By Angus Brown | Source: MLA, ACA
We’ve seen some rain in Queensland, and it has had an impact on slaughter in the north at least. It’s in the south however where finished cattle supply has ramped up, with lower capacity in South Australia being made up further east.
The rainfall which fell in Queensland a couple of weeks ago was not quite as widespread as expected. Much of the precipitation was in the far north and within 200kms of the east coast. Figure 1 shows that most of Queensland is yet to hit 60% of average wet season rainfalls, with two and a half months to go.
There appears to have been some impact on cattle supplies, at least in Queensland. Figure 2 shows that Queensland weekly slaughter looks like it might dip under last year’s levels if it remains around the 65,000 head mark.
South Australian slaughter is well down on last year. The fire at TFI has slaughter down 28% in South Australia, but stronger slaughter in NSW and Victoria has total east coast levels stronger than last year.
Victoria killed 17% more cattle than the same week last year, while NSW is up 8%. This has east coast slaughter last week sitting 5.2% above the same time last year (figure 3). In fact, last week’s slaughter was higher than any week before the middle of May in 2017.
In late January and early February, east coast cattle slaughter was 14% above last year’s levels, and the ‘relative’ tightening in supply is likely to be behind the steady to slightly higher prices last week.
On average east coast cattle slaughter tracks sideways from now until the public holidays come again at the end of March. However, we have seen slaughter levels rise or fall sharply at this time of year with rainfall, or lack of, usually the driver.
While the rain hasn’t seen slaughter fall, the rise seems to have slowed. Additionally, in their projections MLA forecast 2018 slaughter to be up 3% this year. So far in 2018 slaughter has been up 8% according to MLA’s weekly numbers.
If MLA’s numbers are to be correct, slaughter levels will have to track closer to last year’s levels for the remainder of the year. While export demand will be the main driver of prices, tightening slaughter should see some improvement in prices relative to export values. If slaughter remains better than 5% stronger than last year, we can expect a more pronounced supply contraction somewhere down the track, likely in the winter.
Want to see more ?
Go to Cattle data
Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report.
Mecardo will send you its latest market analysis outlook delivered to your Inbox as it's published. You will also receive one month Premium access for free.
You tell us what information you want to hear about, so you'll only be alerted to information that is relevant to you.Sign Up Now!