February Market Update
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February Market Report

Last night we had some travellers at our house for dinner. Excited to have guests I produced some MB2+ Scotch Fillets which I had been hoarding and presented them to the table seasoned, cooked and sliced to perfection, only to learn that one of our guests was a vegetarian.  Did she know where she was?!
I tried to be polite, but it wasn't long before I found myself heckling an unsuspecting 20 something Kiwi. “Why are you a vegetarian?”  Turned out she had watched a documentary about cattle and beef production in the U.S. and had shortly thereafter sworn off meat for life, because she felt sorry for the animals. 
Well, I tried everything (short of force feeding) to get her to just try one bite, but she remained true to the documentary and her ideals.
I think this encounter highlights a few things we already know about the world we operate in...

  • Social media and TV/ movies are incredibly influential on the behaviour of young people today. Australian producers have to be as forthright in telling the good news stories to counter what will be ongoing calculated campaigns by animal rights groups
  • As producers our world already seems encased in regulation and compliance. We need to embrace these frameworks and go beyond so we can command top prices for our beef in a global economy
US demand increases
  • Increased domestic demand for beef in the US and growth in exports have held prices globally in typically the hardest quarter of the year and will likely form the basis for price growth
  • Strong US pricing should help Australia get better prices out of Japan and Korea because of their dependence on US beef. What Japan and Korea cannot get from the US they will come to Australia for.
Source: Simon Quilty
There is a strong correlation between Australian Cube Rolls chilled and US frozen Rib Eyes in Japan. If US pricing is strong then this will support Australian beef prices. Source: Simon Quilty

US Live Cattle Futures

Strong US cattle will likely drive global beef prices. Cattle futures in the US have increased by 12% in the last 6 weeks driven by USDA forecast of increased production by 2.1%. Source: Simon Quilty (simon.quilty@bigpond.com)
Australian EU Quota
  • Quota for beef into the EU continues to be challenging for exporters
  • As at 1 February there was only 900tonnes of Grain Fed available through to the end of March.
Source: AMIC
Feedlot numbers ease
  • Lot feeders are operating on unfavourable terms with restricted access to grain following the poor winter harvest in 2018.
  • Feedlot occupancies remained above 75% at the end of December, down from 80% from three months earlier
Source: Beef Central

Genome mapped for height gene in cattle

VIDEO - Click to PLAY. Professor Ben Hayes from University of Queensland on mapping the height gene in cattle
Super Market Trade Show in Tokyo, Japan
Last week we went up to Tokyo to the Supermarket Tradeshow. It was my first time to Japan and although my travel was limited to the show I really liked the country and will be back for business and to travel (excited about the Rugby World Cup in 2019).
Here are few quick beef facts on Japan:
  • Japan is Australia’s largest export beef market, worth more than $1.8 billion for the year-to-November. 300,000t were exported to Japan last year.
  • The tariff on both frozen and chilled product will drop to 9 per cent over 15 years. The tariff is currently 29.9 per cent for chilled beef and 27.2 per cent for frozen beef. Huge!
  • Australian meat dominates brand perception surveys and is the most purchased import meat.
  • BBQ is a growing trend in Japan
  • Currently the US is taking 45% of our grass fed beef. Grass fed is thought to be a growing segment in the Japanese market which shows preference to fatty/ marbled beef.
  • The USA exports 27% of their export beef to Japan which represents their largest market.
  • Full sets of beef used to be at 37% of all Australian/Japan exports. This now sits below 3%.
Discussion about the Japanese market with Andrew Cox - MLA Japan
Approximately one third of the chilled protein display was meat. Mostly beef but some lamb. And the rest... fish and all other manner of aquatic life.
This piece of Wagyu beef (looks like blade to me) was $140/kg. $30AUD for this piece of beef for 166g.
This was the stand next to us at the expo. Shark sushimi! Although I am definitely a fan of Japanese cuisine this one did not sit right with me and I abstained for the three days.
Bill trying his hand at Japanese without our Japanese translator Mitzi (who spent 10 years at Tasmania University doing conservation management to then come home to a country with more interest in commerce than national parks).
24 PTIC Heifers on Auction Plus
Top quality heifers in forward condition on farm at Breakfast Creek Station. PTIC to top low birth weight, short gestation Kenny's Creek Angus bulls to calve over three week window. These young breeders are the lead of 200 PTIC hefiers which have been purchased as weaners out of the paddock. Heifers would stand up in any herd, have length, spring, volume and bone to good frame productive breeders.

Auction Plus - Lot 276 - Auction 146 - Friday, 16 February 2018


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