Northern and southern markets align

Northern and southern markets align

Sales
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Early sales this week continued the trend for northern and southern rates to move into closer alignment.

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WITH no real prospect yet of even storm rain across the drought affected areas of New South Wales and Queensland, decimation of the breeding herd continues with females dominating the kill.

Early sales this week continued the trend of the past couple of weeks for northern and southern rates to move into closer alignment.

At Wagga on Monday there were more than 900 cows in a total yarding of 3400 head which saw medium and heavyweights drop a further 9-10c/kg.

On a DW basis that brings the heavyweights to 460-470c and 440c for the lighter types.

By comparison, Dalby last week saw a 5-8c upward adjustment despite a large yarding of more than 1300 cows.

The big sample of score 4 heavyweights returned a 240c/kg LW average, a DW equivalent of around 470c.

On the beef export scene, September looks set to bring in a similar result to August of around 106-107,000 tonnes despite one working-day fewer in the month.

Progressive figures published by Department of Agriculture to the third week of September suggest no change in tonnage to the United States but possibly a slight increase to both Japan and Korea.

China, on the other hand, may be down 2000t on August which may indicate that the 6 per cent tariff increase due to triggering safeguard may be starting to bite.

If it is the case that Australia finds it a little harder to place product in China relative to our competitors in the final quarter, it brings focus back on to alternative markets.

MLA's contract analyst in the US, Steiner Consulting, has for many months pointed out the extent to which China has bought Australian and New Zealand product away from the US.

In last week's report Steiner noted that seasonal demand for ground beef declines at this time of year while domestic cow slaughter normally trends higher.

This explains why lean beef prices in the US usually fall in the northern autumn.

While US cow slaughter was down in August, it has now turned with last week's figures the highest since March.

With an expectation now that the price for lean in the US will fall in the months ahead, it questions what effect that might mean for Australia on overall price dynamic if export product falls away from China to the US.

Steiner did add that supply out of NZ (a major competitor in the US market) is not expected to pick up from its seasonal hiatus until November/December and even then China will almost certainly continue to buy a large proportion of whatever amount they have to offer.

The simple reason being that NZ got in early with its China free trade agreement.

Their deal saw beef tariffs drop to zero by 2016 and no safeguard measures so it has clear advantage.

This will help keep NZ product out of the US supply pool in the months ahead and that might just work to Australia's advantage if it needs to push more towards the US.

PRICEY: This locally produced Jersey rib-eye at Copenhagen market was priced at 425 krone/kg (AU$94/kg).

PRICEY: This locally produced Jersey rib-eye at Copenhagen market was priced at 425 krone/kg (AU$94/kg).

Postcard from Copenhagen

DENMARK, a country made up of 400 plus islands, is gateway to Scandinavia and the Baltic states and of course home to Tasmanian-born Princess Mary and some 5.8 million other inhabitants.

It is often held up as the model of social development in the western world with its generous university education, health care and welfare-state programs as well as relatively high income levels.

The flip side is very high personal income tax rates and a GST rate of 25pc which combine to drag disposable income levels down into the lowest rankings in the EU.

Despite this it is always up in the top rankings of world happiness and the people I spoke to when there recently tended to agree that salary/wage levels were reasonable and that they got value for money in the way their taxes were spent.

Perhaps part of that happiness comes from the fact that as of last month, one Danish bank now charges the borrower interest of minus 0.5pc on a 10-year home loan.

That's right, take out a home loan in Denmark and the bank will pay you interest rather than the other way around.

It is all to do with the bizarre new world of negative yield on global bonds and central banks cutting interest rates below zero.

Back to daily life and with the cost of living so high (as evidenced in the corner stores, bars, restaurants and entertainment venues we visited), it was hard to see how locals could afford to do much more than ride their bicycles to the market in search of reasonably priced meat, fruit and vegetables for their daily needs.

Not that the butchers' stalls in the popular Torvehallerne market offered much respite.

A locally produced piece of rib-eye was priced at 425 krone/kg (AU$94/kg).

The interesting thing about this attractive cut of beef was that it came from a Jersey animal.

The butcher was quite emphatic about the quality of Jersey beef preferring it to the US grain-fed Black Angus rib-eye sitting next to it in the display priced at 550kr/kg (AU$121/kg), some ordinary Argentinian rib-eye at 520kr/kg and some unappealing Brazilian rib-eye at 420kr/kg.

Otherwise you could get a bargain at the Ali Baba butcher shop at 10 Halmtorvet near the main train station.

This appeared to be a halal shop offering a range of beef and lamb product.

Cote de boeuf and t-bone described as dry-aged were priced at 170kr/kg (AU$37/kg), round and thin flank were 70-75kr while 95-lean beef mince was 70kr and 90-lean just 50kr (AU$11/kg).

The meat looked reasonable quality despite the size and appearance of cuts suggesting they came from mature animals so other than this it was hard to reconcile the very considerable price differences at the market.

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