New feeder steer indicator

Previously MLA's market reporting service chose yearling steers purchased as feeders in saleyard markets in the 330-400kg weight range, fat score 2 and muscle score C as the feeder indicator.

In explaining why these parameters were considered to be no longer suited to task, MLA said: "The feeder market is a growing segment of the Australian cattle supply chain, with the feeder steer indicator used by a range of stakeholders to inform and guide important business decisions. As such, a more robust, relevant and accurate indicator is required to ensure the long-term success of the industry by enabling more informed business decisions."

It went on to say that the change would precede a broader review of all MLA's existing indicators, as well as the development of new ones to better support an ever-changing industry.

This last point is a welcome change on MLA's part as there has been massive structural change in livestock marketing since the livestock market reporting service (LMRS) was first developed in the late 1970s.

For around 20 years LMRS was delivered by the states under coordination by Standing Committee on Agriculture.

One by one the state organisations (usually statutory meat authorities or departments of agriculture) were forced to drop their market reporting activities. The reasons included lack of funding and organisational restructure which excluded livestock marketing activity as a core function.

In the end it was the NSW Meat Industry Authority which attempted to pull the various state LMRS activities together in the late 1990s as a national market reporting service.

However this initiative ultimately suffered the same fate when that authority was dissolved in August 2000 and its functions transferred to Safe Food Production NSW.

At that point there was no alternative other than for MLA to pick up market reporting as one of its responsibilities.

In the 20 or so years that it has delivered livestock market reporting, MLA has embraced technology which enabled enhanced analysis and better accessibility of information but essentially the reports themselves are little different in format to what was adopted 40 years ago.

The point here is that 40 years ago saleyards were mostly concerned with selling slaughter cattle and the LMRS language was specifically designed with that in mind as well as being drawn from and consistent with the evolving AUS-MEAT national meat language.

Through the 1980s and 1990s, there was a massive transition of slaughter stock out of saleyards in favour of direct-to-meatworks.

The terminal markets of Cannon Hill, Homebush, and Newmarket closed and regional markets since have been dominated by store cattle.

Market reporting should have evolved to accommodate this shift but instead, market reporters have been left with the task of trying to explain to restockers, backgrounders, feeders and fatteners the reasons for store cattle price difference in a language that is inadequate and in some respects irrelevant.

The consequence of this is reports that frequently contain no explanation for wide variation in price within individual livestock categories.

Unfortunately industry let itself down on the subject of overseeing and maintaining a functional livestock language.

AUS-MEAT abandoned stewardship of the livestock component of the national meat language in 1998.

No one seemed too concerned for the next 16 years until the Australian Beef Language White Paper, commissioned in 2014, recommended in 2016 that an expert group conduct a review of the livestock language.

Fifteen months later in April 2017, the peak councils who had commissioned the White Paper in the first place agreed to the need for a review and put the onus on MLA to carry it out.

Three more years passed before MLA announced in May 2020 that a Livestock Language Review Expert Group had been formed and that the group was getting on with the task.

Due to COVID, industry consultation meetings were conducted virtually during 2020 and as recently as last November, feedback was being collated in order to prepare a clear set of recommendations.

While those recommendations are yet to emerge, it may be that MLA has elected to move on regardless with what it considers to be appropriate changes.

In the case of the revised feeder steer indicator the change in definition is quite bold.

Age/category, weight, fat and muscle score have all been dumped.

As far as the indicator is concerned, any steer bought as a feeder goes into the calculation.

MLA claims this will provide a more accurate assessment of the feeder market.

In addition, it also appears that the price basis is changing.

The previous feeder steer indicator is shown on MLA's specification sheet in c/kg carcase weight while the revised indicator appears to be in c/kg liveweight.

All of this suggests some important changes ahead for the long overdue revision of the Eastern Young Cattle Indicator (EYCI).

Application of similar logic would see the 200kg weight range threshold, fat and muscle scores removed and the price reported in c/kg liveweight.

That would address the longstanding shortcomings of AuctionsPlus and weaner sale cattle being excluded from the EYCI and bring all saleyard/market-based indicators onto a common price basis.

RECENT short weeks due to public holidays have probably masked the increasing tightness in supply meaning processors have generally been able to maintain shifts but that is now in question with a clear calendar of full working weeks and the prospect of lost time again a reality.

In response, processors up and down the east coast have tweaked grid rates with increases of 10-50c/kg on ox and 10-30c on cow.

In south east Queensland the majors are on matching rates of 680/600 for 4-tooth ox and heavy cow with their central and northern works generally 10-20c behind.

Naracoorte remains on 695/640 after its 40c hike three weeks ago but Wagga was the big mover last week with an extra 50c on ox and 30 on cow. That took them to 695/620.