WITH the Indonesian government imposing a 350 kilogram trade restriction on live cattle imports, the whole of the Australian cattle market is feeling the effects of a fundamental shift in buying demand.
And adjusting to this change has meant a large number of previously live exported cows, heavier steers and bulls are now seeking slaughter at home rather than abroad which has suppressed the usual mid-winter price spike by conpressing kill space at some export plants.
It’s a classic case of supply and demand, says Northern Territory stockman Peter Watkins of Ruralco.
Mr Watkins, who has spent many years in the agency game, says if anyone remains unconvinced that northern live export does not have an influence on southern cattle prices now is the time to take notice.
Mr Watkins told Stock & Land that in the past, northern live export has virtually been an “open slather” affair taking all weight and grades of cattle.
But due to a number of internal reasons Indonesia has slowed its import needs seeking only light young steers less than 350kg, which means “rejected” northern Australian cattle are now seeking alternative marketing options.
And due to the remote location of many of these properties, there is scant difference in the haulage costs of trucking cattle from the western Territory or Kimberley to export establishments at Townsville or Brisbane in Qld, Murray Bridge or Naracoorte, SA, Harvey in WA or even Melbourne and Warrnambool in Victoria.
But finding trucks properly equipped and willing to traverse these extra long distances Mr Watkins says is akin to discovering “rocking horse poo.”
The boats are coming, he says, but the trade will be slow to re-develop on these selected light steers. And it’s been a stroke of good fortune that during this past season most cattle have carried extra weight that makes the freight affordable.
Northern cattlemen normally get but one chance each year, April to October, to muster and sell their surplus stock. The rejected cattle they would normally sell to live export have to go somewhere, Mr Watkins says.
“Seeking the next alternative market is now paramount,” he said.
Looking forward Mr Watkins believes the outlook for light “Indonesian” steers appears promising. Currently prices for these are perched at 190 cents a kilogram liveweight (delivered to the wharf) which suggests the magical 200c/kg may not be too far in the distance, he suggests.
However getting a kill at a Queensland plant is usually a difficult state of affairs at this time of year, he says.
Oddly enough this is not the case this year according to Teys Brothers livestock manager Geoff Teys.
Mr Teys says that most Qld plants are back working at full capacity after a string of four-day working weeks between April and June broken by holidays.
“It’s just taken time reorganise things,” Mr Teys said.
Initially, Qld processors had budgeted for one million cattle being live exported this year, he said.
“We structured our kills at 20 per cent under capacity on this expectation but these numbers have failed to materialise,” he said.
“To reorganize and train labour in rural areas especially when you’re competing for workers against the mining industry takes time.”
Source: farmonline.com.au
http://www.meattradenewsdaily.co.uk/news/140710/australia___weight_restrictions_on_live_cattle_exports_.aspx
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