Little incentive to load up on live export

Port,Of,Fremantle,Western,Australia,With,Four,Ships,Moored,At

While the industry focussed on when and how the government plans to phase out live sheep exports, there was little improvement in the cattle live trade in February. Despite a small increase on the January numbers, year-to-date figures are down significantly, with about 33% fewer cattle sent offshore. It would seem the demand from our southeast Asian markets has been slow to build back up, regardless of Australia’s now lower domestic prices.

Live cattle exports to Indonesia did pick up somewhat in February, with close to an extra 4500 head sold there in February. However, the February total was still a whopping 62% below the five-year average for the month, which with more than 40% of the market share makes up for much of the total trade dip. According to Meat and Livestock Australia, this brings live cattle numbers sent to Indonesia in the past 12 months 16% lower year-on-year. As we’ve previously mentioned, the current challenges for lot feeders in Indonesia of disease and high-cost inputs are impacting trade, however, there are now also strong reports of falling demand due to the availability and lower cost of frozen imported beef and buffalo.

China was the other main market in February, receiving a shipment of live breeder cattle from Australia, putting the month 55% above the five-year-average numbers. Despite this, their year-to-date total is still down by more than half on 2021. China increased its market share by more than 10% last year, taking 23.7% of the market, and now sits at 24%. This has been made up entirely of breeder cattle in the past 12 months, and total numbers are up 20% year-on-year.

No cattle were sent to Vietnam in February, with the five-year average for the month being 13,123. Vietnam made up 33% of Australia’s live cattle trade in 2020, before falling to 23% in 2021, and making up less than 10% last year. This has risen to nearly 15% this year, however, with a large shipment in January, which increased their January/February total by 149% year-on-year. For the 12 months ending February, Vietnam’s import of Australian cattle was down more than 50%. Interestingly Vietnam is one of the only markets in that period to record imports of the three categories of Australian cattle, (breeder, feeder, and slaughter) and was by far the biggest market for Australian slaughter cattle, taking nearly 35,000 more than the next biggest market, Brunei.

The only other two markets operating in February were the Philippines, which took just shy of 1500 head of feeder cattle, and Malaysia, with 249 breeders sent there. This was significant for the Philippines, which hasn’t received any live cattle from Australia in the first two months of the year since 2020. Malaysia on the other hand receives on average about 2000 head for February

What does it mean?

Cattle supply out of northern Australia is set to improve post-Easter as per usual, however, a significant and ongoing wet season in many parts could see musters put off longer than the norm. Furthermore, lower live export prices won’t be doing much to encourage increased supply, Nutrien’s most recent report shows feeder steers out of Townsville at $3.80/kg and $4.20/kg out of Darwin. This could be a good thing if demand remains subdued.

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Key Points

  • Live cattle trade still has the “go-slows”, as February numbers fall more than 60% below the five-year average.
  • Indonesia remains the biggest market with a 41% share but has taken 43% fewer cattle for the year-to-date compared to 2022.
  • More than 120,000 head of breeder cattle have been sent to China in the past 12 months, a 20% increase year-on-year.

Click on figure to expand

Click on figure to expand

Data sources: MLA, Mecardo

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