Lack of live trade hits beef prices

28 Feb, 2013 01:00 AM
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Paul O'Meehan, Borden, is worried about the future of the beef cattle industry in WA.
Paul O'Meehan, Borden, is worried about the future of the beef cattle industry in WA.

THE lack of live exporters in the South West cattle market has seen prices hit this selling season.

Comparing the prices for 2013 against those at the same time last year doesn't paint a pretty picture.

Cow beef has lost 35 cents a kilogram and yearling beef dropped 20c/kg in 12 months but the hardest hit by far has been the vealer steers which have lost up to 50c/kg since the same time last year.

The latter months of 2012 saw significant falls in the market with prices across all grades dropping up to 20c/kg.

Since then vealer and yearling beef have struggled to make any improvements.

The lack of live shipping, according to Landmark southern livestock manager Bob Pumphrey, was the main reason behind the falls.

"We have had hardly any live shipping since October last year, that is the nuts and bolts of it," he said.

"This time last year we were sending slaughter and feeder steers into Turkey and that hasn't happened this year and from October onwards live trade normally takes thousands of cattle out of the State."

Limited live export created a serious backlog in the processing works and put a lot of pressure on lotfeeders according to Mr Pumphrey.

"Processors aren't killing the numbers they were this time last year or the year before," he said.

"Which is only because numbers are back across the board.

"Two years ago Coles and Woolworths were killing around 1800 head each, now it has dropped back to 900 to 1000.

"There is also nowhere near the number of cattle on feed.

"Everything has dropped back but the numbers keep coming in because we don't have the live shipping trade."

Mr Pumphrey said the next few months should see a drop off in numbers which would free things up a little.

Elders stud stock manager Don Morgan agreed live export had played a big part in beef cattle prices over the past few months but said seasonal conditions and the high Australian dollar had also put pressure on the market.

"Stud bull sales are also struggling to make traction this year," he said.

"Some of the better bulls are still selling well but the recent Supreme Bull Sale was a train wreck for most of the vendors.

"The price people pay for their bulls is a refection of where the market is."

Elders Albany agent Ray Norman said the backlog at processor level, caused by limited live trade options, had meant many producers were struggling to get rid of their cattle at all.

"Now they are too heavy for the domestic market and those farmers have been forced to hang onto them," he said.

"Everyone is really struggling to get bookings and although things traditionally tighten up this time of year, there are normally a lot more avenues for those grassfed cattle."

Borden lotfeeder Paul O'Meehan said it wasn't as simplistic to say the poor beef prices could be blamed on just one thing.

He said prices had been affected by numerous factors, such as the Australian dollar, the live trade situation and Australia's terrible competitiveness on the export market.

"Plus in WA we are extremely inefficient as far as processors, lotfeeders and producers go," Mr O'Meehan said.

"My understanding is that a slaughterman is on twice the wage in WA as in the Eastern States.

"Our grain prices are high and we don't have large herds.

"There is a lot going on and it would be foolish to say it is anyone's fault, it just is what it is.

"All agricultural businesses are finding it tough at the moment and I am really worried about the future, particularly in WA.

"We're on the way to becoming a boutique beef industry."

WA Beef Council chairman Tony Hiscock said all of the above factors have compounded and seen the price lighten off significantly since late last year.

Mr Hiscock said WA producers also needed to accept that demand, on a global level, was down, and there currently wasn't a lot of market options domestically.

"But by the same token it isn't disastrous, and it is not all doom and gloom," he said.

"There is still some reasonable dollars offered for cattle of the right specifications and I am fairly confident things will brighten up.

"We have to face the fact that there is a decreasing demand globally for red meat protein and we are competing in a very hard marketplace at the present time.

"We need to maintain a positive outlook and understand being average is not good enough."

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READER COMMENTS

wide bay farmer
28/02/2013 2:50:26 AM, on Queensland Country Life

Can not agree with the idea that red meat demand is down. In the UK at the moment finished steers are making 3000 dollars, yearling steers 850 quid to a 1000. A pity we couldnt tap that market
Mike from Bridgetown
28/02/2013 6:05:27 AM, on Farm Weekly

I have to agree with wide bay farmer. The problem in WA is solely based on the lack of live export compared to last year. Ludwig and his Federal cronies have a lot ot answer for. What is also lacking in WA is another modern proccessing facility which has no chance of coming to fruition if the stae gevernemnt continues to fiddle while the Agrifood Proccessing Precinct idea burns. I fear for the future for the WA beef industry as it will become a boutique side show not worth being part of. As far as doing the job better, those that are, are probably struggling the most.
Doug
28/02/2013 7:15:40 PM, on The Land

Yes it is SAD to see that Animals Australia has won a victory, of sorts. There is no need to ban Live Exports, Its has been strangled with red tape. BUT will a change of Government help ?????
Consolidated
1/03/2013 2:26:38 PM, on Farm Weekly

Animals Australia has only achieved what the government wants it to achieve. Destruction of the profitability of meat production to make way for increased grain production for increasingly depleting world coffers. You did realise this government doesn't work for you or me?
Norally
10/03/2013 7:13:22 AM, on The Land

I believe that we should phase out live exports, why are we sending live animals such distances, for slaughter. It's never made sense to me. Why aren't we building more abattoirs in WA and humanely slaughtering and sending beef? The live export industry will end, so people in this side of 'farming' should start to plan the future, because the push is on to change.

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