April Market Report
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Kenny's Creek Female Sale - 22 May

This afternoon we have put the finishing touches into the sale catalogue for the 112 lots we are selling on 22 May at Hillgrove. Catalgoues will start going out next week, if you would like one please click on the link above. In the meantime the catalogue is live on Angus Australia.
I stopped into Singapore on the way home from Dubai recently and found it a very exciting market. Food is king in Singapore and beef/lamb is sold at a big premium with a big focus on quality. I did the run around to some supermarkets/ butchers and found beef priced to the 100g and in most cases double the price of retail beef in Australia.
I recently asked a friend in Singapore where he purchased his meat. From Harris Farm in Sydney was his reply. Every time he comes home he goes back with a bag full of beef.
'No Feed, No Water' the grim reality of potential beef plant closures
  • January female kill percentage was 50.7%. The 10 year average is 47% 
  • We are heading for a potential 25 year low in June 2019 of 25.5m which takes into account the reduction in herd size from 27.6m in 2018
  • Potential beef plant closures could occur with a potential reduced kill of 6.4m or 18%. Reduced cattle supply will likely go on for 2-3 years with average seasonal conditions.
Source: Beef Central, Simon Quilty
Australia to keep spot as world's third biggest beef exporter says USDA
  • Australia is the third largest exporter behind Brazil and India (mostly Buffalo meat)
  • Imports by lower income countries would fuel much of the increase in lower-value grass fed beef
  • Beef imports into a combined China and Hong Kong will increase 33% by 2028 according to US Dept of Ag
  • The Middle East and South East Asia will drive most of the global consumption growth

Source – Vernon Graham

Wet stuff doing things to the market
  • Cattle prices are back to levels of late last year on the back of widespread rainfall across eastern Australia. 40% of the national herd has experienced reasonable falls.
  • Expect volatility but not much downside in the market until May
  • If we have more rain the restocker market is likely to take confidence in this and take EYCI to 600c

Source: Mecardo

China

China pork shortage looms
  • African Swine Fever has continued to spread in China. A reported 950,000 pigs having to be killed, there is a reported 20% decrease in the sow inventory. This is likely to be an understatement.
  • Estimates of 6-30% decline in pork production for China will leave a gaping hole for 2019 and 2020
  • Average market prices of pork (22RMB/kg), chicken (19RMB/kg), beef (65RMB/kg) and sheepmeat (62RMB/kg) make direct substitution most likely to come from imported pork and chicken. 
  • Beef trade has surged with China and it has happened across all of the major suppliers -  Australia (up 49%), NZ (up39%), Brazil (up 63%) and Argentina (up 109%).
Source: MLA
China is now the number one importer globally of beef
  • USA has typically set the market for world beef prices but it looks increasingly like China is setting the market
  • Demand for pork in China is falling and beef is becoming more popular
  • China now represents 18% of Australia’s beef market
  • Competition has increased in China with UK, France and Ireland all gaining beef access in 2018
  • From Australia 83% of beef going to China is cuts and 17% is grinding meat. In contrast the USA is 61% grinding meat and 39% as cuts.

Source: Beef Central / Stock and Land/ Simon Quilty

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