WITH first round musters boosting supply and pushing slaughter to capacity, May is usually the biggest production and export month in the first half of the year.
However, Department of Agriculture figures just released show 91,479 tonnes (shipped weight) for May, well behind the 99,000t volume achieved in March.
In this instance March is a more relevant month for comparison purposes due to the high number of national public holidays and lost production in April.
Monday, May 1 was the only public holiday in the month and it was limited to Queensland. MLA figures indicate 53,000 head were slaughtered in Qld that shortened week compared to 63,000 head in the weeks that followed.
That pushed the national weekly kill in mid-May to a high point for the year of 120,000 head, well above March levels, so it was not unreasonable to expect May exports to push past the 100,000t mark despite the single lost day of production in Qld.
The fact that it didn't begs an explanation.
End-of-month rollover of the count might explain some of the difference as the DAFF figures for day one in June look a little on the high side at 5518t.
Also it is likely that average carcase weight has dropped in consequence of the higher number of females coming through.
In March, prior to first-round musters properly getting under way, the female kill in Qld was consistently around 19,000 head per week. Male cattle numbers were consistent at around 40-42,000 head which put the Qld kill overall at around 60,000 head per week.
However by early May, female slaughter cattle supply in Qld had surged as evidenced by the 24,000 head recorded in the second week of that month.
With capacity restrained by labour issues, that must have provided livestock managers with a task akin to trying to squeeze five kilos of spuds into a four-kilo bag.
But through a combination of fewer male cattle that week and finding a little extra capacity, the female numbers were accommodated with the end result being a climb to over 63,000 in total for the week, as mentioned earlier.
Meanwhile kills in New South Wales and Victoria continued virtually unchanged. Equal numbers of males and females make up NSW's 30-31,000 head per week while Victoria continues to roll along at around 14-15,000 head per week with females outnumbering males 2:1.
One obvious issue with this current run of females in Qld and the inelastic nature of capacity is that the pipeline is filling quickly, pushing kill slots well out into the future. The latest indication is that space bookings in some instances are heading toward two months forward compared to the situation not long ago when works were struggling to get two weeks of cover.
Looking across the May export destinations, some appear to be holding or building volume while others appear less so.
Korea stands out for what appears to be uncharacteristic variation in month-to-month volume this year.
Over the past five years annual volume to this market has been stable at 160-170,000t relatively evenly spread throughout the year.
Then in March this year volume spiked to 20,000t from 13,000t in both the previous month and the previous year. April saw a correction back to 13,500t and May recorded a more familiar volume of 15,648t.
Volume for the five months to date is showing a 28 per cent gain on last year but as this is due in large part to the irregular March spike, this figure can be expected to wash off rapidly as the year progresses.
Japan, on the other hand, saw its May volume of 19,366t substantially down on last year's 25,000t. This had the effect of turning modest growth of 6pc over the first four months into negative 3pc just one month later.
Volume into Japan has slipped every year since 2018 and it is by no means certain that the trend can be turned around this year. That would put Japan at risk of losing its number one spot by yearly volume to China.
On a single-month basis, China has already become Australia's largest market by volume in both April and May.
Its May volume of 19,569t is the largest monthly intake of Australian beef since May 2020 and continues the trend of each month this year being up on its counterpart last year.
For the five months to date, China is up by 34pc on last year. Continuation of monthly volumes at current level will take China well beyond 200,000t for the full year.
In the United States market May volume of 17,957t was up substantially on last year's 11,000t. Year-to-date Australian beef exports to the US are up by 43pc on 2022 but from a comparison perspective, last year was the lowest volume shipped to the US in a very long time.
Concerningly, the outlook for imported trim has now turned in the opposite direction to what processors here expected with 90CL dropping from US272c/lb in early April to US253c/lb last week.
Speculation on depth of current supply run
WITH bookings now well out into the latter part of July, it remains to be seen whether the current supply run is deep enough to flow through August/September, the traditional hard months, or whether it will break down into a series of bumps and hollows.
Processors report a number of pertinent factors including cattle carried over from June for tax reasons, a re-appearance of grass bullocks from Central Qld, across the border and from the Channels.
Then there are the northern cattle which will start coming through late June/July, a couple of months later than normal as well as an unknown number across supply areas in good grass paddocks under no pressure to be sold.
Uncertain of how it may play out, processors are proactively pricing rather than just taking space bookings.
Indicative rates from the majors put YP ox at 540-550c/kg and heavy cow at 450-460c.