World Cattle News:

[Mustang Sally Farm]

Thursday, April 26, 2012
Weekly Roberts Market Report
US - Lower soybean exports from South America and rumors that Brazil will halt exports this week were supportive, writes Michael T. Roberts.

Michael T. Roberts
Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University

DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed down on Monday. APR’12DA futures closed at $15.73/cwt; down $0.04/cwt and $0.06/cwt lower than this time last week. The MAY’12DA contract closed at $14.79/cwt; down $0.36/cwt and $1.19/cwt lower than a week ago. JULY’12DA futures closed at $14.77/cwt; down $0.42/cwt and $0.87/cwt lower than last report. Supply is ample and production is up pressuring futures. Prices are expected to remain lower for longer than previously indicated. Some data show that production may be peaking in Florida and Arizona while production in other milk producing areas is still increasing. As schools wind down and let out for the summer demand is expected to seasonally decrease moving more fluid milk to manufacturing. Class III futures were: 3 months out = $14.89/cwt ($0.35/cwt lower than last report); 6 months out = $15.17/cwt ($0.50/cwt under a week ago level); 9 months out = $15.49/cwt ($0.39/cwt less than this time last week); and 12 months out = $15.59/cwt ($0.36/cwt under a week ago). Fundamentally unless hot weather begins to slow milk supply supplies are expected to remain heavy weighing on prices. Short term outlook is bearish and “any” rallies should be used to price production. Floor sources say slowing production and better exports in the fall of 2012 could help prices. Feed can be priced further out than hand-to mouth but not more than two months.


LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) finished mixed on Monday. JUNE’12LC futures closed at $114.575/cwt; down $0.875/cwt and $1.575/cwt lower than last report. The AUG’12LC contract closed at $118.600/cwt; down $0.250/cwt and $0.425/cwt under a week ago. DEC’12LC futures closed at $127.025/cwt; up $0.175/cwt but $0.325/cwt lower than last week at this time. CME cattle were pressured by lower outside markets, a higher US dollar, and a USDA Cold Storage report showing slower domestic demand amid renewed publicity over a certain ground-beef product additive. Beef stocks rose 7.9 per cent from the previous month and 14 per cent over a year ago. USDA on Monday put box beef prices at $188.57/cwt; up $0.56/cwt and $7.31/cwt over a week ago. Estimated packer margins are projected to remain poor but processors will continue to buy cattle to meet near-term retail demand. According to HedgersEdge.com, the average packer margin was raised $69.70/cwt from this time last week to a negative $19.20/head based on the average buy of $122.55/cwt vs. the breakeven of $119.27/cwt. On Monday USDA estimated cattle slaughter at 120,000 head processed vs. 109,000 the week before and 93,000 head this time last year. Monday’s cash cattle were called $0.50-$1.00 lower. Late Monday, April 23, USDA put the 5-area average price at $122.48/cwt; $0.02/cwt lower than this time last week. See graph.


FEEDER CATTLE at the CME closed lower on Monday. APR’12FC futures finished at $149.425/cwt; off $0.700/cwt and $0.925/cwt lower than a week ago. The AUG’12FC contract closed $1.100/cwt lower at $155.225/cwt and $0.250/cwt under last report. Feeders were pressured by higher corn futures slowing demand. Some profit taking was noted. Monday’s estimated receipts at the closely watched Oklahoma City market were put at 9,500 head vs. last week’s 5,451 head. This time last year 4,193 head were sold. Feeder steers and heifers were steady-to-$1/cwt lower. Stockers and calves were steady-to$2/cwt higher. Demand was considered moderate-to-good. The CME feeder cattle livestock index was placed at 149.96; down 0.22 but 0.0270 over this time last week. See chart.

 

 

This table shows the maximum price a producer could pay for feeder cattle and still break even, assuming the costs and conversion/performance factors listed above. Producers should remain aware that calculations are based on averages. Courtesy DTN.
CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The JULY’12 contract closed at $6.224/bu; up 10.0¢/bu and 9.25¢/bu higher than last Monday’s close. The DEC’12 contract closed at $5.454/bu; up 8.75¢/bu and 19.025¢/bu higher than last report. Exports, speculative buying new crop corn, and continued commercial buying of old crop contracts were supportive. Funds decreased net-bull positions to 210,431 lot down 28,838 contracts. Corn basis was steady-to-firm with end users raising bids trying to keep grain flowing. Farmer selling is slow due to early corn crop plantings. Exports were bullish with USDA putting corn-inspected-for-export at 29.386 mi bu vs. estimates for 28-34 mi bu. Weekly exports needed 3this week 3.8 mi bu to stay on pace with USDA export demand expectations. See chart.


SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The MAY’12 contract closed at $14.372/bu; down 9.5¢/bu but 17.25¢/bu higher than last report. NOV’12 futures closed at $13.414/bu; down 14.5¢/bu and 8.75¢/bu lower than a week ago. Lower exports from South America and rumors that Brazil will halt exports this week were supportive. US exports were weak with USDA announcing soybeans-inspected-for-export at 12.005 mi bu vs. estimates for 19-25 mi bu. Weekly inspections needed to be 11.5 mi bu to stay on pace with USDA’s 1.29 bi bu demand projection. See chart.


WHEAT futures in Chicago (CBOT) closed up on Monday. The MAY’12 contract closed at $6.250/bu; up 9.25¢/bu and 8.75¢/bu higher than this time last Monday. JULY’12 wheat futures finished at $6.324/bu; up 9.25¢/bu and 11.25¢/bu higher than a week ago. Exports, risk of frost damage to US crops and increasing Chinese demand for US wheat were supportive. Compared to this time last year US exports to China for the first quarter of 2012 exports increased more than fifty times over. USDA put wheat-inspected-for-export at 24.391 mi bu vs. estimates for 16-22 mi bu. The weekly export pace needed to stay on pace with USDA’s 1.0 bi bu demand projection is 18.5 mi bu.

[Mustang Sally Farm]

Monday, April 30, 2012
Thailand Bans US Beef
THAILAND - Thailand is suspending imports of beef from the United States following the discovery of mad cow disease in California, says Tritsadee Chaosuancharoen, director-general of the Department of Livestock Development.


Washington reported on Tuesday that a cow in California had been infected with Bovine Spongiform Encephalopathy (BSE), commonly known as mad cow disease.

Imports of US beef have been temporarily halted until the department is assured that it is safe, Dr Tritsadee said on Friday, reports BangkokPost.

The suspension is in accordance with the Animal Epidemics Act, even though the imports of boneless beef cuts from animals under 30 months of age are not affected, she said.

"Thailand is safe [from mad cow] and is not at risk definitely because the Livestock Development Department has measures to prevent and control the disease," she added.

"We strictly inspect the quality and sources of foreign beef and closely monitor disease outbreaks in the country and overseas."

Dr Tritsadee said Thailand would stop importing beef and lamb from countries hit by mad cow disease immediately.

In 2011, the country imported 58,969 kilogrammes of boneless beef cuts from the US worth 29 million baht. In the first quarter of this year, the country imported 37,599kg worth 18 million baht.

Indonesia is the first country to suspend imports of US beef.

[Mustang Sally Farm]

Thursday, May 03, 2012
Beef Popularity Grows in Middle East
AUSTRALIA - While being widely recognised as our largest export destination for sheepmeat, the Middle East and North Africa (MENA) region has a growing appetite for Australian beef, says Meat and Livestock Australia.


In 2011, the MENA region was Australia’s largest sheepmeat export destination for the second year running despite declines in volumes from the heights of the previous year.

Lamb shipments reached 35,643 tonnes swt for the year (a decline of seven per cent) and mutton exports reached 39,699 tonnes (a decline of eight per cent).

At the same time, Australian beef exports have embarked on a period of explosive growth – increasing by 107 per cent over the last two years to reach 34,310 tonnes swt in 2011.

The growing popularity of beef reflects social and economic changes in the region, in particular the growing financial clout of the oil-rich United Arab Emirates (UAE). Despite a population of only 8 million people, this small country ranks as one of the world’s wealthiest with GDP per capita of more than $48,500.

Last year, the UAE replaced Egypt as our number one beef and lamb export market in the region, with Australian red meat imports to the country reaching 28,804 tonnes in 2011.

Beef imports in particular, increased sharply by 28 per cent from 5,801 tonnes swt in 2010 to 7,431 swt in 2011, with chilled beef imports reaching 3,306 tonnes swt.

The UAE also almost maintained 2010 import levels of around 12,500 tonnes of Australian lamb products in 2011.

Forecasts indicate demand is likely to strengthen, with Australian red meat well placed to seize future opportunities to deliver quality beef and lamb.

In the UAE’s foodservice sector alone, beef sales are expected to grow 152 per cent, alongside a 290 per cent increase in lamb sales by 2014. Food purchases overall are predicted to grow by 191 per cent during the same period.

To capitalise on these shifts, MLA opened its MENA regional office in the UAE’s largest city Dubai on 25 April. The office relocated across the Persian Gulf from its former location in Bahrain.

[Mustang Sally Farm]

Friday, May 04, 2012
Weekly Australian Cattle Summary
AUSTRALIA - This report is a collection of weekly cattle price summaries from each Australian state by the Meat & Livestock Australia (MLA).


West Australia
Reasonable rainfall recorded

Further rainfall has fallen across much of the agricultural regions of WA over the past seven days with several troughs crossing the coast and bringing much welcomed moisture with it. The first front seen last weekend brought moderate falls to some areas while the second later in the week was more widespread and of greater intensity. It is hoped that this will be the break to this year’s growing season with pasture levels now virtually non-existent with little feed value left in them.

Consequently supplementary feeding remains a high priority on farms especially with calving now peaking. With more moderate weather conditions being enjoyed in the northern pastoral regions mustering activity is on the rise and subsequently there should be increased volumes of cattle from these regions seen in the south in the short term. Feed conditions in the majority of the pastoral regions continues to be reported a reasonable.

Saleyard numbers increased this week with Muchea the largest of the three weekly sales. The possibility of green feed in the near future should have a negative affect on the numbers of locally bred cattle seen in the market, but this should be offset by an increase in pastoral supplies. There were again only limited supplies of heavy weight steers in physical market. Heavy weight heifer volumes were moderate, while there was a slight increase in grain assisted yearlings. Cow volumes remained solid in all three markets, while young store grades continued to have a healthy representation.

Trade demand increases

Vealer supplies were again minimal as would be expected at this time of year and restricted predominately to calf weights. Local retailer and trade demand remained solid as did restocker inquiry with solid returns recorded. There was a reasonable quality and weight evident in grain assisted yearlings this week.

Local processor demand increased slightly with slight increased in values recorded throughout the weight ranges, while medium and lighter drafts continued to enjoy a solid feeder demand. Grass finished trade weight yearling supplies were limited. These also recorded a slight improvement in both trade and demand and the values paid. There continued to be a reasonable weight and quality available in local store drafts of young cattle. Medium and heavier drafts of both steers and heifers recorded a slight increase in feeder demand with dearer values recorded.

Lightweight store steers and heifers both recorded a further increase in restocker demand, which are expectant of green feed in the short term. The limited supplies of heavy weight steers and bullocks realised firm to slightly dearer rates with this also the case in mature heifer classes. The cow market continued to record a solid processor demand which saw prime values increase to 151¢/kg on average.

Queensland
Larger numbers

A return to a full working week lifted total throughput at physical markets covered by MLA’s NLRS. Numbers across individual centres though tended to level out and in some cases, like Roma store, declined after several weeks of large sales. A combination of some rain in the supply area and the recent reduction in values generally restricted the numbers coming forward.

Overall quality across most markets was mixed and as winter draws closer the trend of young cattle dominating the selling pens continued. Buyer attendance was generally good and a few extra restocker buyers were present in the buying panel at the Roma store sale. However at a number of markets not all export processors were active.

Values for young cattle experienced a wide variation in price depending on quality as buyers become more selective. Calves returning to the paddock averaged 9¢/kg better and vealer steers also met strong competition from restockers. Vealer heifers to slaughter struggled at times with most close to the reduced levels of recent weeks. However local butchers at Warwick lifted values by 10¢/kg on a relatively small sample of top end quality lines. Prices for medium and heavy weight feeder categories turned around to regain some of the losses. Competition was subdued at markets early in the week however as the week progressed prices averaged 5¢ to 10¢/kg better.

Virtually no heavy steers and bullocks were penned at the early week markets nevertheless by mid and late week sales the general shortfall in supply lifted processor demand and average prices gained 6¢ to 8¢/kg. Cows experienced a similar trend however price improvements were confined to 1¢ to 2¢/kg.

Values generally dearer

Calves returning to the paddock averaged 9¢ dearer 218¢ with a few pens to 248.2¢/kg. The vast majority of the vealer steers also returned to the paddock at an average of 217¢ with sales to 235.2¢/kg. A large selection of vealer heifers sold to local and southern processors at 189¢ with some to local butchers at 219.2¢/kg. Lightweight yearling steers sold to restockers at 212¢ with a few to 228.2¢/kg. Medium weight C2 yearling steers to feed averaged 192¢, while the better condition lines averaged 200¢ with sales to 207.2¢/kg. Heavy feeders mostly sold around 185¢ with a few pens to 197.2¢/kg. Medium weight yearling heifers to feed and the local trade market averaged 181¢ with some to slaughter at 208.2¢/kg.

Heavy steers to export slaughter averaged just under 174¢ with some to 179¢/kg. Bullocks also averaged close to 174¢ to be 8¢ dearer with sales to 181.2¢/kg. Medium weight 2 score cows averaged 2¢ better at 120¢, and 3 scores lifted 3¢ to average 129¢/kg. Good heavy cows managed to average 1¢ dearer at 142¢ the occasional pen to 160.2¢/kg. Heavy bulls made to 176.2¢ with a fair sample at 150¢/kg.

South Australia
Smaller yardings

Cattle numbers fell at the three operating sales after last week’s lower prices that were paid. The SA LE had mixed quality runs of mainly young cattle that sold to fluctuating competition from the usual trade and export buyers. Feeder orders were also active, albeit quite selective with their purchases and breeding being the main criteria. Limited numbers of vealers remained basically unchanged. The C3 yearling steers were dearer, while B-muscled sales tended to ease. Feeder purchases of the steers were quite erratic. Limited numbers of yearling heifers were dearer to the trade, with C2 lightweight sales to feeder cheaper. Cow prices remained quite stable as most to processors.

Naracoorte’s smaller yarding after a week off due to the new roof construction will see no sale being held next week as the building continues. It was a very mixed quality yarding that sold to steady trade and export competition from most of the usual SA and Victorian buyers at generally lower levels, with only isolated sales being dearer. Feeder and restocker orders were also active and were able to lower their prices.

Mt. Gambier’s smaller yarding for the first sale in a fortnight contained very mixed quality runs of young cattle and grown steers, while cow quality was quite good overall despite some very plain quality dairy cows being yarded. Most of the usual SA and Victorian buyers were present and operating, albeit at times struggling to source enough killable young cattle. The sale tended to recoup some of the previous sale’s lost ground.

Mixed results

There were mixed results for cattle producers due to the varying quality offered and some limited trade and export competition. Vealer steers to the trade and some local butcher inquiry sold from 200¢ to 230¢/kg at unchanged prices. Feeders and restockers purchased C muscled steers from 170¢ to 210¢/kg at lower levels. Vealer heifers to the trade sold mainly between 188¢ and 221¢ with an isolated sale at 238¢, to be unchanged to 10¢/kg dearer. Yearling steer C2 and C3 medium and heavy yearling steers to wholesalers sold from 165¢ to 210¢ at prices 2¢ to 10¢/kg more. Feeder purchases on increased numbers were generally from 160¢ to 205¢/kg at mainly dearer levels. Yearling heifer C3 sales were between 165¢ and 205¢, or 5¢ to 19¢/kg dearer.

Grown steers in mainly 2 score condition sold from 160¢ to 192¢ to be 10¢ to 20¢ dearer and averaging 330¢/kg cwt. Grown heifers sold mainly from 142¢ to 184¢ to be 7¢ to 20¢/kg dearer. The beef cows attracted prices from 112¢ to 144¢, or unchanged to 4¢ dearer and generally 240¢ to 285¢/kg cwt. Restockers paid from 105¢ to 138¢ for 1 and 2 score beef cows.

New South Wales
Mixed quality

Supply increased across most yards with total throughput up 23% at markets reported by MLA’s NLRS when compared to the public holiday effected markets last week. Going against the trend was Wagga and Forbes with Wagga numbers down by around half. Supply though was 32% down on the corresponding week last year.

The regular panel of buyers was present with many providing increased competition to secure their supplies. There was also the return of southern orders at both Gunnedah and CTLX.

After the cheaper trend that has been evident lately, prices for young cattle were firm to dearer however there were some lines that were dealt further price reductions. The EYCI though has regained some of the falls of recent weeks, particularly earlier on in the week. At the completion of Thursday’s markets the EYCI was 374¢, a gain of 7.50¢/kg cwt on week ago levels.

Grown steers were in much smaller numbers and this was a factor behind them climbing 8¢ to 22¢/kg with the 0 and 2 tooth heavy steers and bullocks receiving the greatest gains. Cows also lifted 1¢ to 8¢/kg to processors as those to restockers were cheaper.

Quality was again mixed with some of the young cattle starting to lose condition. Even though the approaching winter conditions are having an effect on paddock feed and subsequent cattle quality, there still remained runs of high yielding finished cattle.

Young cattle accounted for 60% of the states throughput and to be expected for this time of year, the majority were vealers. Following the recent trend, just over 55% of the grown cattle were cows.

Prices improving

Light vealer steers to restockers mostly made from 205¢ to 210¢ after reaching 260¢/kg. The large numbers of medium weights returning to the paddock made mostly from 189¢ to 255¢ to be up to 7¢/kg dearer. Processors paid from 210¢ to 220¢/kg for medium and heavy weight vealer steers. Most of the medium weight vealer heifers were purchased by processors in the early 200¢/kg range. Those secured by restockers mostly made from 170¢ to 215¢/kg. The majority of the light yearling steers went to restockers around 201¢ to be slightly cheaper while the medium and heavy weights to feeders were fully firm in making from 185¢ to 194¢/kg. The C3 medium weights to the trade averaged 198¢ as the heavy weights lifted 7¢ to sell closer to 194¢/kg. The lightweight yearling heifers to restockers also improved 6¢ while the medium weights to feed climbed 7¢/kg. The trade paid from 160¢ to 178¢ for medium and heavy weights, which was 1¢ to 11¢/kg dearer.

Heavy grown steers mostly made from 142¢ to 202¢/kg. There were only a few bullocks offered with most selling from 163¢ to 181¢/kg. Medium D3 cows improved 8¢ to 131¢ as the heavy cows were 5¢ to 7¢ better and ranging from 136¢ to 140¢/kg.

Victoria
Supply increases

After the much reduced public holiday affected yardings last week, all markets operated and supply increased 75%. Most markets reported by MLA’s NLRS recorded greater throughput except for Ballarat, Pakenham which declined 16% and 50% respectively. The smaller yarding at Pakenham was generally due to producers withholding cattle following the recent cheaper prices. After no market last week, Leongatha was the largest yarding. In comparison to this week last year, yardings were down 30%.

Grown cattle accounted for 70% of the cattle offered with cows dominating. The young cattle were almost evenly split between the vealers and the yearlings.

Quality has remained mixed, ranging from poor quality through to over-conditioned lines particularly in the cows, through to finished cattle that had been supplementary fed suitable for slaughter. This trend is expected to continue as winter approaches. Warrnambool though was of improved quality compared to the sale a fortnight ago and was most noticeable on the yearlings with many being supplementary fed.

Prices have started to regain some of the losses incurred recently particularly those to slaughter orders. Vealers were firm to 15¢ dearer while yearlings were 5¢ to 11¢/kg dearer. An improved trend has also been evident across the other states and is highlighted by the EYCI climbing 7.50¢ on last week to finish Thursday on 374¢/kg cwt.

Dearer prices

Medium weight C muscle vealer steers to the trade mostly made from 202¢ to 208¢ as the B muscle lots generally made around 234¢/kg. The few to restockers and feeders sold from 208¢ to 234¢/kg. Heavy B and C muscle vealer steers made from 206¢ to 225¢/kg. The medium and heavy vealer heifers to the trade ranged from 186¢ to 218¢/kg with most carrying plenty of weight. Heavy yearling steers to slaughter gained 7¢ to average 199¢ after making to 226.6¢kg. Heavy C3 yearling heifers were 11¢ dearer at 189¢, while the plainer end gained 16¢ to average 196¢/kg.

Medium weight grown steers held firm around 186¢ as the heavy C3s in large numbers gained 11¢ to average 192¢/kg. The bullocks generally made around 188¢ to be up to 13¢/kg dearer. There were also a few heavy bullocks yarded that sold in the mid 180¢/kg range. Medium D3 beef cows improved 8¢ to 137¢ as the heavy D4s gained 4¢ to average 141¢/kg. The better end of the medium weight dairy cows improved 4¢ to average 115¢/kg. Heavy dairy cows made to 148.6¢ with most making form 104¢ to 146¢/kg.

[Mustang Sally Farm]

Thursday, May 10, 2012
CME: Global Meat Demand and US Export Outlook
US - USDA revised this week its estimates for global beef production and trade in 2012. The updates for some countries were particularly interesting in light of recent trade talk about global meat demand and US export outlook, write Steve Meyer and Len Steiner.


The USDA estimates are updated twice a year (April and October) and the USDA FAS does a tremendous job in bringing together an incredible amount of detail about global meat production, trade, and domestic use.

Global beef production is currently estimated at some 57 million MT (carcass wt. basis), about 0.2 per cent higher than the previous year but still about 1.5 million MT or 2.5 per cent lower than the record high in 2007. In the last 10 years, global beef output has expanded by 5.2 per cent but that increase has not come from countries that traditionally have been the primary actors in the global beef trade. Beef production in the US (the fourth largest beef exporter in the world) has contracted in the past 10 years, in part due to the impact of BSE (December 2003) which limited export markets, but also higher feed costs that undermined produce profitability.

Production in Australia and New Zealand has been for the most part steady in the past decade and it will likely show only modest growth in the coming years. On the other hand, we have seen tremendous growth in production from emerging/developing countries. It may surprise many that India has now emerged as a top global beef supplier, expected to surpass Brazil as the largest global beef exporter in 2012.

Keep in mind that Indian beef production is not from cattle (which are sacred), rather it is from buffalo bovines (carabeef). Indian beef production has expanded by almost 1.7 million MT in the past decade, much of that growth going into export markets. Indian beef exports for 2012 are forecast at 1.525 million MT, 25 per cent higher than the previous year and an almost three fold increase in the past 10 years.


The data on pork shows the outsize influence that China has in the global pork market. Pork is the meat protein of choice in China and as the Chinese economy has expanded, so has the appetite for pork. Chinese pork production in 2012 is currently forecast at 51.6 million MT. By comparison, US pork production is forecast at 10.6 million MT and EU production is forecast at 22.6 million MT.

Chinese output is expected to recover in 2012 and increase by 2.1 million MT or 4.2 per cent from the previous year. High prices in 2011 have encouraged Chinese producers to expand and the increase in domestic supply will limit imports in 2012. But even as USDA now forecasts Chinese pork imports to be about 100 million MT lower than the previous year, this still represents a significant increase from the levels we saw in 2009 and 2010.

Lower global grain prices should support some expansion in pork output not just in US and China but also in other markets. Indeed, USDA revised up its 2012 production prospects for most large pork producing countries. Current world pork production is forecast at 104.4 million MT, almost 1 million MT larger than the October forecast for 2012 and 2.7 million MT or 2.7 per cent higher than in 2011. By Q4 of 2012 exports accounted for almost 1 in 4 pounds of pork produced in the US and global expansion has significantly impacted US pork prices.

[Mustang Sally Farm]

Friday, May 11, 2012
Weekly Australian Cattle Summary
AUSTRALIA - This report is a collection of weekly cattle price summaries from each Australian state by the Meat & Livestock Australia (MLA).

West Australia
Larger pastoral supplies

There was solid rainfall across the previous weekend and into the early parts of this week that has bought the break to the growing season. Falls of up to 45mm were recorded throughout much of the agricultural regions and with the temperatures currently remaining warm there has been a very solid germination in paddocks. Conditions in the north of the state continue to reasonable with the more moderate temperatures now allowing full access to mustering with this occupation now in full swing.

Saleyard numbers varied this week. Muchea’s numbers continued to rise due to larger volumes of cattle sourced from the northern pastoral regions. The southwest sales were small with only 200 head penned for sale, while the Great Southern sale at Mt Barker saw further constriction in it’s yarding. This constriction in cattle volumes sourced from the southern Agricultural regions will continue as further rainfall is received and feed levels increase as is usual at this time of year.

The supplies of heavy weight local steers and heifers remained very tight in physical markets. This was also the case in trade weight yearlings, both grass finished and grain assisted. Cow volumes, particularly local drafts were sold in considerably lower volumes this week with heavy weight bull numbers also more constricted. These lower supplies were however offset by the increased supplies of pastoral grades with these being of a solid quality. There were also very good supplies of reasonable quality local store yearlings available.

Processor demand increases

Vealers were again confined to calf weights. Demand from the local trade and retailers, which continued to be under pinned by restocker interest, saw very solid conditions remain in these categories.

The limited volumes of grain assisted trade weight local yearling steers and heifers recorded a stronger local trade competition. This created dearer values in both sexes and all weight categories. The supplies of grass finished trade weight yearlings were all but non-existent with quality generally only moderate. The majority of these were purchased by the feeder sector at slightly dearer price levels. The solid supplies of local store yearlings enjoyed an increased competition from both the feeder and restocker sectors. All grades and categories recorded dearer prices.

The prices for heavy weight steers, bullocks and heifers, both local and pastoral drafts received stronger demand. The smaller supplies of cows penned this week enjoyed a further increase in processor demand. This stronger demand saw prime heavy weight sales rise a further 2 to 3c/kg peaking at 161c/kg lwt. Heavy weight bull prices also increased due to a stronger processor demand with rates in the Great Southern up to 15¢/kg lwt dearer.

New South Wales
Supply lifts

Yardings increased 38% again as the majority of centres reported by MLA’s NLRS offered greater numbers. Gunnedah recorded the largest yarding since November last year while CTLX was one of the largest prime markets since the market commenced. The firm to dearer trend of recent weeks along with fine weather in some parts of the state as well as the approaching winter were factors behind supply increasing.

The trend of mixed quality was again evident. The better end of the slaughter cattle had generally had access to supplementary feeding or were crop finished. Competition was from the recent panel of buyers although at Wagga not all the usual feeder buyers were in attendance. Armidale late in the week was also missing a number of regular orders. Young cattle accounted for 68% of the states throughput with greater numbers of vealers penned. Cows accounted for almost 60% of the grown cattle.

Trade cattle were firm to dearer while later in the week a cheaper trend was evident. Even though some processors are booked a week or two in advance with direct cattle, those meeting specifications were firm to 8¢/kg dearer with the yearlings receiving the largest gains.

Solid demand has been evident across the eastern states as well. This was highlighted by the EYCI climbing 0.25¢ to 374.25¢/kg cwt at the completion of Thursday’s markets.

Most of the grown steers offered were heavy weights which improved 1¢ to 6¢/kg as the bullock portion were fully firm. The light and medium weight cows to processors were firm to dearer however the heavy weights sold to a mixed trend.

A dearer trend

Large numbers of medium weight vealer steers were purchased by restockers from 212¢ to 216¢ with sales to 244.2¢/kg. Medium and heavy weights to the trade range from 202¢ to 213¢/kg. Medium and heavy weight vealer heifers to the trade ranged from 198¢ to 202¢ with the heavy weights making to a top of 233¢/kg. Medium weight C3 yearling steers to the trade gained 8¢ to 207¢ as the heavy C3s improved 2¢ to 196¢/kg. Medium and heavy weights to feeders ranged mostly from 190¢ to 197¢ to be up to 5¢/kg dearer. Light and medium weight yearling heifers to feeders were firm to 10¢ dearer however some of the medium weights to restockers lost 5¢/kg. Medium and heavy weights to the trade were slightly dearer in making from 183¢ to 188¢/kg.

Heavy C3 grown steers gained 5¢ to average 188¢, while the C4s were fully firm at 194¢ after making to 200¢/kg. The few bullocks ranged from 176¢ to 187¢/kg. Medium weight D2 and D3 cows were firm to slightly dearer and averaged 123¢ and 132¢/kg respectively. A fair number of medium weights returned to the paddock around 126¢/kg. Heavy cows made to 150¢ as the D3 and D4s generally sold in the mid to late 130¢/kg range.

Queensland
Steady supply

Despite the absence of the Toowoomba sales due to the public holiday and a reduced yarding at Dalby, overall supply at physical markets covered by MLA’s NLRS hovered around last weeks level. This was due to increased numbers at both the Roma sales plus a few extra at Warwick.

The change in the season was reflected in overall quality, and as the first of the frosts appear young cattle made up 60% of total numbers yarded. With a few areas starting to dry off values for calves and vealer steers tended to ease around 4¢ to 8¢/kg. A fairly large sample of vealer heifers to slaughter varied in price from centre to centre and for the week averaged 5¢/kg cheaper. A large run of good quality lightweight yearling steers suitable for restockers were penned and the overall high standard managed to push prices up by 6¢/kg. Domestic medium weight yearling feeder steers struggled to maintain the previous week price averages and in places lost around 5¢/kg. However heavy feeders went against this trend and despite not all feeder operators being active in the market the remaining buyers were able to absorb the supply plus lift average prices by 2¢/kg.

Bullocks to export slaughter experienced a mixed trend and across all markets for the week averaged 2¢/kg cheaper against the solid gains of the previous week. Demand for cows also varied in places and gained ground at Warwick but lost value at late week sales nevertheless overall average prices for the week on good heavy cows experienced very little change.

Some cattle cheaper

Calves returning to the paddock averaged 8¢ cheaper at 210¢ and sold to 238.2¢ while slaughter descriptions averaged 197¢/kg. Vealer steers to restockers averaged 4¢ less at 213¢ with a few to 235.2¢/kg. Vealer heifers to slaughter lost 5¢ to average close to 184¢ while a small selection of top end quality lines sold to local butchers at 218.2¢/kg. A large supply of lightweight yearling steers to restockers made to the occasional 244.2¢ with most around 217¢/kg. The largest number of medium weight yearling steers to feed averaged 5¢ cheaper at 195¢ with sales to 211.2¢/kg. Heavy yearling steers to feed averaged around 188¢, the occasional well bred pen to 200.2¢/kg. Lightweight yearling heifers to the trade averaged 188¢ while a large sample sold to restockers at 203¢/kg. Good medium weight yearling heifers to feed averaged 171¢ and the D muscle lines made closer to 153¢/kg.

Heavy steers to export slaughter averaged 174¢ and sold to 183.2¢ while the bullock portion made to 178¢ to average 2¢ cheaper at 172¢/kg. Medium weight 2 score cows averaged 116¢ and 3 scores 130¢/kg. A fairly large sample of good heavy cows experienced no change in price at 142¢ with a few to 158.2¢/kg.

South Australia
Small yardings

The SA LE had a smaller yarding that featured mainly young cattle with supplementary fed yearlings attracting strong demand from the usual trade and export buyers.

Lines of well-bred vealers and store conditioned yearling steers attracted strong competition from feeder buyers who had their numbers boosted by an additional order. Small numbers of pastoral bred lightweight C1 and C2 yearling steers sold from 127¢ to 172¢/kg. Vealer steers were in limited numbers to the trade and feeder orders with all sales rising above 200¢/kg.

Lightweight and a few medium weight yearling steers sold to feeder activity at much dearer levels. The trade sourced C and B muscled medium and heavyweight yearling steers also at improved prices. Only a handful of grown and manufacturing steers and grown heifers were penned, with the small lines of beef cows selling from 110¢ to 154¢/kg.

After some more useful rainfall over the past week and following the dearer trend of past weeks Mt. Gambier’s numbers remained similar. Most of the usual SA and Victorian trade and export buyers were operating, albeit selectively at times. Feeder and restocker orders were also quite active on a mixture of young cattle, plain quality 1 score beef cows possibly in calf, and lightweight bulls.

Millicent’s much smaller yarding for its fortnightly sale contained young cattle, mainly manufacturing grown steers, beef and a few dairy cows in mixed quality runs that sold to limited trade and export competition due to the small numbers available. Feeder orders were also active on suitable well bred young cattle at mainly dearer levels.

Variable prices

The varying quality yarded combining with some limited trade and export competition led to erratic trends on most categories.

Limited sales of vealer steers to the trade sold from 203¢ to 238¢ with C3 sales 11¢ to 19¢/kg dearer. The C1 and C2 lightweight steers to feeder and restocker activity sold from 185¢ to 216¢/kg. Vealer heifers in small numbers to the trade sold between 180¢ and 214¢, with C muscled sales 2¢ to 27¢ cheaper and the D muscled 17¢/kg dearer. Yearling steer C3 medium and heavyweights sold from 180¢ to 210¢ with B-muscled sales to 224¢ at prices 5¢ to 6¢/kg more. Feeders sourced C2 medium weight steers from 182¢ to 207¢/kg at dearer levels. Yearling heifer C3 sales ranged from 163¢ to 200¢ with the medium weights 14¢ dearer, while the heavyweights were 9¢/kg cheaper.

Limited sales of C2 and C3 grown steers sold generally from 173¢ to195¢, or unchanged to 7¢ dearer and averaging 345¢/kg cwt. The beef cows sold from 110¢ to 154¢ at basically unchanged prices, and mainly 235¢ to 285¢/kg cwt. Friesian heavyweights sold from 122¢ to 135¢ to be unchnaged to 6¢/kg dearer.

Victoria
Supply climbs again

Following on from the larges yarding last week, supply increased a further 20% across all markets reported by MLA’s NLRS. Just over half the cattle offered were at Leongatha, Pakenham and Wodonga. When compared to the corresponding week last year, yardings are up 43%.

The extra supply though had an impact on quality at a number of centres as more plainer cattle were offered. This is to be expected at this time of year with the cooler weather impacting pastures and livestock. Pakenham early in the week though had some good supplementary fed yearlings and bullocks, while at Bairnsdale there were increased numbers of high yielding heavy vealer steers.

Young cattle accounted for just 33% of the total throughput with yearlings only just out numbering the vealers. Most of the young cattle offered were medium and heavy weights. Cows represented just over 31% of the states yarding with around 46% being dairy cows, while grown steers accounted for 22%. Similarly to the young cattle, the grown cattle were carrying plenty of weight.

Young cattle generally sold to a mixed trend as the vealers were mostly firm to cheaper. The yearling steers were firm to a couple of cents dearer while the heifer portion was generally cheaper. At the close of Thursdays markets the EYCI was 374.25¢ which was up 0.25¢/kg cwt on week ago levels.

Heavy grown steers were 3¢ either side of firm as the bullocks were mostly cheaper with the lean lines most affected. Medium and heavy beef cows were firm to cheaper as the dairy portion was cheaper.

Mixed prices

Heavy muscled and high yielding B muscle vealer steers to the trade made to 240¢ with most of the medium and heavy weights making from 218¢ to 221¢/kg. The C muscle medium and heavy weights ranged from 201¢ to 216¢//kg. Medium weight vealer heifers were 9¢ to 11¢ cheaper as the heavy B muscle lines lost around 8¢/kg. The heavy C3s slipped 3¢ to average 206¢/kg. Medium weight C3s to the trade improved 1¢ to 207¢ as the heavy weights were firm around 199¢/kg. Feeders mostly paid from 188¢ to 193¢/kg. Heavy yearling heifers to the trade averaged 186¢ to be 3¢/kg cheaper.

Heavy C3 steers eased 2¢ to 191¢ as the C4s improved 3¢ to average 192¢/kg. The bullocks offered generally made from 178¢ to 186¢/kg. Medium weight D3 beef cows lost 8¢ to 130¢ with sales to 145¢/kg. Heavy D4 cows reached 152¢ to average 141¢/kg to be fully firm. Medium weight D1 dairy cows eased 3¢ to 112¢ as the D2s lost 6¢ to average 119¢/kg. The heavy dairy cows were in large numbers as the D1s were slightly cheaper with most around 117¢ as the 2 and 3 scores ranged from 125¢ to 132¢/kg.

[Mustang Sally Farm]

Thursday, May 17, 2012
Breed, Body Condition Impact Cow Fertility
AUSTRALIA - Breed and body condition have a critical impact on fertility, according to preliminary results from Cash Cow research presented at Beef Australia 2012.

An overview of the Cash Cow project presented at Beef Australia 2012 gave producers insights into the range of factors impacting on fertility rates of cows post calving.

Preliminary data from the MLA-funded Northern Australian Beef Fertility Project (Cash Cow) has demonstrated a substantial variation in reproductive performance in herds throughout Queensland, Northern Territory and the Kimberley.

Professor Mike McGowan, project leader from the University of Queensland, honed in on lifting breeding performance at the MLA producer seminar at Beef Australia. His colleague Dr Geoffry Fordyce from the University of Queensland looked at various ways of measuring the efficiency of breeding herds.

Prof McGowan’s presentation examined factors impacting on the percentage of cows pregnant four months after calving and factors impacting on the percentage loss between confirmed pregnancy and weaning.

His analysis showed two key factors stand out as making a difference:

Bos indicus females had a lower percentage pregnant by four months after calving and a higher risk of loss between pregnancy and weaning than composite or Bos Taurus females;
Body condition prior to calving had a significant effect on re-conception rates (see next week’s edition of fridayfeedback for more on this topic)
Cash Cow data was collected from two reproductive cycles during the project’s study of 60,000 cows from 78 commercial properties over 2009-10. It is being used to identify realistic benchmarks for major reproductive traits such as annual pregnancy rates based on the value achieved by the upper 25 per cent of herds in the study.

[Mustang Sally Farm]

Beef/Cattle

Cattle and Beef Sectors Mostly Take Recent Events In Stride

Drought effects continue to diminish in the United States except for some areas in the Southeast and Southwest. However, most of the northern half of Mexico remains under drought conditions, resulting in a 22-percent year-over-year increase in year-to-date (weekly AMS data through May 5) imports of Mexican feeder cattle into the United States. Corn planting and emergence in the United States is well ahead of last year and the 5-year averages. Similarly, 88 percent of winter wheat is in fair-to-excellent condition leading to a decline in wheat prices. With wheat prices below corn prices, feeding with wheat could alleviate some of the pressure of high corn prices on cattle-feeding profit margins.
 
Federally inspected (FI) slaughter of beef cows has declined steadily since last fall when beef cows represented as much as 60 percent of total (weekly) FI cow slaughter. The cow-calf sector is enjoying high prices for both cull cows and feeder cattle and, despite record-high input costs, is one of two sectors of the cattle/beef industry experiencing positive profit margins—the other being beef packers, since early this month. Feeder cattle prices have dipped from their 2012 record levels of February and March due to declines in stocker calf spring/summer grazing demand and increasing cattle-feeding losses, but they are expected to increase later this year and in 2013.
 
Cattle feeders continue to experience negative feeding margins due to higher costs of feeder cattle and feed. Feed-grain prices are expected to moderate slightly through the spring and summer of 2012, but feeder cattle and soybean meal prices are expected to increase during the same period. Without a significant improvement in fed cattle prices and lower feed and/or feeder cattle prices, feeding margins will not improve.
 
The situation does not appear likely to improve until later in 2012 or early 2013 when new-crop corn prices decline. Weaker corn prices are likely to be accompanied by relatively high protein-meal prices because of an apparent shift from soybean acreage to corn acreage, leading to the expectation of higher supplies of new-crop corn and associated price declines. Another factor offsetting lower new-crop corn prices is anticipated increases in feeder cattle prices over the remainder of 2012 and throughout 2013 in response to the tightest feeder cattle supplies in decades.
 
In hindsight, cattle and beef prices appear to have reached a seasonal spring high early this year, consistent with recent and anticipated weather patterns and their effects on weight gains by cattle in feedlots through the past mild winter. While seasonal price patterns would typically be lower during the summer, the highest prices for 2012 are anticipated to occur during the second half of the year. Based on normal seasonal price patterns, wholesale beef markets appear to have weathered the bovine spongiform encephalopathy (BSE) and lean finely textured beef (LFTB) storms of March and April 2012 without serious price damage. An exception is the market for 50-percent lean trim. Although short-term impacts are negative, the future outcome for LFTB and 50-percent lean beef trim demand and prices is uncertain and will depend on how consumers respond to LFTB. Prices for 90- percent lean beef have increased steadily since reaching a low in September 2011.
 
Otherwise, price impacts as a result of the April 23 BSE event have been limited primarily to most live and feeder cattle futures price contracts declining by their daily allowable limit on April 24, 2012, followed by a quick recovery. In the meantime, packer margins have improved to show positive returns for the first time since last September. Retail beef prices continue near their highest levels, averaging $5.05 per pound for Choice beef and a record $4.70 per pound for allfresh beef in April.

Beef/Cattle Trade

First-Quarter U.S. Beef Exports 12 Percent Lower

Beef exports in the first quarter of this year have been sluggish compared with a year ago, perhaps due to a slightly strengthening U.S. dollar through first-quarter 2012. U.S. beef exports were lower year-over-year to Japan (-4 percent), Mexico (- 11 percent), South Korea (-41 percent), and Hong Kong (-19 percent). Exports to Egypt and Vietnam were higher, year-over-year, by 31 and 37 percent, respectively. Total U.S. beef exports are expected to decrease in the third and fourth quarters of 2012 compared with year-earlier levels as less beef is available for export. U.S. beef production is expected to be 5 and 8 percent lower in the third and fourth quarters of 2012, and exports are expected to be 9 percent and 6 percent lower in those quarters. Beef export levels in 2013 are expected to be only slightly (1 percent) below forecast 2012 levels, at 2.65 billion pounds.

First-Quarter U.S. Beef Imports 27 Percent Higher

U.S. beef imports for 2012 are forecast over 18 percent higher, year-over-year, at 2.4 billion pounds. First-quarter imports were 26 percent higher compared with a year earlier Imports were 91 and 4 percent higher, year-over-year, from Australia and New Zealand and 13 and 40 percent higher from Canada and Mexico, respectively. U.S. beef imports for the second, third, and fourth quarters of 2012 are forecast to be 12, 16, and 22 percent higher year-over-year. Increased imports are expected from Oceania, as improved pasture conditions in Australia and New Zealand have boosted carcass weights and production in those countries. Strong U.S. demand for processing beef, amid tightening U.S. production, is expected to at least partly offset the higher Australian dollar and to support higher imports of beef to the United States. U.S. beef imports from North American trading partners Canada and Mexico are also expected to remain strong compared with year-earlier levels. Growth of 8 percent in the U.S. beef import market is forecast for 2013, totaling 2.6 billion pounds.

Higher Mexican Cattle Imports Offsetting Lower Imports from Canada

U.S. cattle imports through the first quarter are fractionally higher compared with the same period a year ago. Lower imports from Canada have been offset by higher imports from Mexico through the first quarter of 2012. Cattle imports from Mexico were 24 percent higher than in 2011 through March. The continued increase of cattle imported to the United States from Mexico stems from the severe drought conditions that were—and in some cases, still are—present in the southern tier of the United States throughout last year and which extended into northern Mexico.

Present export rates of cattle from Mexico may be; however, it remains to be seen whether, and to what extent, Mexican cattle exports to the United States may drop off as the year progresses. This may be largely dependent on weather patterns and if pasture conditions improve.

In the first quarter cattle imports from Canada were 5 percent below a year ago. According to AMS weekly reports, imports of slaughter steers/heifers and cows through April are 11 and 18 percent below year-earlier levels compared to the same time period last year. The lower import levels are likely due to Canadian producers being in the midst of herd rebuilding and retaining females for breeding. Imports of Canadian feeder cattle, however, are 69 percent higher than a year ago, due to a sluggish spring Canadian feeder cattle market and a stronger price incentives in the United States. Total U.S. cattle imports for 2012 are forecast at 2.075 million head and at 1.95 million head in 2013, or 6 percent lower year-over-year.
 


Dairy

Milk Production Continues Robust Expansion While Prices Soften; in 2013, a Modest Production Increase Could Help Support Prices

Corn prices are moderating for both the current crop year and for 2012/13. The corn price is projected to be $5.95 to $6.25 a bushel in 2011/12, a decline from April’s projected price and to slip to $4.20 to $5.00 a bushel next year. Higher corn plantings and higher expected yield could lead to a record-high corn supply in 2012/13 despite tight carryin stocks. The recent Crop Progress report showed a crop well ahead of average development for this time of year. While this is no guarantee of above-average yields, it minimizes the risk of yield loss due to late planting. Soybean meal prices continue to inch upward; this month’s forecast calls for soybean meal prices to average $360 a ton for the current crop year, up from April’s forecast. For 2012/13, prices are forecast at $335 to $360 a ton. The April Agricultural Prices reported the preliminary estimate of alfalfa hay prices at $207 per ton. Hay prices could move downward with the 2012/13 crop. The benchmark 16-percent protein dairy ration was calculated at $11.20 per cwt for January-March 2012. Given crop price forecasts, the ration value will likely head down later this year and could fall further in 2013. For dairy producers, the welcome relief from high feed prices will likely be countered by lower milk prices for the balance of 2012, with some recovery likely in 2013. On balance, the milk-feed price ratio is not expected to signal expansion until later in 2013.
 
The total number of milk cows for 2012 was raised slightly from April to 9.23 million head. The Milk Production report indicated higher than expected cow numbers and, despite weakening returns, producers were not reducing herds as quickly as expected. May is the first month for 2013 forecasts. The dairy herd in 2013 is expected to decline to 9.17 million head, reflecting 2012’s high feed prices and lower milk prices. Milk per cow for 2012 was boosted to 21,880 pounds from the April projection. Production per cow is forecast at 22,100 pounds for 2013. The rise in milk per cow this year is due to nearly ideal production conditions in much of the United States. Next year’s projected increase in production per cow reflects the moderating feed price outlook. Production for 2012 was raised this month to 201.9 billion pounds. The initial forecast for 2013 is for production to reach 202.6 billion pounds, based on higher output per cow.
 
Milk-equivalent imports on a fats basis are forecast at 3.3 billion pounds for both 2012 and 2013 and 5.4 and 5.2 billion pounds for 2012 and 2013 respectively on a skims-solids basis. Milk-equivalent exports on a fats basis are projected at 8.5 billion pounds in 2012, rising to 8.7 billion pounds next year. Exports on a skimsolids basis are estimated at 31.5 billion pounds this year and 32.4 billion pounds in 2013.

Higher than expected milk production and weaker-than-expected demand led to lowering of the 2012 prices for the major dairy products in May, except for whey. The cheese price was lowered to $1.555 to $1.605 per pound, butter was reduced to $1.425 to $1.505 per pound, and the nonfat dry milk price was revised to $1.235 to $1.275 per pound. The whey price was increased to 56.0 to 59.0 cents per pound as it appears demand is stronger than expected earlier. Next year’s milk production increase is modest, keeping with the herd-size declines, in response to 2012’s high feed prices and lower milk prices. Higher forecast exports and continued firm domestic demand should strengthen 2013 prices. The 2013 cheese price is forecast at $1.600 to $1.700 per pound, butter at $1.465 to $1.595 per pound and NDM at $1.320 to $1.390 per pound. Whey prices are forecast at 55.5 to 58.5 cents per pound, very near 2012 prices.
 
Milk prices for 2012 were revised downward based on lowered product prices. The Class III price is projected at $15.80 to $16.30 per cwt, the Class IV price was lowered to $14.50 to $15.10 per cwt and all milk is projected at $16.90 to $17.40 per cwt. In 2013, milk prices should recover. The Class III price is forecast at $16.20 to $17.20 per cwt, the Class IV price is forecast to rebound to $15.40 to $16.50 per cwt and the all milk price is expected to climb to $17.25 to $18.25 per cwt.

[Mustang Sally Farm]

Monday, May 21, 2012
Abattoirs in Welfare Footage on Approved Export List
ANALYSIS - An Australian government investigation into footage of animal cruelty in four Indonesia abattoirs has concluded that two of the abattoirs were approved under a government scheme. The report also suggests that regulatory action be taken against two exporting companies, North Australian Cattle Company Pty Ltd (NACC) and International Livestock Export Pty Ltd (ILE), writes Charlotte Johnston, TheCattleSite editor.
 


On 24 February 2012, the Department of Agriculture, Fisheries and Forestry (DAFF) received a formal complaint from Animals Australia alleging non–compliance with animal welfare guidelines that might involve cattle exported from Australia to Indonesia under an approved Exporter Supply Chain Assurance System (ESCAS). The complaint included video footage that Animals Australia said had been made on 24–26 January 2012. DAFF also received an RSPCA Australia analysis of the same video footage.

DAFF’s investigation of the complaint identified four abattoirs shown in the video footage. DAFF considered that four exporters had the potential to have an approved ESCAS that could have a link to an abattoir in the video footage.

The investigation determined that the slaughter lines shown in the video footage at two of the four abattoirs were part of an approved ESCAS for two exporters, and the slaughter lines at two abattoirs were not part of an approved ESCAS for any exporter.

At the two abattoirs determined to be part of an approved ESCAS, DAFF considers the cattle shown in the video footage made at one of the abattoirs to have been sourced from Australia. In the other abattoir, DAFF considers the cattle are highly likely to have been sourced from Australia.

At both these abattoirs, DAFF considers there to evidence of non–compliances with ESCAS animal welfare performance measures and targets.

The department has investigated the footage taken at the other two abattoirs and will not be taking any action as there is no evidence the animals involved were sourced from Australia.

Action against exporters

The investigation recommends that the Secretary take regulatory action with regard to the two exporters, North Australian Cattle Company Pty Ltd (NACC) and International Livestock Export Pty Ltd (ILE) with an approved ESCAS that each included an abattoir where non–compliances with ESCAS animal welfare performance measures and targets occurred.

Phillip Glyde, Deputy Secretary, DAFF said that the regulatory action taken compromises of removing the two abattoirs identified in the footage from each of these two exporters’ approved supply chains.

Additional conditions will also be placed on the two exporters, including having animal welfare officers present in all abattoirs in their approved supply chains where cattle are slaughtered using a modified Mark 4 restraint box without stunning.

The intensity of auditing of the exporter’s approved supply chains, where cattle are slaughtered using a modified Mark 4 restraint box without stunning, will also be increased.

Mr Glyde said that the exporters at this time did not face having their export licence removed.

"If further animal welfare breaches occur in these exporters’ supply chains, they face additional penalties under the relevant legislation, including the possible loss of their export license," he said.

In a statement, Elders has said that the one abattoir (out of 22) was found to not have performed satisfactorily against five performance measures, it confirms that the non compliance had nothing to do with animal cruelty.

"Elders considered the suggestions of non-compliances at Petir 1 to be extremely concerning, and acted immediately once it was advised that grounds existed for investigation of the abattoir’s performance in satisfying all of the ESCAS requirements under which it receives cattle from NACC."

Elders said it continues to endorse and support the ESCAS protocols.

"These non-compliances noted at Petir, whilst disappointing, also represent a small fraction of throughput under the new system. This is an outcome which, given the intensity of ESCAS requirements and the sheer scale of change in an accelerated timeframe it has required from many Indonesian stakeholders, is understandable whilst also being encouraging for the achievement of satisfactory compliance."

CEO of the Australian Livestock Exporters’ Council, Alison Penfold praised the two exporters involved for undertaking the necessary remedial action immediately upon notification of operational deficiencies, thus ensuring they comply with the requirements of ESCAS.

Ms Penfold said the new export arrangements have helped transform the way Australian animals are managed through the export supply chain. Standards have been raised and the welfare processes and practices that sit behind the new regulatory system, ESCAS, continue to improve.

"Even so, exporters are concerned that the Government’s regulatory response fails to credit the remedial work undertaken by the two exporters involved and is unnecessarily heavy handed in placing additional requirements on other facilities," she said.

“The Governments response adds significant extra cost burdens to the supply chain and does not take into account that the ESCAS is a new system which sets unprecedented requirements on the exporters that must be delivered in developing countries.

“To increase compliance measures on to other facilities which were not party to the investigation and which are operated and staffed separately is a serious regulatory overreach.

"The industry remains committed to ESCAS and the wellbeing of the animals as they pass through the supply chain. While any instances of non-compliance are regrettable, what this DAFF report highlights is how just quickly industry responds to isolate and fix problems when they arise in order deliver the required standards of animal welfare.”

The two other exporters initially identified by DAFF as potentially linked to the video footage were fully cleared of having any connection with the investigated footage. DAFF determined that these two exporters, Australian Rural Exports Pty Ltd (Austrex) and Wellard Rural Exports Pty Ltd (Wellard), did not have either of the relevant slaughter lines in their approved supply chains at the time the footage was taken.

In addition, DAFF agrees that the cattle filmed in the relevant sequences were not sourced from Australia. Accordingly, these exporters were excluded from any further part in the investigation.

Further action to be taken

The investigation also makes three general observations, including that additional requirements could be placed on all future export applications and that the Australian Chief Veterinary Officer conduct a further investigation into the Mark 4 restraint box when used without mechanical head and neck restraint.

Commenting on this, Australian Chief Veterinary Officer, Mark Schipp said: "I agree that a new assessment of the modified Mark4 restraint box is required. As Australia’s Chief Veterinary Officer I share the public’s concerns around the welfare of the animals featured in the footage under investigation.

The last assessment of Mark 1 and 4 restraint boxes was conducted in August 2011.

"That assessment found that proper use of the Mark 4 box for restraining and casting cattle for non-stun slaughter generally complied with elements of the OIE Code—Chapter 7.5 Slaughter of Animals.

"The more recent footage raises new concerns that were not apparent at the time of these earlier assessments. I consider them substantial enough to require further investigation."

Dr Shipp said that work on the report will begin immediately.

This investigation has taken place under Australia’s new regulatory system for live animal exports – ESCAS. The system includes procedures to investigate allegations of animal welfare breaches and to take appropriate action where required. The investigation also makes observations directed towards closing information and risk gaps that the investigation has revealed in the current process for approval of an ESCAS.

[Mustang Sally Farm]

Friday, May 25, 2012
Weekly Australian Cattle Summary
AUSTRALIA - This report is a collection of weekly cattle price summaries from each Australian state by the Meat & Livestock Australia (MLA).

New South Wales
Supply eases
Supply reduced significantly across MLA’s NLRS reported sale yards with total states throughput back 24 per cent. The greatest reduction in numbers came from Dubbo with 33 per cent less yarded week on week. CTLX also experienced significant reductions to supply with just over 3,600 head yarded. At Gunnedah numbers almost halved and Forbes had almost 500 less cattle available. Throughput at Armidale and Casino has decreased 20 per cent and 25 per cent, while Tamworth was back 33 per cent. Inverell and Wagga centres remained relatively firm while Goulburn experienced a reduction of 37 per cent albeit off a low base. Vealer and yearling steers and heifers were all in about equal supply however there were significantly less grown steers and heifers available. Cows remained in good numbers and were primarily heavy weights. Lightweights made up the majority of the bull supply.

The reduction in numbers also brought about a reduction in overall quality with many secondary types yarded. There were an increased number of unfinished cattle that producers elected to offload rather than carry through the cooler months. While the variation in quality was larger than last week the New England and North West centres reported some good quality young cattle still available. Trade buyer attendance remains strong with the majority active across all weights and categories. Restockers and feeders were also reasonably active despite the onset of the cooler weather.

Prices were mixed however the majority of categories were firm to dearer. The Eastern Young Cattle Indicator (EYCI) finished 3¢ higher for the week on 366.5¢/kg cwt.

Prices Firm
Despite a reduction in quality prices remained held ground with restocker interest assisting young cattle prices.

Light vealer steers to restock were 5¢ higher to average 213¢ while the medium weights were up 1¢ to also settle on 213¢/kg. Heavy weight vealers were 4¢ higher on 207¢ while those to feed slipped 2¢ to 200¢/kg. Medium weight vealer heifers to restock and process were firm making 191¢ and 192¢/kg respectively. Heavy weight vealer heifers to the trade made 215¢ to be 11¢/kg higher. Medium weight yearling steers to feed were up 1¢ to 194¢ and those to restock held firm on 192¢/kg. Heavy yearling steers to slaughter were also unchanged on 189¢/kg. Restockers and Feeders purchased the majority of yearling heifers and prices averaged 184¢/kg.

Heavy grown steer prices were back 3¢ to 181¢/kg while the C4 bullocks were 9¢ higher on 184¢/kg. Light grown heifers were 2¢ higher on 166¢/kg. Cow prices were mostly higher with the light weight D2’s to process up 1¢ to 118¢/kg. Medium weight cows to slaughter slipped 1¢ to 125¢ and the heavyweights held firm on 134¢/kg. Light weight bulls were back 6¢ to 156¢ and the heavy portion was 1¢ 146¢/kg.

Queensland
Supply eases
The yardings across MLA’s NLRS markets reduced by 7 per cent, losing ground on last week’s jump. While yarding trends were mixed, the larger markets at Dalby and Roma store reduced 13 per cent and 9 per cent, respectively. Longreach, Mareeba and Moreton had the largest reductions, with numbers falling by half. The supply at Murgon doubled while Roma Prime experienced a 12 per cent increase. The Toowoomba markets combined yarding along with that at Warwick remained firm.

The majority of the yarding was comprised of yearlings, with more steers than heifers. Grown cattle and the majority of steers made the next largest yarded category. There was a strong supply of cows and vealers, while calves and bulls were limited.

With the cool wintry conditions encroaching, cattle have stated to loose condition, with high amounts of cattle pushed into the market. All the usual buyers were present and included some major returning export processors to the buying field. This helped strengthen competition. Operators were keen to make purchases, to secure adequate numbers while prices were firm.

Restockers at Toowoomba helped to boost competition, while feeder operators maintained their strong support on suitable lines of young cattle. Export slaughter lines of heavy steers, bullocks and cows improved in price. Light, medium and heavy weight yearling steers met strong support from feeder buyers at Dalby with prices generally improving. It was an enhanced quality yarding at Roma Prime sale with grown heifers pushing prices up. Roma store numbers returned to normal and all categories were well represented.

Young cattle dearer
The large majority of calves to restockers and processors ranged from 180¢ to 232¢ to average 205¢/kg. Young cattle generally sold to a firm market with the only adjustments made in price due to quality. Medium weight vealer steers sold from 190¢ to 230¢ to be unchanged in price on 215¢/kg. Medium weight vealer heifers ranged in price from 150¢ to 209¢ to average 186¢/kg. Light yearling steers to restockers sold 8¢ higher on 216¢, medium weights averaged 201¢ and the heavy weights to feeder orders were firm on 190¢/kg. Light yearling heifers to restockers sold 13¢ stronger on 193¢, medium weights to feeders were 6¢ higher on 172¢, while heavy weights lost 3¢ to settle on 162¢/kg.

Heavy grown steers sold 2¢ lower on 171¢, while a large sample of bullocks averaged around 172¢/kg. Heavy cows ranged in price from 126¢ to 155¢ to be firm on 141¢/kg. Heavy bulls were unchanged in price to average around 148¢/kg.

At the conclusion of Thursday’s markets the Queensland yearling steer indicator averaged 190.9¢, while yearling heifers settled on 186.3¢/kg lwt. The heavy steer indicator averaged 171.4¢, while bullocks were on 171.9¢/kg lwt. Medium cows and heavy cows settled on 129.2¢ and 136.9¢ lwt, respectively.

South Australia
Numbers slip
While the SA LE’s numbers increased, Naracoorte’s and Mt. Gambier’s yardings fell. The Millicent sale was cancelled this week due to a lack of numbers. Mt. Gambier’s 533 cattle would have been one of the smallest Wednesday yardings for quite some time with the weekly average this year well over 1,200 head.

Quality improved at the SA LE and sold to the usual local and interstate trade and export buyers in a fluctuating sale. Feeders were active at dearer levels on well-bred lightweight vealers and yearling steers and heifers. Limited numbers of vealer steers were yarded and sold at slightly dearer levels to a mixture of trade and feeder activity. Most vealer heifers sold to feeder inquiry at lower prices, while being dearer to the trade. The small numbers of grown steers, grown heifers and manufacturing steers were dearer, while cow prices remained reasonably stable.

There was an improvement in the quality at Naracoorte with a greater number of supplementary fed cattle yarded. However, state-wide the offering remained mixed and sold to fluctuating competition from a small number of regular trade and export buyers. Feeder and restocker orders were quite active over a wide range of weights and quality of young cattle and lightweight bulls. While some sales of young cattle were dearer, others including better quality cows tended to lose ground.

Mt. Gambier’s very mixed quality yarding of young cattle and grown steers in mainly 2 score condition, featured one bullock that topped the scale at 1,015kgs. While some categories attracted a dearer trend, others were generally cheaper due that varying quality.

Varying prices
There were fluctuations in prices paid this week due to the varied quality that greeted buyers.

Vealer steers on limited trade purchases were from 200¢ to 220¢ or 2¢ to 6¢/kg dearer. Feeders sourced C2 lightweight steers from 197¢ to 209¢ at prices unchanged to 3¢/kg more. Vealer heifers to mainly trade competition sold from 195¢ to 222¢, with C3 lightweights 14¢ dearer and medium weights 3¢/kg cheaper. Medium and heavy C3 yearling steers to the trade sold from 170¢ to 220¢ to be 5¢ to 9¢/kg dearer. Feeders sourced large numbers of light to heavy C2 steers from 160¢ to 204¢, at prices unchanged to 12¢/kg more. Yearling heifer C3 sales in limited numbers were between 169¢ and 207¢ at prices 4¢ to 8¢/kg cheaper.

Grown steer B2, C2 and C3 mainly medium weight sales were from 165¢ to 192¢, as carcase weight prices averaged 335¢/kg. Cow prices remained unchanged as beef 3 to 5 scores sold from 122¢ to 143¢, with the 2 scores 100¢ to 132¢/kg. This tended to leave most selling between 240¢ and 280¢/kg cwt.

Victoria
Quality suffers
Cattle throughput at MLA’s NLRS reported markets reduced 3 per cent to total 10,850 head. There were mixed yarding trends across selling centres. There were increased numbers at Bairnsdale, Ballarat, Warrnambool and Leongatha which grew by 20 per cent. The remainder recorded reductions, with Shepparton yarding 20 per cent fewer cattle and Wodonga having 20 per cent less.

Last year’s production of vealers is running dry, with very few pens of prime milk veal offered. Most vealers presented were on the heavier end as were many yearlings. Overall there were good numbers of young cattle available. Grown cattle, mostly grown steers and bullocks made up a large proportion of the yarding. Grown heifers were in small numbers at 375 head. The majority of the yarding comprised of cows, which were mostly of dairy breeds in varying condition and quality.

Overall the quality followed the pattern of last week, and reducing at many markets. Young cattle were reported to be mostly of plain and unfinished quality. On the whole trade cattle also suffered from reductions in quality.

Demand for all cattle grades was weaker despite the reduced supply. While most buyers were present and operating the reduced quality incited selective or reluctant bidding. Once again several exporters were missing from the sales which had a price lowering effect on bullocks. Vealer steers fell by 8¢/kg while heifers struggled to remain firm. Yearling steers fell 5¢, while heifers faced 6¢/kg reductions. Bullocks dropped just under 2¢ and cows tumbled 4¢/kg.

Cheaper cattle
The medium C2 vealer steers sold firm at 198¢, while the heavy B2’s sold 14c higher to 226¢/kg. Heavy C3’s were up 9¢ to make 210¢/kg. Medium C2 vealer heifers were firm at 189¢, while the heavies reduced by 7¢ to 189¢/kg. The medium C2 yearling steers to restockers improved 2¢ to 186¢, while the heavy C3’s gained 1¢ to sell for 196¢/kg. The medium D3 yearling heifers slipped 3¢ to 164¢/kg. The heavy C3’s reduced 2¢ to 182¢, while the D3’s fell 10¢ to 160¢/kg.

The heavy C3 grown steers gained 2¢ to make 189¢, while the C4 bullocks sold 1¢ cheaper for 184¢/kg. Light D3 grown heifers sold 1c dearer at 154¢/kg. The Heavy C4’s also gained 1¢ and sold for 156¢, while the D4’s were 8¢ cheaper at 150¢/kg. Light D2 manufacturing steers slipped 18¢ to 127¢, while the heavy C4’s dropped 1¢ to average 162¢/kg. Medium D1 dairy cows sold for 11¢ or around 3¢ cheaper. The D3 beef cows reduced 2¢ to 127¢/kg. Heavy D1 dairy cows reduced 1¢ to 115¢, while D4 beef cows fell 4¢ to 133¢/kg. The medium C2 bulls gained 7¢ to make 151¢, while the heavy C2’s reduced 8¢ to also make 150¢/kg.

West Australia
Pastoral numbers of the rise
As has been too much of the case in recent years it would seem that the southern Agricultural district of WA will have to endure another false break, with most areas having gone two weeks without any further moisture. To further negate the good start and solid germination, most forecasts indicate that there will be possibly be no rainfall until at least the end of next week. This will see much of the germination die and will also have a negative affect on crops and cropping programmes.

Conditions in the north remain ideal for mustering and this is now in full swing. Agents continue to comment that it is their belief that there will be large numbers of cattle seen in the south in the short term, for sales direct to works and into physical markets.

Cattle numbers in saleyards this week saw a slight increase with all three weekly markets recording higher numbers at their particular sales. Once again Muchea’s yarding was well and truly dominated by cattle sourced from the pastoral north with only limited supplies of locally bred cattle seen at this market.

As has been the case recently the volumes of heavy weight steers were all but non-existent. Heavy weight heifer supplies were fair, while trade weight yearling supplies were also limited in volume. Young store grades on the other hand had plentiful supply, but agents have commented that the majority of these local stores have now been sold and supply should tighten. Cow numbers remained plentiful at all three markets.

Cow market falters end of week
Vealer numbers remained scarce and continued to be limited to calf weights. Local trade demand, coupled with a solid restocker interest from local and southwest areas continues to buoy prices with little or no change realised in values. There were tight supplies of grain assisted yearling available this week. Demand was again recorded from both the local trade and feeder sectors and consequently there was little or no change in overall values of either heifers or steers. This was also the situation in grass finished yearlings. The very good supplies of young local store were of an improved quality and overall weight this week predominately due to an increase in the yarding in the Great Southern. Demand was generally stronger throughout the classes from both the feeder and restocker sectors with most grades recording dearer price levels than the previous week, particularly in heifer classes.

There continued to be good numbers of prime heavy weight local and pastoral cows available in physical markets, despite an increase in the volumes of lightweight, plain conditioned categories. Trade demand started the week at firm to slightly stronger levels, but this demand weakened as the week progressed with prime heavy weight cows lower by 10c/kg.

[Mustang Sally Farm]

Tuesday, May 29, 2012
Dairy Investment Wanted, but Times Getting Harder?
CHINA - Chinese dairy product import levels were unexpectedly low for March 2012, reflecting modest levels of domestic demand.


These are figures to watch as private consumption needs to rise to reduce the need for investment spending. Doubters over the economy’s future are not hard to find, although most private sector forecasters remain positive.

The Asian Development Bank, for one, expects GDP to rise to 8.5 per cent in 2012 and consumption to grow by 12 per cent in 2012 and 2013, reflecting higher wages and rising government expenditure on social services. It believes the latter will encourage Chinese consumers to save less: going on price trends, they may well have to, reports Dairy Products China News.

The Chinese government is wanting international dairy companies to establish industrial-style farms to produce high quality fresh milk for its consumers weary of food scares centred on dairy products. Ironically perhaps – although in truth this signifies a structural adjustment in the sector which should surprise no-one – the corollary of this is that for many dairy farmers in China life is getting harder.

The recent reduced prices for milk being paid by Wondersun in Heilongjiang present a contrast to the April prices rises from Mead Johnson and Nestlé. Such price rises appear to have limited impact on sales, reflecting the specifics of the product category.

[Mustang Sally Farm]

Thursday, June 07, 2012
High Korean Cattle Slaughter Continues
SOUTH KOREA - Total Korean cattle slaughter during April increased 15% year-on-year, to 68,877 head, taking the national total for the first four months of 2012 to 314,854 head – 35 per cent above the corresponding period in 2011.

From January to April, Hanwoo (native Korean) cattle slaughter jumped 39 per cent year-on-year, to 268,251 head, with a 63 per cent year-on-year rise in female slaughter – the highest rate since the year 2000.

Previously, the Korean Government had announced an intention to reduce the cattle herd to around 2.6 million head by the end of 2013 to improve cattle prices, mainly through the provision of money to producers to cull less productive cows. Assisted by rising slaughter rates, Korean cattle numbers in the first quarter of 2012 declined for the third consecutive quarter, to 3.3 million head - but remained two per cent above the corresponding quarter in 2011.

From January to April this year, Korean beef imports decreased 12 per cent on 2011. During those months, imports of chilled and frozen Australian beef decreased 19 per cent and 10 per cent year-on-year, respectively. The decline in consumer demand for beef has had the biggest impact on beef imports this year, accentuated by higher domestic production levels.

[Mustang Sally Farm]

Friday, June 08, 2012
12 Months on - Industry Suffers from Live Export Ban
AUSTRALIA - The Western Australian Farmers Federation) (WAFarmers) has urged the community to recognise the devastating impact that the 2011 live export suspension had upon northern Australia, with this marking 12 months since the ban was put in place by the Federal Government.


WAFarmers Meat Section President Jeff Murray said suspending the live export trade was a blow from which many Northern producers may never fully recover.

“The annual income lost through this period will never be retrieved. The losses felt by producers and small businesses are irreversible,” Mr Murray said.

“The impacts of the live export suspension, were not just felt by cattle producers but cut off the life blood for mustering contractors, helicopter pilots and countless small businesses that are dependent on the trade.”

Mr Murray said during the suspension many of the cattle became unsuitable for the Indonesian market, forcing producers to find alternative markets.

“This led to a flow on impact in the Southern markets with anecdotal evidence demonstrating a lack of confidence amongst WA beef and sheep producers,” he said.

Mr Murray encouraged the general public to remember that farmers and pastoralists are committed to animal welfare and were devastated by the images of animal cruelty depicted in the Four Corners footage.

WAFarmers is fully supportive of the Exporter Supply Chain Assurance System (ESCAS) which now assures the welfare of Australian animals in export markets.

“There is no excuse for animal cruelty and WA farmers are committed to ensuring high animal welfare outcomes,” Mr Murray concluded.

WAFarmers has reiterated their strong commitment to supporting pastoralists and will continue working with pastoralists and Government to mitigate the damage and improve conditions where possible.

[Mustang Sally Farm]

Tuesday, June 12, 2012
Low-Lactose Dairy Calf Bred in China
CHINA - Scientists at a north China university say they have bred the world's first genetically-modified calf that will produce low-lactose milk in two years.


The calf, named "Lakes," was born on April 24 at a lab of Inner Mongolia Agricultural University. She is healthy and strong, lab professor Zhang Li said.

In May 2011, Professor Li and his research team extracted fetus fibroblasts from a Holstein cow that was 45 days pregnant and genetically engineered the fetus by transplanting an lactose dissolution enzyme into the cell.

The engineered fetus was then transplanted into the womb of a cow in July, and Lakes was born about nine months later, said Mr Li.

"The enzyme can dissolve lactose -- the main sugar found in dairy products -- into galactose or glucose to ease digestive disorders among the lactose-intolerant people," he said.

Lakes may therefore produce safer milk for lactose-intolerant people, who account for nearly 60 per cent of Chinese. Symptoms of the allergy range from rashes to diarrhea and other digestive disorders.

"Lakes, the calf, is a blessing for these people," said Mr Li. "She will produce low-lactose milk after she has delivered her first calf, hopefully at 25 months old."

The same test was done on 14 heads of dairy cattle last year and five calves were born in April.

Only three of them carried the lactose dissolution enzyme but Lakes was the only one that has survived, said Professor Zhou Huanmin, leader of the research team. "The other two died within 24 hours after birth."

[Mustang Sally Farm]

Vast Changes Made to Australian Live Exports 12 Months On
ANALYSIS - Twelve months on since the government brought the live export industry to a halt, Charlotte Johnston,editor looks at how things have changed and what impacts the suspension of live exports had on the Australian cattle industry.
 


Twelve months ago the Australian government imposed a live export ban on cattle to Indonesia.

In early 2011, undercover footage of Indonesian slaughter houses caused a public outcry. The government suspended live exports to Indonesia at the end of May 2011, and in early June suspended all live exports after pressure was applied from the public and animal welfare groups.

Although live cattle exports resumed to Indonesia in July 2011, the first shipment didn't leave until 11 August 2011.

Twelve months later things have drastically changed. There is a new operating environment under which cattle are exported, Indonesia has imposed quotas on imports in a bid to increase self-sufficiency and the Australian industry is still feeling the impacts of the live export suspension.

New Operating Rules
Following on from an independent review of Australia's Livestock Export Trade conducted by Mr Bill Farmer AO and recommendations from the Industry Government Working Group (IGWG) Reports, the government announced that Australia livestock exporters must establish an exporter supply chain assurance system (ESCAS) to ensure compliance with the requirements of the new regulatory framework for livestock exported for slaughter purposes.

There are two key independent audit report documents that a licensed exporter is required to submit to the department as part of the ESCAS requirements.

The independent initial audit report (IIAR) is an evaluation provided by an independent auditor of whether the exporter's ESCAS complies with the regulatory requirements. The IIAR must be submitted as part of the exporter's application to export livestock and is part of the information that is considered by the department when determining whether or not to grant approval to export.


The independent performance audit report (IPAR) is an evaluation provided by an independent auditor of the performance of the exporter's ESCAS after animals have entered the supply chain. The outcomes of the independent performance audits are considered by the department when making decisions on future applications to export livestock by the exporter.
Addressing non-compliance

Recently, an Australian government investigation into footage of animal cruelty in four Indonesia abattoirs concluded that two of the abattoirs were part of an approved ESCAS for two exporters. The two abattoirs were guilty of not fully complying with the ESCAS rules, although not on animal cruelty grounds.

The investigation recommended that regulatory action be taken against the two exporters.

Appropriate actions were taken immediately by both companies involved.

CEO of the Australian Livestock Exporters’ Council, Alison Penfold said: "The industry remains committed to ESCAS and the wellbeing of the animals as they pass through the supply chain. While any instances of non-compliance are regrettable, what this DAFF report highlights is how just quickly industry responds to isolate and fix problems when they arise in order deliver the required standards of animal welfare.”

She also said that the new export arrangements have helped transform the way Australian animals are managed through the export supply chain. Standards have been raised and the welfare processes and practices that sit behind the new regulatory system, ESCAS, continue to improve.

The industry's response to this report of breaches has been positive, with it being acknowledged that the new system is working and issues are being addressed.

In May 2012, the Australian government released the first independent performance audit report summaries for livestock exports to Indonesia. They will now be released on a monthly basis for the public to view.

Indonesia Restricting Imports
Last year, in a bid to increase their self-sufficiency, the Indonesian Ministry of Agriculture agreed to pull back on Australia's 2012 import permits from 500,000 head a year to just 280,000 head.

This restriction on quotas has forced Northern producers to look for alternative, and generally less profitable, domestic and export markets for their cattle, despite the Australian government assuring the industry that it is negotiating with Indonesia to lift its quota.

Rabobank general manager Food & Agribusiness Research and Advisory Luke Chandler says Indonesia's strongly-growing economy and increasing consumption of beef suggests self-sufficiency goals may be difficult to achieve and there is likely to be an ongoing need for live imports to complement the country's domestic production.

"This may provide an opportunity for live cattle quotas to recover over time and the northern Australian cattle industry is well positioned to capture additional demand and supply low-cost disease-free beef to the Indonesian market. There appears a mutual benefit in the trade in both countries," he says.

Meat and Livestock Australia predicts that live cattle exports will fall by 31 per cent to Indonesia in 2012, and be almost 500,000 head less than the record year in 2009.

At the moment there appears to be no clear alternative market for the surplus cattle.

Mr Chandler says the development of a northern Australian processing facility is one option that is being explored to diversify demand and complement the live trade by providing an alternative local domestic market for the northern pastoral zone.

A study carried out in Queensland looks at the viability of a northern outback Queensland meat processing facility. The report concluded that an abattoir would reduce live transport, minimise animal welfare and improve the outlook for regional graziers.

Impacts of Live Export Suspension
Western Australian Farmers Federation President Jeff Murray said that suspending the live export trade was a blow from which many Northern producers may never fully recover.

“The annual income lost through this period will never be retrieved. The losses felt by producers and small businesses are irreversible.”

Mr Chandler says the northern cattle industry has been dealing with a period of immense change and uncertainty since the suspension.

“The impacts of the live export suspension, were not just felt by cattle producers but cut off the life blood for mustering contractors, helicopter pilots and countless small businesses that are dependent on the trade,” concluded Mr Murray.


Charlotte Johnston, Editor