Here it is. Another quick review of what we think are big influencers on the beef and cattle markets at the moment. Again it comes with an international flavour including a short note on currency and weather.
I have just landed in Beijing where the outlook from the hotel is bleak in comparison to the rain fuelled Spring in Boorowa.
CHINA BEEF SUSPENSION UPDATE
Meetings have now started to take place in China. A Food Safety Working Group has been established and were meeting on Thursday and Friday last week. Unfortunately still no end in site and it is widely expected to be November or later before suspensions are lifted.
JBS SCANDAL CONTINUES
Judge freezes all properties of the Batista family: The decision to freeze Batista's assets is somewhat controversial as the decision is believed to be based upon newspaper reports rather than proper judicial rulings. Interestingly the price of JBS shares has decreased by 25.6% since the end of 2016. Read more.
RBA ON HOLD TO CONTRIBUTE TO WEAKER AUD OUTLOOK
There are many views out there on the movement of the AUD in coming months. I recently read a note from BIS Oxford Economics which seemed to make sense. They see the AUD depreciating to US$0.75 by June 2018 driven principally by the narrowing of the gap between interest rates in the US and Australia. Commodity prices are expected to be lower and to put downward pressure on the AUD.
DOES ANYONE EVER GET THIS RIGHT?
ANZ has interest rates picked for 83 cents by the middle of 2018 and 74 cents by the year end.
CBA believes that based on a weaker USD, the AUD will rise to 85 cents by the year end.
NAB has said 73 cents by year end.
Westpac at 76 cents by mid year and 70 cents by 2018.
BEEF TRADE FLOW AND KOREAN SAFEGUARD TRIGGERED
Average monthly beef trade flow volumes since the start of 2017, as reported by the Department of Agriculture and Water Resources, shows that consignments to Japan are currently running 15% above the 2016 averages. In contrast, consignments to South Korea over the same time frame are running 14% below the average levels set in 2016.
On Friday a safeguard was triggered for beef exported to Korea from Australia from 29.4% tariff to 40%. It came as no surprise and although it will likely have effect on the last 6 weeks of exports for the year it will probably not be drastic.
The safeguard was also triggered in 2016 and it shows Australian beef is being well received in Korean market.
Source: Mercado and Beef Central
AUSTRALIAN BEEF AND EXPORT PRICES
Australian beef exports in September totalled almost 88 tonnes shipped weight (swt) - a 17% increase year-on-year.
Increased cattle turn-off, driven by ongoing poor seasonal conditions largely underpinned the rise of shipments compared to last year.
Australian cattle slaughter in August totalled just over 677,000 head - 10% higher than the same time last year.
Very dry Winter: Rainfall from 1st June to 31st August 2017
Things starting to look up: Rainfall for the week ending 10th October. We are now seeing cattle buyers from the north starting to push the job in NSW on back of this and even more recent rain. Angus feeder steer purchases this week are up 10 to 15 cents on last week.
A FEW INTERESTING STORIES FROM CHINA...
China postpones food import controls after global outcry: China has granted a transition period of two years food import inspection certificates after complaints by the United States and Europe.Read more
Inside China's new censorship machine: Chinese companies have dramatically increased their number of workers policing online content. Read more
Hema finds partners to expand its 'New Retail' model in China: Alibaba is opening seven new Hema supermarkets, including the first in Southern and Southwestern China. Customers currently place an average of 4.5 orders per month. Read more
7 reasons Alibaba is becoming more like 'China's Google' than Baidu: E-commerce stores in China have 20-50 times more produce information than an equivalent Amazon store. Read more
WORLD CATTLE PRICES
This is some seemingly nondescript Angus 110 day HGP free beef we processed up in Queensland last week. Caught us all by surprise getting this off relatively short fed cattle. It scored a marble score 8. Something that I have never seen off such a short fed animal or an Angus. (We also processed some 200 day Angus in the last fortnight and there was nothing close to this).
2017 SALE BUYER HIGHLIGHTS
This is somewhat belated but we did not fully report on some of our recent sales results at the Spring bull sale...
A good turnout at our 2017 Spring bull sale made for a strong result. Thank you to those top-price purchasers, volume buyers and performing agents for your support of our program. Some of the highlights included:
Pathfinder Angus and Chiltern Park Angus purchased the stand out Intensity son L123 for $26,000.
Trevor Henwood purchased eight bulls for an average price of $8,600.
Nick Harton, Jim Hindmarsh Co, played a big role in the sale and secured 12 bulls for his clients.
Buyers and agents inspecting bulls prior to the sale
VERY QUIET KENNY'S CREEK BULL WITH CLIENTS
Sam Davidson and father Frank with Kenny's Creek Warwick D149. D149 is a nine year old bull with plenty of longevity and docility (obviously). His dam is a Stern Exact cow with 82 registered progeny. Very pleased to see this bull doing so well.
Still working at nine years old!
Kenny’s Creek Angus, Hillgrove, 591 Murringo Road, Boorowa NSW 2586, Australia