Tough times for cattlemen
SOUTHERN Downs beef producers have been warned to steel themselves for a "tough three or four months" as widespread drought, rising grain prices and a high Australian dollar starts to impact locally.
While cattle prices fell across the state as saleyard numbers increased, Warwick livestock agent David Friend said local markets remained "relatively firm".
"We have been very fortunate not to have large numbers through the yards, which has helped put a floor in prices here," he said.
"There has also been a good season from Warwick through to Glen Innes, which has worked in our favour.
"We are still seeing some opportunistic buyers with good feed in paddocks investing in younger cattle.
"Others are sitting on the fence waiting to see if prices get cheaper."
Even hay prices are rising as a result of feed shortages further west and north so I think going into winter, which is historically a dry time for us. We are going to see further pain.
However Mr Friend warned the situation could change quickly once paddock feed was hit by frost.
"Winter oats has been planted but producers urgently need rain to get some growth so what happens next cattle price-wise really still hinges on the weather," he said.
John Dee Meatworks general manager Warren Stiff was in agreement.
Speaking to the Bush Tele yesterday from Southern China, the local processor said a complex set of circumstances had set the scene for a "challenging time" for those involved in all levels of the beef sector.
"Being mindful of the conditions everybody is facing I believe we are in for a tough three to four months," Mr Stiff said.
"The drought, an increase in grain prices - which in term impacts on grainfed rations - and a high Australian dollar means trading conditions are still very tight.
"Even hay prices are rising as a result of feed shortages further west and north so I think going into winter, which is historically a dry time for us. We are going to see further pain.
"Winter is always cold and hard here and we are, like most of Queensland, most likely a few months off rain so I think things are going to challenge producer's decision making in the short term.
"From a supply perspective there are a lot of cattle on
feed at the moment but there are no clear answers as to when the overall outlook for beef will improve."
But the processor said his company was committed to developing relationships with new markets, like China, in the interests of the long-term future of the Warwick beef business.
Meanwhile AgForce Queensland general president Ian Burnett said Queensland beef producers were some of the most efficient in the world and this should help them survive the current tough times.
"The current pressures on profitability in the beef sector particularly, but also across other commodities, did not develop overnight and there is certainly no single silver bullet solution to alleviating the weight of these problems," Mr Burnett said.
"However, we are the best suppliers of premium primary produce in the world and this will underpin our longer term ability to remain a viable and vibrant industry."
Yet the recovery is far from imminent with Meat and Livestock Australia's latest report indicating Queensland cattle slaughter numbers have now reached record levels.
Given the extent of the failure of the 2012-13 wet season across northern Australia, the larger cattle herd and little prospect for any supply disruptions through Queensland, the historically high slaughter levels are expected to continue throughout May.
This is reinforced by reports of processors being heavily booked for weeks in advance, while Queensland saleyards continue to bulge under the pressure of increased turnoff.