Prices bounce as cattle glut easesWednesday October 30, 2013 - 14:29 EDT
Cattle prices at the Mareeba saleyard don't usually make headlines, but this week's breakthrough of 180c a kilogram for bullocks destined for the export slaughter market has raised hopes the supply pendulum may finally have shifted in favour of producers.
In contrast to six months ago, when cattlemen waited months for kill dates and watched prices slide every week as cattle flooded the market, there are signs it is finally turning around.
The tiny Mareeba saleyard, just inland from Cairns, may only sell 400 or so head of cattle each week, but it's a useful barometer as it draws stock from the Atherton Tableland, Cape York Peninsula and the heart of the drought-stricken Gulf of Carpentaria.
It's been one of the toughest seasons, as a virtual "perfect storm" of drought, bushfire and loss of export markets combined to bring northern graziers to their knees.
But, as the cattle export industry meets in Townsville in the next few days to talk about the options opening up in live trade, agents like Mark Peters are already noticing a shift in the supply pendulum.
Mr Peters reports a "positive vibe" in the marketplace in the past six to eight weeks with steady increases in direct-to-works rates as the supply of cattle tapers off.
"We've actually turned that corner where now supply is a little bit less than the amount of space available to kill. That includes local processors and export processors," he said.
"The trend has been positive over the past six to eight weeks, and certainly more so in the past two weeks, where we've seen some substantial rises actually breaking through that 180 cents a kilo mark for the best bullocks on offer. So there is a positive vibe around the marketplace at the moment."
The upward pressure on prices has coincided also with the strengthening of live cattle selling options with plans for boats to depart Townsville, and further speculation cattle may soon be exported from the smaller port of Mourilyan for the first time since the temporary ban on cattle exports to Indonesia was lifted in 2011.
Mr Peters says the benefit of having another option in the marketplace cannot be underestimated, even on the coastal strip between Cairns and Townsville, which is not usually regarded as a bastion for the live export trade.
"It certainly puts a few more spokes back into the wheel," he said.
"Whether you're a speculator, whether you can take little tiny cattle up to 350 kilos or whether you take a slightly bigger animal up to over 400 kilos, then it gives you a few more options.
"I can recall when the last few boats went out of Mourilyan before there was any lowering of the top limit to below 350 kilos. There were quite a few people across the Tableland and also the coastal area that performed and acted in that market because it was a second option.
"They could keep the better heavier cattle and go off to the meatworks or to a saleyard and get pretty fair money.
"But they also had those mid-range cattle that, if they thought they weren't going to make heavy slaughter cattle, they had an option to go into that live trade job as well and that certainly hasn't happened since that imposition came into play."
But despite the positive bounce in prices, Mr Peters knows there's only one thing that will truly restore cattle market confidence for next season.
"Rain is going to be the major catalyst, I believe."
© ABC 2013
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