Well it is the end to another productive year on the farm. Commodity prices remain strong and I can imagine that despite some mixed results on harvest many farmers would be happy with the year and particularly prices currently being offered for wool, lamb and beef. 2018 seems set to start in the way 2017 finished on lamb and for beef we sense processors and feedlots trying to keep a lid on prices.
For kill cattle we feel that there are a good number of cattle to come forward with solid weights in the next few months. In recent weeks we have seen the feeder cattle price remain strong and prices for kill cattle soften ( in southern markets an Angus steer at 450kgs could be purchased for $3.10/kg for the feedlot and the same steer with another 100kgs will be virtually the same total dollar value). With increased grain prices looking somewhat permanent for feedlots we expect the pinch to be gradually shifted from the feedlotters back into a softening of feeder cattle prices.
Have a great festive season and look forward to speaking in 2018.
2017 BEEF WRAP UP
Bull sale prices - the average price for Angus bulls sold at auction increased by $300 on 2016 to $7630. With an extra near 900 bulls going under the hammer.
Increase in carcases weights - for the first 10 months of 2017, the average male carcase weight was up by 10kg year-on-year to a record of 329kg.
Slaughter cattle - supplies improved from mid-2017 and are forecast to improve more in 2018.
Source: Angus Australia, Beef Central
'BEYOND MEAT' BURGER MAKERS
Plant-based burger makers raised $55 million to triple their production
The burgers are designed to taste like beef patties but are derived from plants
Beyond Meat burgers are sold in more than 5000 stores across the US.
EXPORT PRESSURE MOUNTS IN BEEF INDUSTRY
Beef production is set to increase by 1.3 million tonnes in 2018.
2018 will see a power change with beef importers being in a more favourable position.
China's import demand will increase to 800,000 tonnes of beef.
Beef exports will increase by 7% in the US with their cattle herd expanding again for the third consecutive year.
Source: Food Magazine
INTEREST RATES - Burning down the house
I recently read a good article on interest rates and although on rates and house prices there is no doubt it will have an effect on ag enterprises. The key themes from the article were:
The RBA will likely increase rates from August 2018 and then roughly two rate hikes every 12 months. This will equate to 150 points of rate hikes over three years
Low interest rates have been capitalised into property prices. In housing in particular this is likely to mean slow growth in housing prices for some years.
An ABIEC report suggests that 55 tonnes of fresh beef was imported from Brazil into Australia during 2017.
Beef from Brazil is not permitted into Australia because of foot and mouth disease and BSE disease risks. But cooked, processed products containing Brazilian beef are.
The Australian Department of Agriculture has no record of any imports from Brazil.
One theory suggests the ABIEC report mean 'Austria' instead of 'Australia'
FINISHED CATTLE - AUS VS USA
Finished cattle have realigned with the US market. The relative price difference between finished cattle in both countries in USD/AUD has returned to a 20% discount. It was a 57% discount at the height of prices in the US and the drought in Queensland.
The USA is Australia's main competitor but Brazil has recently been doing more business into the Asian markets. Brazil's success has come largely from favourable currency movements and the growth in Australian cattle prices.
The first week of December brought some BIG rain.
Boorowa received around 100mm+ with a nice green tinge put back onto the paddocks.
The last time we saw a rain event like this was back in 2010.
LAST SALE 17 - FIRST SALE 18
BLUETONGUE ZONING MAP UPDATE
A temporary blue tongue virus (BTV) zone has been established in northern Victoria and extends into southern NSW.
The action was taken as a precaution in response to the detection of BTV antibodies during pre-export testing in Victorian-bred cattle.
WORLD CATTLE PRICES
Kenny’s Creek Angus, Hillgrove, 591 Murringo Road, Boorowa NSW 2586, Australia