Meat news worldwide

From droughts to flooding rains

2010-12-06T16:44:00.000+11:00

After one of the wettest springs for many years, three Australian east coast states are faced with major flooding.

NSW and Queensland have the most to be concerned with. There are 12 rivers and systems in Qld with flood warnings out and 18 rivers and systems in NSW. Major centres such as Wagga have had flooding and evacuations and the grain crop in many regions has been ruined or degraded.
Our thoughts go out to farmers in the affected regions, many of which are already declared natural disaster areas.

Seasonal conditions vastly improve in NSW

2010-09-17T11:43:00.000+10:00

Seasonal conditions have vastly improved in NSW. Drought links here.
The latest map shows only 4% in drought compared to 81% in January 2010.

Meat processing in Australia

2010-04-20T15:24:00.002+10:00

We are developing an extensive profile of meat processing in Australia and internationally. Part of this exercise is the location of plants on a map.
Here is the Queensland map.

View Queensland meat plants in a larger map

ABARE Outlook forecasts further erosions of farming returns

2010-03-03T09:45:00.000+11:00

ABARE painted a dismal picture of Australian broadacre farms returns in a paper delivered to Outlook 2010. The maps shown indicate in red even larger areas of incomes below $50,000. Bear in mind this is income and net returns are bleak indeed.

Farm indebtedness continues to grow and average broadacre farms are showing losses of $18,000.

Interest rates are on the rise again in Australia and small business pays risk margins far higher than normal rates. It is not unusual to see rates 6-8% over the current cash rate of 4%. The monetary policy settings with one lever for the whole of the economy is a nonsense. Mining booms continue but rural Australia is in a very poor position and debts will continue to be hard to service with paltry average returns.

Meanwhile, bureaucrats and industry organisation heavyweights receive hundreds of thousand dollar salaries and make learned pronouncements and policies which are increasingly unsustainable to agriculture. Returns and prices are falling but levies continue their upward climb with very mixed success.

Forecasting and weather models

2010-01-09T09:53:00.003+11:00

Twelve months ago we commented on the inexact science of weather forecast models. It appears the Queensland and NSW models were a fair way out again so far this summer.

BOM models indicated a drier summer for Qld but it seems the reverse has happened. Most of the major inland river systems are in various stages of flood which started around Christmas time.
The predicions are here.

The reality is here.

Livestock exports

2009-12-11T11:14:00.007+11:00

With animal welfare becoming more of an issue worldwide and sustainable food production, I believe it is high time we opened the live export of cattle and sheep to serious debate. I am not sure the structure of industry organisations is permitting such debate.
GRAPHIC SOURCE: MLA LIVELINK

Recent exports of sheep by month is shown in the graphic.

It seems export of cattle to Asia will continue to increase and one wonders if the same scrutiny of animal welfare in Australia is applied to the myriad of facilities used overseas to slaughter cattle.

I remain to be convinced that it is more than an opportunistic trade. Growing middle classes and awareness of food safety may prompt faster growth of higher standard butcher shops and supermarkets compared to the illogical idea of needing to visit wet markets every day. Incomes are rising rapidly and we do not need to be stuck in the 1850s in the developing economies, where corner slaughterhouses and open markets existed all over the world. Comments welcome.

Steak budget

2009-11-12T13:01:00.004+11:00

Discussions and lobbying continues on the meat labelling and grading debate.

A relatively new regional player, Foodworks, who has acquired smaller Coles and BiLo stores, has the products priced per the image.

A visit to one of their stores showed budget rump steak at $6.99 per kg and budget boneless sirloin steak at $14.99 per kg. The product was branded Primo and the steak appeared to have the classic yellow fat associated with cow beef.

Interestingly the local butcher has rump steak priced at $23.75 per kg and sirloin steak at $27.95 per kg.

To read the Senate commitee report click the link.

to read Hunt Partners blog, visit here.

to read Richard Torbay MP NSW bill, visit here.

It appears some sectors of industry favour the status quo while activists look to establish a grading system and far greater scrutiny of meat labelling.

AUS-MEAT definition of "budget" is shown here. Information has been circulated by the press in relation to the range of qualities and products produced by plants in this category.

Let the buyer beware is probably still the way to go.

Trends in trade cattle prices

2009-11-05T15:13:00.002+11:00

The following chart prepared by the writer from MLA published figures and ABS published CPI indexes indicates trends over time. While the average annual trade steer price in 2008-2009 was $3.34 per kg carcase weight equivalent, recent weeks have shown a downturn to quite low levels of $3.10 per kg carcase weight (National Saleyard Indicator MLA).

One can argue how sustainable beef production is at these low levels with even greater pressure on returns due to the stronger Aussie dollar.

Corporate beef producers are also showing poor returns and they should have much greater comparative advantage than smaller southern producers. Comments welcome

El Nino conditions possible in Australia?

2009-08-29T14:20:00.003+10:00

The Australian Bureau of Meterology (BOM)is reporting some disturbing indications of future rainfall in southern and northern Australia in the coming season.

Read the report here.

Southern Western Australia is looking better but south east Australia will find it very tough to endure yet more rainfall deficits. Lets hope the indications prove wrong as it appears the indexes are still inconclusive.

Value of livestock production - producers share?

2009-07-30T14:51:00.005+10:00

ABS has released their annual value of production figures for 2007-2008. Value of cattle and calves slaughterings has fallen from almost $8 billion to $7.35 billion Australian. A fall of 8% or $634 million.
Sheep and lamb slaughtering values are up to $2.167 billion, up 5% with higher prices.

It is interesting to note that retail meat prices continue to increase with rump steak selling at an average price of $19.83 per kg in Sydney in June 2009 compared with $18.40 per kg in June 2008, a rise of 7.7%. (also released by ABS today).

The unit value of cattle and calves slaughtered dropped to $779 per head in 2007-2008, down $36 per head from the previous year. It is hard to see how that leads to any great enthusiasm to expand herds. Even corporates had a poor year in the beef industry.

Southern Australian beef producers - sustainability?

2009-06-20T13:41:00.002+10:00

The recent ABARE report - Australian Beef 09.1 has some interesting data on Southern Australian beef producers. The report shows that farm business profit has been negative for the last 3 years, except for the largest producers in 2008-2009.
Rate of return excluding capital appreciation is minimal and negative in most cases.

The disturbing trend is that farm cash income is less than the Australian average wage cost and generally less than $50,000 per annum. One cannot get too excited about producing beef for these negative returns and minor incomes. Given drought conditions that have dragged on in the Southern states, it is a sobering assessment.

Russian meat import approvals

2009-05-12T10:11:00.003+10:00

The latest list of Russian approved Australian meat plants is located here.
It appears that a total of 94 establishments are approved but a staggering 18 plants have temporary restrictions. Those restrictions date back to around June 2008.

Industry organisation advice back in January 2009 indicated that "the situation is fluid." Fluid implies movement, frozen appears more appropriate.

WHO Inflenza A(H1N1) and Market Access

2009-05-06T13:53:00.004+10:00

It is apparent that certain media coverage and misinformed authorities have sought to use the excuse of Influenza A(H1N1) to ban pork imports. The usual suspects can be relied on to seize any opportunity to deny market access and use non tariff barriers to keep out imports without any scientific basis. Please find link from well coordinated WHO efforts below:

click

Also a map of confirmed cases by country. SOURCE: WHO

We are still awaiting clarification and action on markets including China and Russia with respect to plant listing approvals, reinstatement of listings and a range of access issues for beef and sheepmeat. It is wise not to expect rapid action, unless it is to delist a plant for questionable reasons and without notice. Government negotiations are continuing behind the scenes (at least we hope so).

Australian livestock farm incomes and profit - unsustainable

2009-04-02T15:27:00.004+11:00

It is difficult to see how beef and sheep producers have any significant incentive to rebuild herds and flocks. The ABARE report - Australian Commodities March quarter 09.1, painted a rather poor picture of the state of the nation for long suffering producers.

Small beef producers with less than 300 head of cattle fared the worst with 2 years of negative cash income and -$18,000 in 2008-2009. Larger producers with over 300 head showed a modest income of $110,000 in 08-09. Sheep producers struggled on only $46,000 in 08-09. Farm business profit for larger beef producers came in at $43,000 in 08-09 but smaller producers had losses of $69,000. Sheep producers had losses of $27,000 in 08-09. Rates of return are negligible with sheep 0% and large beef 1.4% excluding capital appreciation in 08-09.
The figures are obtained via surveys and you can read the full report here.

We do not see these factors reflected in industry projections and no wonder it is not a front page story on many industry organisation publications. The incomes and profits are simply unsustainable.

Australia-NZ ASEAN Free Trade Agreement

2009-02-28T12:51:00.002+11:00

February 27, signing in Thailand.

The AANZFTA parties comprise of the ten ASEAN members (Burma, Brunei
Darussalam, Cambodia, Indonesia, Laos, Malaysia, The Philippines, Singapore, Thailand
and Vietnam) together with Australia and New Zealand.

DFAT website link

AANZFTA is the largest FTA Australia has concluded. ASEAN and New Zealand together account for 21% of Australia's total trade in goods and services, which were worth $103 billion in 2007-08. ASEAN, as a group, is a larger trading partner for Australia than any single country, accounting for 17 per cent ($81 billion) of Australia's goods and services trade in 2007-08.

AANZFTA contains regional rules of origin and substantial tariff reduction and elimination commitments, as well as World Trade Organization (WTO)-plus commitments in other areas such as services, which will provide commercially meaningful benefits to Australian business and further strengthen Australia's commercial ties with ASEAN. It is expected that AANZFTA will enter into force in the second half of 2009 and, in any event, no later than 1 January 2010.(Source: DFAT)

Where to for the sheep and lamb industries

2009-02-18T11:19:00.007+11:00

We have seen snippets of industry projections published on websites. Why is it that the full reports are not published? The short sighted attitude of selling market reports continues with no suggestion it does anything other than deny useful market intelligence to the wider industry. The same people are running the shop and it has not occurred to them to think of the overall industry benefits of widely published market intelligence. Compare this to USA and the number of published reports available.

The sheep flock in total has collapsed to 79 million head at June 2008, the lowest level since 1908.

the very useful ABARE commodity report describes the historical dominance of the NSW, Victorian and Western Australian industries.

The NSW sheep flock has dropped from over 43 million head in 2000 to around 29 million in 2007 - a massive contraction due a combination of ongoing drought conditions, lower wool prices and poor grower returns and indebtedness.

I am not convinced that projections take account of demand and economic conditions. They also fail to look closely at the economic prosperity of producers and the poor returns they enjoy for all the tough seasons they endure.
High quality ABARE report notes:
Farm cash incomes are estimated to fall by over 50 per cent in the slaughter lamb industry in 2006-07, as extensive drought conditions have reduced flock and crop productivity.

Australia January - wet north, hot dry south

2009-02-06T08:34:00.002+11:00

The picture shown indicates the sharp contrast in seasons in the Australian mid summer month. Northern Australia has received record rains and severe flooding in parts while southern Australia has received excessive hot and dry conditions.
After mopping up and recovering from the best monsoon rains for 30 plus years, northern cattle producers will be assured of good pasture growth for some months and confidence will improve.
Southern producers can hope for a milder wet autumn-winter.

Maccas - quick service, strong results

2009-01-27T08:47:00.003+11:00

McDonalds unveiled their strong results for 2008 today. It beggars belief that 58 million people eat at McDonalds restaurants globally on a daily basis.
Asia-Pacific, Middle East featured strongly in results with sales up 9% and returns up a staggering 33%.
Proactive management and great work by worldwide franchisees keeps this impressive record ticking along.

Rumour mill whirring

2009-01-23T15:19:00.004+11:00

Everytime a meat plant shuts down the rumour mill goes into overdrive saying JBS Swift are interested in buying the company.

All groups keep records and prepare ongoing analysis of competitors and review purchasing potential. However, journos need to keep in mind the level of unsustainable debt carried by some operators. Markets are depressed at present and it would seem a waiting game might be a better play. Watch this space.

MLA Lamb Campaign 2009- return of slamming Sam

2009-01-08T16:45:00.010+11:00

MLA have rolled out the heavy artillery to combat "unAustralianism" and "over-paid fat-cat bankers" with their 2009 Australia Day lamb campaign.

Watch the video.

Weather and climate science

2009-01-08T09:59:00.003+11:00

The seasonal forecast for north and western Queensland has ended up being way off the mark. The BOM forecast of Dec. 17, 2008 showed below average Jan-March season.

The reality is that some unprecedented rain has occurred and 5 major north western river systems have major flooding with stock losses, transport disruption and isolated towns. It augers well for cattle producers in the region once the flood waters clear.

Quite a few graziers would be happy that weather and climate predictions remain an inexact science.

Best monsoon rains in 30 years

Australian Sheep NLIS tagging

2009-01-05T12:24:00.005+11:00

Under new rules announced today and, in operation from January 1 2009, all sheep must be tagged before leaving their property of birth.

The MLA and AMIC announcement also advised as follows:

NLIS (Sheep & Goats) was introduced on 1 January 2006 with the requirement to apply a visual tag with a PIC, complemented by movement documentation before leaving the property of birth.

The relevant document from the MLA website is here.

We have noticed that some Kiwi farmers are upset as Silver Fern, the largest meat processor in the South Island of New Zealand indicated it may put Australia in a better position competitively in relation to traceability of food.

Updated drought information Australia

2008-12-14T17:17:00.005+11:00

Drought continues in many areas of Australia. Recent rains have helped wide areas and also caused considerable grain harvest damage.

Some links to view include:

Bureau of Meteorology

DAFF site

Qld Drought report

NSW report

Vic reports
SA reports

Commodities collapse July - November 2008

2008-12-10T13:33:00.003+11:00

It is odd that the bulk of commodities have collapsed almost in unison.
Crude oil peaked in July around $140 per barrel and is now around $42 on NYMEX.
Gold was around $1000 per oz. in July and is now $774 on COMEX.
Corn was around 800 cents per bushel in July and has crashed to 327 cents on CBOT.
US Live Cattle were quoted around 115 cents per lb in July and are now trading at 82 cents for Feb 2009 on CME.

Such a concurrent collapse would appear to be unprecedented. The financial turmoil and credit crunch has left all markets and traders reeling.

Hides market downturn

2008-12-06T11:58:00.006+11:00

Hide prices have collapsed very quickly. Levels this past week are extremely low and some categories have very limited, if any, demand.

Going back to 1996 in our coproducts records, values were still far higher than current prices.

We have noted a severe contraction in retail demand for leather as well as a sharp downturn in luxury and standard motor vehicle and leather seat demand.

In furniture, Australian retailers such as Nick Scali and others have reported poor sales.

Follow the links for Wikipedia entries on leather and tanning.

Retailers in the UK including Tesco, Land of Leather and others are suffering.

European fashion and luxury goods houses like Prada, Hermes, Santoni will feel the pinch.

Food standards for sausages, other products

2008-12-03T16:45:00.004+11:00

I had the misfortune to try a number of canned meat items a couple of months back. The family thought it was time to explore the range of offerings.
All in all the meat content was practically invisible and they were just filler, filler and filler.

There is a standard for sausages and manufactured meat. The minimum is 50% fat free meat flesh.

A meat pie is required to have 250g/kg meat based on total weight of pie including pastry.

Passing of Dick Stone, a pioneer of lot feeding in Australia

2008-12-02T15:58:00.003+11:00

I was saddened to learn of the passing of Mr Dick Stone fairly recently.
Mr Stone started a chain of butchers shops in the St George area of Sydney, including a shop at Hurstville.
He was an early entrant into lot feeding with his feedlot at Canowindra in NSW. He marketed the beef under the brand of Oakleigh barley fed beef.
A gentleman with a love of the meat industry and had the pleasure to meet him many years back.

Food safety and E.coli

2008-11-27T15:57:00.003+11:00

We seem to hear about this nasty from time to time.
Read definition and description here

the full technical name is: Escherichia coli

However, there are many types. Briefly they are: EPEC, EIEC, ETEC, EHEC. The one that raises alarm bells is: E coli 0157
The World Health Organisation has an article.

and the key thing is, quote WHO: Escherichia coli (E. coli) is a bacterium that is commonly found in the gut of humans and warm-blooded animals. Most strains of E. coli are harmless. unquote
WHO has a resource here.

Global meat markets and the financial crisis

2008-11-26T09:43:00.002+11:00

Stories are coming in daily of severe market disruptions in Japan, Korea, the Gulf and Russia of tight and restricted credit lines and bank uncertainties severely restricting the meat trade. Singapore institutions are looking at Korea for opportunities and shipping and trade in general are all feeling the pinch.
Sharp and unpredicatable movements in currencies are not helping and making buyers skitish of confirming deals, only to see a drop of 300 basis points in the currency.
When the world's largest mining and resources company, BHP Billiton, puts its bid for Rio Tinto on hold, it shows how much this credit crunch and financial dislocation has disrupted long standing business arrangements and large and small deal making opportunities.
The euphoria in the Gulf states with huge oil price increases has been temperered by the global downturn in all commodities. The degree to which virtually all commodity prices collapsed in unison has been a wake up call to almost every pundit.
Now we see the huge bail out of Citi banking and ongoing discussions on GM and Ford being negotiated at a time of unprecedented financial market dislocation.
It is disappointing that Aussie farmers have not seen the benefit of falling commodity prices in the prices they pay for inputs. Hopefully this will change soon.
Contribute your thoughts and ideas to the forum.

Most expensive retail meat in Australia

2008-11-24T13:54:00.001+11:00

Can anyone beat $28.95 per kg for rump steak? I doubt it unless you are in Eastern Suburbs of Sydney or Toorak Melbourne. Contributions welcome.

NZ Lamb kill downturn

2008-11-24T11:54:00.002+11:00

Bloomberg and other publications are reporting a big fall in the NZ lamb kill season.

read the article here

quote:
The export kill may fall 23 percent to 20.4 million lambs in the year starting Oct. 1, the lowest since 1963, industry group Meat & Wool New Zealand Ltd. said, confirming an August forecast. Total lamb numbers will fall 15 percent to 27.3 million.
unquote

EU changes agricultural policy

2008-11-23T12:43:00.002+11:00

Please do not get too excited.
No doubt it is a smokescreen to tighten some of the squeeky bits under the rusted framework.

Read about it here.

After reading on it came as no surprise that the livestock sector subsidies were unchanged.

Water rights and grazing properties

2008-11-22T08:42:00.002+11:00

AuctionsPlus reported with sadness that the breeding ewes from Thylunga and Toorale were dispersed this week. It is sad that the properties could not continue with grazing without their water rights.
This issue has gripped South East Australia and the Murray-Darling basin.
Many large projects have been put on hold including a large feedlot development. Financial conditions and market uncertainty do not help the cause.
Toorale was sold by corporate operation Clyde Agriculture.
Read the article from Farmonline here.

Aussie dollar gyrations

2008-11-21T12:51:00.003+11:00

November 21, brings a new set of market gyrations for the little Aussie battler. Live off the DailyFX feed it is 0.6124 at this minute and has fluctuated fairly widely in a range down to 0.6075 US. The carry trade seems to have evaporated with Japanese traders looking to the perceived safety of their own currency and the USD.
Each short term commodity price movement and stock market gyration on the downside brings new challenges.
this site shows interest rates in major countries
with Japan at 0.3% and US at 1.00%, Aussie rates at 5.25% look to have lots of downside potential for the RBA and it is needed sooner rather than later.
Meat exporters will be nervous about these massive exchange rate fluctuations in regard to the tactics of importers who are game to trade.

Sydney retail beef prices

2008-11-19T14:26:00.004+11:00

Current chain store retail prices:
Rump steak $23.65 kg
Sirloin steak $28.00
T-bone $26.50
Fillet steak $40.00

Sydney retail beef primal prices

2008-11-19T12:51:00.002+11:00

Noted following establishments and below beef primal prices in a northern Sydney retailer today:
Est 203, 218
Whole yearling rump $15.99 kg
Whole shortloin $15.99
Whole long fillet $29.99
Whole scotch fillet $23.99
Whole striploin $21.99 kg
Quality generally good.
the butcher shop in question has a whole primal case opposite their display and serving counter.

ABC Rural Australia report on NT cattle property

2008-11-18T17:31:00.002+11:00

ABC rural reports that a timber company has purchased an Australian Northern Territory cattle property called Rocktear Park, 30 klms south of Katherine, NT.

view the ABC rural article

Additional news on cattle property sales from the Australian newspaper quote:

In the Northern Territory, an almost unprecedented number of large-scale pastoral properties are for sale, says Herron Todd White Darwin valuer Frank Peacocke.

Estimates vary but stations with asking prices totalling more than $450 million are on the market.

The biggest offering in the Territory is Allan Myers' Tipperary aggregation, just west of Adelaide River and near Darwin.

view the Australian article:

ABS Report on Principal Agricultural Commodities

2008-11-18T16:10:00.000+11:00

Based on the ABS report released today, ABS quotes sheep and lamb numbers reached an alarmingly low level of 79.2 million head.
It was not long ago historically that our flock was over 150 million head. Years of drought and poor wool prices as well as competition from other enterprises has seen a rather rapid downward trend.

read the report here:

Figures are also out for meat cattle. Queensland held 12 million and NSW 5.5 million. These figures are also low and Australia is going to struggle to meet orders when financial conditions and currency sort themselves out. It seems everytime someone has an international crisis meeting, it scares the markets even more. Maybe they should all stay home and work on fixing their own economies. It is a nasty reality check for the cheer squad for globalisation.

Currents affairs television Sydney

2008-11-18T15:41:00.000+11:00

Both Sydney channels showing current affairs at 6.30pm had stories on the meat industry. One channel has a feature on ham and the other on so called "meat pumped with water". If interested the links are below:

Ham

Meat and water

Bangalow brand ham was quoted at $13.99 per kilogram at a Forestville butcher. Generic ham at $12.99 per kg. Both considerably dearer than the $8.50 quoted on television last evening. An average ham seems to be around 10 kilograms, so it is a big slug for festive meats.

World Meat News Feed

2008-11-18T15:18:00.000+11:00

Please keep an eye on our World Meat News feed which uses RSS to feed a range of value added news and market information which is automatically updated.

Here is the link:

http://www.worldmeat.com.au/rss2/index.php

Market Intelligence in the worldwide meat industry

2008-11-18T14:38:00.000+11:00

We are keen to seek input and interest from contributors in other regions of the worldwide meat industry, particularly Brazil, Argentina and Uruguay.
Leave your comments and questions.

It might be good to have comments on beef and lamb separately.

Australian Meat Trading Floor reaches 12 year milestone

2008-11-17T14:23:00.000+11:00

Brian Todd, the Managing Director of agInfo Pty Ltd, is pleased to announce that agInfo and the Australian Meat Trading Floor has reached another milestone.

We have been operating for 12 years with a growing list of users, clients and activities.

We would like to thank our major sponsor, Hamburg Sud, for their loyal support over the 12 years. We would also like to thank our loyal clients and users.

Brian Todd, Sydney, Australia.