THE extraordinary rain and flooding events in south east Queensland in the last week of February continued to impact beef processing, production and exports into the first weeks of March.
Road and rail cuts meant that product could not be cleared from plants to Port of Brisbane and the port itself had to close because of silting and sunken objects that posed a threat to shipping.
However by the second weekend of March the port managed to load out a substantial number of containers and processors, while not back to optimal levels, were moving cattle and product through the system.
Cattle enticed out by the extremely good rates offered in February had started to back up during the rain event and meant that Qld processors were reasonably placed for kill stock for the remainder of the month. Accordingly rates started to come off.
By the end of the month the supply picture was looking much better particularly for plants in the north and south east of the state and other issues such as continuing COVID absenteeism, increasing freight costs and shipping delays and a rising Australian dollar were taking centre stage.
Against that background March beef exports stepped up to 74,384 tonnes, a significant improvement on February's 59,000t.
But while heading in the right direction, the result was still 9000t or 11 per cent down on March last year and by far the lowest March tonnage in at least the past 10 years.
Nevertheless it has brought export activity back up to the volumes seen in the latter part of 2021 and to that extent all major markets saw some gains.
Lead market Japan saw 20,083t shipped in March, up from 16,000t in February and representing a massive 27pc share of the overall March total. Part of the reason for this surge was undoubtedly associated with timing the product to clear through Japan Customs post April 1 to gain advantage from the next of the phased tariff reductions under CPTPP.
China was next at 13,483t up from 11,500t in February and near enough to as good as has been seen since the political relationship soured in mid-2020 and arbitrary suspensions were applied.
Korea followed at 13,187t and the United States reached five figures for the first time this year at 11,142t.
It is interesting to note that one major multi-site processor is of the view that many of the cattle processed in March and early April have been pulled forward with rate so their expectation is that there could well be a pinch point some time ahead.
That may not show up in April due to there being only 18 working days and reports that supply through Easter and in some instances out to the end of the month is covered.
However it does pose the question of just how strong the usually well supplied months of May and June will be.
It may be that beef exports in the first half of 2022 will come in at or a bit under the 2021 first half result of 422,000t which would require a very strong performance in the second half if MLA's prediction of 1,060,000t for the year is to be reached.
Second half 2021 yielded 465,000t of beef exports but that would need to rise to around 640,000t or more for the 2022 forecast to be achieved.
In that regard there are some contradictory dynamics in play.
Firstly there are large areas that received a good start with October /November rain followed up with good summer falls.
In these favoured areas herd rebuilding will no doubt continue and female turnoff to the works can be expected to be minimal.
However parts of the north and north west of the state that got the early start missed out on summer rain and what grass grew fell prey to heat and grasshoppers.
Logically some degree of lightening off will follow and young cattle would likely be first in line due to prevailing prices but inevitably there will be females to go to the works from these affected areas.
But whether COVID will allow works the labour to step up shift numbers to accommodate any rise in turnoff remains to be seen.
In that regard the latest developments in China are not encouraging and there are increasing numbers of people here who are reporting re-infection only a matter of weeks after recovering from an initial encounter with the virus.
The availability of male grass-fed cattle is another matter.
High prices have seen this class of cattle turned off as heavy feeders and the logic of economics would suggest a big increase in heavy steer numbers precipitating a significant fall in feeder rates is needed before any numbers are once again held over to finish on grass.
Rates have come back to some extent in Qld but not in the south.
That would seem to limit expectations for killable grass steers and bullocks in the second half of this year.
SHORT weeks, labour shortages and a flow of cattle that is more than a match for current diminished capacity means meatworks now have cover out to early May.
One of the majors has stopped quoting while another has taken a further 20c/kg off, bringing 4-tooth ox to 775c and heavy cow to 705. That is a 60-70c drop since rates peaked in late February.
Overseas, Steiner's latest update suggests Brazilian beef will continue to enter the US in quantity despite an out-of-quota tariff rate of 26.4pc being applied.
This is because of concern that COVID restrictions in China have impacted demand there with imported beef backing up in warehouses and on ships waiting to be unloaded.
This in combination with US domestic and imported supply so far this year described as front loaded has unsettled the market with buyers not in a rush to cover summer needs.
Indicator Aust/NZ 90CL remains unchanged at US305c/lb FOB East Coast.
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