economy is suffering, there is a sign of an improvement in the economic situation.
Hankok IIbo suggests Korean private consumption expenditure during the first quarter of 2013 rose for the first time this year on the back of the Gross Domestic Product expanding 0.9 percentage points during the first quarter of 2013, compared to the December quarter last year.
Additionally, jobless rates improved in April to 3.2%, from 3.5% in March, assisting April consumer sentiment index being higher than 100 points, at 102 points – above 100 points for fourth consecutive months since the start of the year (Bank of Korea, Yonhap News).
However, this week’s imported beef trade in the Korean market was reportedly slow, with stock levels of Australian beef remaining relatively high. Though May is traditionally one of the highest beef consumption months in Korea, demand for imported beef is reportedly sluggish.
As a result, Korean weekly wholesale prices for most items of imported beef eased this week on last week, with Australian chuck roll and brisket each down 1%, at KRW 8,200/kg and KRW 6,900/kg, respectively.
However, US short rib prices were up 1% on last week, at KRW 12,900/kg. Hanwoo carcase prices remained the same level as last week, at KRW 11,174/kg, with pig carcase prices rising 6%, to KRW 3,972/kg.
Eastern states over-the-hooks cattle prices slide
Eastern states over-the-hooks prices have been on a downward trend since January, predominately across the cow and yearling categories.
Medium cow (240-280kg cwt) prices in Queensland have slipped 43˘/kg cwt since the start of January, to average 238˘/kg cwt for the year, while NSW declined 31˘/kg cwt, to average 226˘/kg cwt.
Rates in Victoria and SA followed a similar trend, back 9˘/kg cwt and 5˘/kg cwt, to average 210˘/kg cwt and 195˘/kg cwt respectively.
Rates for grass fed yearling steers (260kg-280kg cwt) in Queensland have averaged 297˘/kg cwt for the year-to-date, back 6˘/kg cwt since the start of January, while prices in NSW averaged 318˘/kg cwt, down from 324˘/kg cwt at the beginning of the year.
SA’s rates have been steady since January, while Victoria was the only state to record an increase, with the average up 12˘/kg cwt, at 317˘/kg cwt.
Cattle indicators fluctuate across the eastern states
Eastern states cattle prices were generally weaker this week, despite widespread showers across most of the country.
Trade steers continued to slide, averaging 304˘/kg cwt, back 7˘/kg, while medium steers were unchanged on 281˘/kg cwt.
Heavy steers received increased support from processors, lifting 10˘/kg cwt making 296˘/kg cwt.
The medium cow indicator lost the most ground week-on-week, averaging 188˘/kg cwt, back 15˘/kg cwt. Feeder steers lifted 2˘/kg lwt making close to 155˘/kg cwt.
Processors dominate saleyard purchases during April
The extended dry conditions across the majority of the eastern states over the last six months have caused many buyers to reassess their purchasing options, and consequently causing shifts in saleyard purchasing patterns.
The majority of saleyard cattle are still heading to abattoirs, with 44% sold in Queensland last month, while around 52% of the yarding’s in NSW were slaughtered in April. Processors in Victoria and SA secured the majority of saleyard stock last month, with around 66% heading direct-to-works.
Interestingly, the number of cattle restockers secured in Queensland saleyards during April improved, totalling 35% of offerings, compared to 30% in January. A similar trend was apparent throughout NSW, with restockers purchasing 24% in January, compared to 28% in April. Saleyard restocker buyers throughout Victoria, on the other hand, were quiet at most markets, with only around 8% of saleyard throughput heading back to the paddock.
Feedlot buyers continue to source ample supply from paddock sales, with current feed levels an issue for most producers. Since January feedlots have wound back purchases from saleyards, with buyers in Queensland securing 5% less stock, while 7% less numbers went to feeders in NSW since the start of the year. Feeder buyers in Victoria were also subdued, back 2%, while SA was the only state to record increased feeder activity since January, up 9%.
The large number of cattle heading direct-to-works, coupled with increased paddock sales to feedlots, has continued to place downward pressure on saleyard prices in recent months.
US seasonal demand slow to appear this year
Demand for lean ground beef and other grilling products generally picks up through late spring in the US, but there has been very little in the way of increasing demand for beef so far this year.
Due to currency shifts this week, in A$ terms, prices were in fact slightly stronger, with 90CL beef down 5.5US˘, to 184.5US˘/lb CIF, or in A$ terms, were up 1.8A˘, to 384.8A˘/kg FAS – albeit, due currency movements, rather than strengthening demand.
With Memorial Day next weekend, there are signs that this peak demand period has not generated the kind of trade that is usually expected, and if normal price patterns follow the long weekend, lean beef could continue to get cheaper through June.
In US domestic issues, pasture conditions, which were bad last year, appear worse in many places at the moment. There is reportedly a large portion of the US beef cow herd in regions with more than 40% of pastures rated as either poor or very poor.
The medium term impact of this will most likely be a sharp tightening in beef supply in the US in 2014 – if there is scope for US producers to begin to rebuild herds.
Patchy falls do little for cattle markets
Patchy rainfall across several states was welcome over the past week, although totals were still too small to significantly bolster the recent faltering cattle market, with the rain having only a minor impact.
With the window for pasture growth in southern Australia rapidly closing, producers will be very closely evaluating their carrying capacity over the winter months, with every dry week that passes by accentuating the supply pressures coming out of Queensland.
The Eastern Young Cattle Indicator (EYCI) closed Thursday’s markets on 282.5˘/kg cwt, back 3˘ from last week, while nationally, the medium cow indicator was also back, settling on 229˘/kg cwt, down 4˘, while the heavy steer indicator was down 1˘, closing on 307˘/kg cwt.
Furthermore, recent declines in the cheaper A$ are unlikely to have any immediate impact on markets, but should be seen as much needed positive news for the industry.
Given that almost all reports indicate that processors are booked up for several weeks in advance, the ability for the lower A$ to be reflected in the market is limited, but its influence should come to bear over time if the lower levels can be sustained, or even continue to depreciate.
This week saw the A$ fall below parity for the first time since mid-June last year, finishing Thursday at 98.8US˘.
Lamb and mutton markets this week finished generally weaker, despite tightening supplies and some decent falls in the Riverina and Victoria. The Eastern States Trade Lamb Indicator (ESTLI) closed the week on 389˘/kg cwt, up 11˘, while nationally, heavy lambs declined 5˘, to close on 418˘/kg cwt, and the mutton indicator finished firm, on 158˘/kg cwt.
Record crop production forecast for 2013-14 – USDA
Global wheat and feed grain supplies are forecast to reach record levels in 2013-14, according to the United States Department of Agriculture’s latest World Agricultural Supply and Demand Estimates.
Wheat production is forecast at 701.1 million tonnes, 7% higher than in 2012-13, with most of the major wheat exporting regions expected to grow, especially in the Commonwealth of Independent States (Ukraine, Kazakhstan, Russia, etc.), the EU, Australia, Argentina and Canada.
The US is the major exception, with wheat production expected to be lower in 2013-14, partly due to decreased yields.
Coarse grain supplies (mainly corn, sorghum and oats) are projected to rise 9% in 2013-14, to 1.4 billion tonnes – the largest global crop on record. This is largely driven by a substantial increase in corn production in the US.
Further, global oilseed production is also forecast to reach a new annual record in 2013-14, at 491.7 million tonnes, 5% higher than the previous year. This increase will mostly be in soybeans in South America, while Chinese soybean production is expected to continue the decline of the past three years, although at a slower pace.
Strong demand for Aussie red meat in South Asia
Not only China, but the remainder of South Asia (excluding China) chased more Australian red meat during April. Australian beef and veal exports to South Asia during April lifted 36% year-on-year, to 11,136 tonnes swt (Department of Agriculture, Fisheries and Forestry).
Volumes for the first four months of 2013 totalled 37,445 tonnes swt (up 5% on the corresponding period last year), which placed the region as the fifth largest regional export destination for Australian beef, following Japan, the US, China and Korea.
The improved monthly shipments were assisted by strong exports to the Philippines, with volumes almost threefold year-on-year, at 2,400 tonnes swt. Exports to the Philippines have maintained record pace during the first four months of 2013, with the volumes totalling 7,522 tonnes swt (up 56% on the same period last year).
While the majority (82%, or 1,977 tonnes swt) shipped to the Philippines during April remained manufacturing, shin/shank exports were also high, at 196 tonnes swt. Exports to Indonesia doubled year-on-year, to 2,800 tonnes swt, while there was also favourable trade with both Malaysia and Singapore, at 1,443 tonnes swt (up 52% year-on-year) and 944 tonnes swt (up 26%), respectively. Exports to Thailand were up 4% year-on-year, at 197 tonnes swt, and there was improved year-on-year performance to Vietnam, at 82 tonnes swt.
However, Australian beef trade to Taiwan has been slow for the past two months, with the April volumes falling 16% year-on-year, to 2,903 tonnes swt - largely affected by strong global competition for cuts, such as shin/shank (down 18% year-on-year, to 1,039 tonnes swt) and blade (down 56%, to 454 tonnes swt), coupled with increased presence of US beef in the market.
Along with Taiwan, shipments to Hong Kong during April declined 39% year-on-year, to 367 tonnes swt, due to a significant decrease in frozen beef exports (down 65% year-on-year, to 147 tonnes swt). However, interestingly, chilled beef exports during April increased 24% year-on-year, to 220 tonnes swt.
Australian sheepmeat exports to South Asia during April totalled 3,594 tonnes swt (up 65% year-on-year). A surge in mutton monthly exports (2,499 tonnes swt - highest volumes since December 2009) offset a slight decline (2%) in lamb exports (1,095 tonnes swt). Mutton exports to Malaysia and Taiwan were particularly strong during April, at 905 tonnes swt (up 237% year-on-year) and 849 tonnes swt (up 126%).
US beef production down in the first quarter
Cattle slaughter and beef production in the US during the first quarter of 2013 was down on the same time last year, with lower volumes in February and March more than offsetting a relatively high January (US Department of Agriculture).
Beef production reached 2.8 million tonnes cwt through the quarter, 2% lower than last year, on the back of a 3% drop in adult cattle slaughter, to 7.645 million head.
Interestingly, this is more beef than Australia produces in one year, illustrating the magnitude of the US beef and cattle industry.
Most cattle categories recorded a decline in slaughter compared with last year, including steers, heifers, bulls and beef cows. Dairy cows were the exception, with slaughter slightly higher for the quarter.
Manufacturing beef exports on the up in April
Australian manufacturing beef exports were generally higher during April, especially across the leaner categories, with 85CL beef was the largest category, lifting 18% on last year, to 8,237 tonnes swt (Department of Agriculture, Fisheries and Forestry).
While there was a large drop in shipments of 85CL beef to the US (down 42%, to 1,987 tonnes swt), there were significant increases to Indonesia (up more than 600%, to 1,837 tonnes swt), South Korea, China, Saudi Arabia, most of South East Asia and Canada. Exports to Japan were 4% lower, on 2,231 tonnes swt.
90CL beef exports jumped 20% year-on-year, to 7,044 tonnes swt, dominated by shipments to the US (up 13%, to 5,607 tonnes swt) amid large increases also to China, Taiwan, South Korea and Canada.
65CL was the fattiest beef category of any note to record an increase in shipments, up 10%, to 6,032 tonnes swt. This was mostly due to a huge jump in exports to Saudi Arabia (from 72 tonnes last April to 1,179 tonnes swt in 2013), while shipments to Japan dropped 18%, to 2,296 tonnes swt. South Korea, the Philippines and Russia also lifted notably.
Most 75CL beef was exported to Japan, the Philippines and the US, with growth to the Philippines offsetting falls to the other large markets. 95CL beef (up 52%, to 3,459 tonnes swt) was almost exclusively shipped to the US (up 52%, to 3,216 tonnes swt).
Imported beef consumption slow in Japan
Japan consumed 113,674 tonnes (boneless equivalent) of imported beef during the first three months of this year, down 11% from the corresponding period in 2012 and the lowest since 2008 (demand and supply data by Agriculture and Livestock Industries of Japan).
The weakened Japanese yen, subdued performance of the fast food sector (hamburgers and gyudon beef bowl), and strong prices from major beef suppliers (Australia and the US) impacted imported beef distribution in the market, with stocks ending 10% higher than the same time last year at 75,084 tonnes.
Japanese beef consumption during the March quarter was also down 5% to 88,450 tonnes, taking the combined volumes to 198,125 tonnes (9% lower than 2012)