Australia's May beef exports pick up the pace, increasing to 79,995 tonnes

While the outlook at the beginning of May was shaping for a repeat of February's rainfall and flooding, it turned out to be a less intensive weather system, but nevertheless with sufficient effect in places to cause some disruption to kill schedules.

Getting cattle out of paddocks for saleyard store cattle sales, or for that matter getting purchased cattle home was just as problematic, and a number of sales had to be postponed.

With the ground soaking wet and shortening day length as winter approached, these were still issues in the latter part of the month with persistent changes coming through, bringing showers and some heavier rain in places.

But the bigger picture in southern, central and western parts of Queensland is one that should ensure properly fat cattle in the latter half of the year.

The only hitch to this prospective outcome is whether the cattle are there in any significant numbers.

A trip out to Blackall, Longreach and Winton at the end of May was a revelation.

Plenty of moisture plus daytime temperatures of 26 to 28 degrees meant the Mitchell grass was green and herbage was proliferating.

Certainly, now the expectation would be for cattle to be held for weight gain.

But there may still be a few cattle pushed back by the weather events to come through and as always a tendency for some to hold over until July for taxation reasons.

That makes for something of a mixed supply picture for slaughter cattle in June.

Historically slaughter numbers and beef export volumes drop off in June with only one year in the last 10 where export volume has risen.

This year with the fall of the calendar, June has the same number of regular working days as May.

On balance, therefore, June may struggle to match the May figure which would put Australia's half-year export result across all markets at less than 400,000t.

This is significant as the average first-half result across the last 10 years is 526,000t.

The May result itself is also significant as it represents an 18,200t or 30 per cent increase on the previous month and for the first time this year a significant increase on the same month last year.

Hopefully, this may be an indication that the supply situation is on the verge of a turn for the better in the second half.

The only guide from a seasonal perspective is 2012, which like 2022, was three years into a La Nina-induced herd rebuild.

In that year, slaughter and beef exports held fairly constant from June to September and then kicked in the final quarter.

Similarly, if this year manages to roll through the third quarter without the usual pinch point in August, there may be some hope for an improved run home in the final quarter.

Breaking down the May result, Japan was the big mover taking 25,606t, an increase of 12,000t on the previous month.

China took 13,599t and Korea 13,220t, both being almost identical to the same time last year.

The United States showed no change in buying pattern with their 10,992t volume only marginally different to previous months and the same time last year.

Driven by a need to reinforce strategic alliances as a consequence of Russia's invasion of Ukraine, the European Union is now looking to step up efforts to ratify concluded trade deals with Mexico and the South American trade bloc, Mercosur, as well as concluding and signing deals under negotiation with Chile, India, Indonesia, New Zealand and Australia.

The announcement was first attributed to EU officials by Uruguay's MercoPress in May and confirmed by Reuters last Friday citing EU trade commissioner Valdis Dombrovskis.

At the beginning of this year, France took over the six-month rotating presidency of the EU and wasted no time in halting the progression of the Mexico deal.

That deal was concluded in April 2020 and only had to progress through the ratification process to come into force.

But it seems French President Emmanuel Macron was concerned that 20,000t of beef imports in the deal were likely to spark farm protests and disturb presidential and legislative elections in April and June.

The more trade-oriented Czech Republic takes over the EU presidency in July and will likely facilitate the push from a strong bloc of member states who want to see progress on the trade deals.

The MercoPress article claims the European Commission (EU's executive arm) expects to conclude negotiations with Chile and New Zealand by the end of 2022 and the less advanced Australia deal possibly by 2023.

As mentioned above, the processing sector continues to face a broad range of challenges on the production side but it is now becoming apparent that the markets themselves are adding some additional pain.

One large, multi-site processor commented that there is currently a lot of grinding meat on the market in the US with the consequence that imported lean-meat product into the US is coming under pressure, particularly 85/90CL and even bull meat.

Steiner's latest quote reflects this development with indicator Aust/NZ 90CL now at US285 cents a pound FOB East Coast down from 300c/lb in May.

He added that there are also a lot of good grain-fed products making their way to Japan and Korea, particularly from the US, and this is really starting to impact prices.

This is unfortunate timing as currently there are a number of grain cattle that had to be held back from slaughter due to wet weather and shipping problems.

These are coming forward now, some with 180 days on them instead of the usual 120 days.

Grid rates meanwhile in southern Queensland remain unchanged with four-tooth ox quoted at 780 cents a kilogram and heavy cow at 715-720c/kg.