Eastern states cattle slaughter hits 22-week high

Cattle slaughter across the eastern states (excluding Western Australia) hit a 22-week high last week, at just under 134,000 head. As highlighted in MLA’s weekly slaughter report, the increase was recorded across all states, except Tasmania, with Victoria, after a short business week prior, leading the expansion.

While cattle slaughter has largely increased since it bottomed out in early October, kill rates remain below levels recorded over the last two years, with last week’s eastern states total 7% lower than the same time last year.

Looking ahead, tight adult slaughter cattle supplies are expected to remain in 2017, with MLA’s October projections update forecasting an annual national slaughter of 6.9 million head next year – which equates to an average eastern states weekly slaughter of about 120,000-130,000 head.

Processor grids have reflected the recent lift in supplies, with MLA’s over-the-hook cattle price indicators largely easing over the past month.

This week, grassfed trade steers (YG, non-MSA, 240-260kg carcase weight) in:

• Queensland eased 2¢ week-on-week, averaging 529¢/kg cwt
• NSW declined 7¢, averaging 545¢/kg cwt
• Victoria were steady, at 555¢/kg cwt

Grainfed cattle were the exception, with the Queensland grainfed over-the-hook indicators remaining steady for the past fortnight. From the record numbers of cattle on feed at the end of last year, grainfed slaughter has remained high throughout 2016 – September quarter grainfed cattle slaughter accounted for 39% of the national total, well about the 32% five-year average (ALFA/MLA feedlot survey). However, the grainfed cattle premium over grassfed lines has increased for six consecutive weeks, indicating that the relative supplies of grainfed and grassfed may have returned to more normal levels during the final quarter.