As frosts start to knock feed around in Queensland and patchy rain contributes to more cattle being turned off, the number of cattle heading south for processing continues to climb.
One transport operator that does a lot of work for Elders commented that his work has gone from 80% moving store cattle from the south to northern restockers to now being 80% trucking heavier cattle from the north to south for processing.
Southern processors are active in Queensland markets, which is keeping northern processors honest, but direct to work quotes in Queensland are at a 50c/kg lw discount to southern works, which is around the transport cost to truck them south.
Southern store cattle bought by northern operators early in the year are doing well on oats, but won’t be ready until late August, so most of the heavy cattle are coming out of Queensland with an order for 750kg-plus bullocks to bring cattle from Charters Towers to South Australia, an indication of how keen southerners are to own heavy cattle. The best cows in Queensland are earning about $3.20/kg lw for the heavy ones, with bullocks making $3.40/kg lw.
Feeder markets are grinding higher with a $1/kg lw premium for black cattle about the widest premium witnessed by our agents in northern NSW, and 10c/kg lw premium for HGP free. Feedlots are keen to take heifers that have been scanned not in calf otherwise they cop a big discount of 20-30c/kg lw. The Downs feeder markets is quoted $3.80-3.90/kg lw, with heifers 40-60c/kg lw discount.
There are opportunities starting to open on lighter store cattle not suitable for feedlots with northern restockers again eyeing an opportunity to put some of these away on oats for later, given the strength in the feeder and slaughter markets and the promising outlook.
Central Queensland weaner sales started this week, which will test the market for little backgrounding type cattle. Flatback weaners 260-280kgs fetched $4.40-4.75/kg lw with the main buyers local bullock operators. Feeders recorded $3.70-3.95c/kg lw.
Long-term signals in global beef markets keep strengthening. International beef prices continue to rise as US beef production falls with Steiner reporting US fed cattle slaughter down 7.2% for the week, the 13th straight week of declines.
Global food commodity prices edged higher in June, supported by higher meat, vegetable oil and dairy prices, according to the United Nations' Food and Agriculture Organization. Meat prices rose to a record 126 points, now 6.7% above June 2024, with all categories rising except poultry. Bovine meat set a new peak, reflecting tighter supplies from Brazil and strong demand from the US. Poultry prices continued to fall due to abundant Brazilian supplies.
Higher international beef prices should support further rises in the price of Australian cattle particularly if supplies tighten (if southern season improves). Heavy turnoff from Queensland is continuing to be the main factor suppressing local cattle values.
The difference between our cow prices and the price the beef is commanding overseas is over double the long-term average. As Queensland cow slaughter moderates seasonally the next few months and local processing competition for cows strengthens, we should see rises in cow values the next few months.
Elders Business Intelligence Analyst Richard Koch combines a deep understanding of global market dynamics with regular insights from Elders staff on the ground, providing informed analysis shaped by both data and real-world observations.