THE handbrake has been gently but firmly applied to the slaughter and feeder cattle markets this week, with direct consignment rates for slaughter cattle typically back 10c/kg and the saleyard system showing even larger falls.

Some processors are now reporting three-week delays on kill slots for over-the-hooks bookings – effectively taking bookings to March, week one – a dramatic turnaround from only a fortnight ago when kill space was abundant.

Competitive processors in southern Queensland have dropped rates 10c/kg on all slaughter lines since Monday – the first downwards trend in the market since late October, before rain relief arrived. Back in October week four (before the rain started), Queensland grids still had cows at 355c and four-tooth steer 440c/kg.

Heavy cows this week are priced at 510c/kg for kills in southern Queensland, and four-tooth heavy steer 570c.

Suddenly, there’s a surplus of cattle in the market, at a time when rates were forging ahead. Rates on cows lifted from 400c in late December to 520c earlier this month, and heavy steers from 470c to 580c in six weeks.

Central Queensland rates are generally on par with southern parts of the state this week, although some processors are considering further reductions.

“It’s the result of the rain that started back in November – cattle are now ready to go,” one processor contact told Beef Central this morning.

“In addition, some producers may have sensed that the top of the market cycle was close, and decided to move before prices softened too much,” he said.

Beef Central foreshadowed a correction in the market in the face of growing supply in this report on Tuesday last week.

In southern states, rates in southern NSW have heavy cows this week at 490c and steers 540c; and in eastern regions of South Australia, 500c on cows and 540c on bullocks – all back 10c.

A lot of cattle are coming forward in southern parts of Australia this week, both through the yards and direct consignment channels, processor contacts said.

With Easter this year appearing particularly early (week 13, Good Friday 29 March) there is already some thoughts about processing congestion due to consecutive holiday-shortened production weeks, followed by ANZAC day holiday only three weeks later.

All this could take the edge off processor demand for cattle in coming weeks.

While there are still reports of substantial rain about, with up to 50mm overnight in parts of central western Queensland, it’s Queensland’s Gulf Country where concern presently lies.

Having already received heavy rain from ex Cyclone Kirrilly, there’s concern that big rain out of the new Tropical Low forming in the Gulf of Carpentaria could cause significant flooding over the next week or so, especially if the system swings southeast from its present location.

Feeders following trend

The feeder cattle market is following a similar trajectory as slaughter stock this week, with rates back at least 10c/kg from earlier in February.

A bunch of large feedlot operators have already suspended paddock quotes on feeders this week, content that they have enough cattle around them for the timebeing, on what may be a falling market.

At one point earlier this month, flatback heavy feeders were being traded out of the paddock for as much as 390-400c/kg (note: isolated examples only), but some large lotfeeder grids on the Darling Downs were back to 360-370c/kg this morning, having been around 380c only a week ago. One large operator said his business was looking at another reduction in coming days.

Saleyards trend down

In the saleyards system, grown meatworks steers, slaughter cows and feeders were noticeably down in key sales held this morning.

Gunnedah numbers remained high at 3400 head this morning, with larger numbers of feeder cattle having a negative effect on the market, typically down 10c. Heavy grown steers and cows were much cheaper, with falls of 25-30c common on cows.

Naracoorte sale this morning was reduced in numbers to just short of 1000 head. Grown steers and bullocks fell 27c, while cows fell 30c to sell from 212-244c/kg.

Wodonga sale this morning was back in numbers to 1900 head from last week’s huge sale, but it did not stop cautious buying among processors. Heavy cows sold in a range from 232-254c, down 30c/kg or more on last week.

On the positive side of the equation, there’s been a solid lift in the international beef trim market in the last ten days, with 90CL cow trim into the US quoted at A816c/kg last week – it’s highest level since October last year. More on that in a separate report later this week.