Feedlot capacity lifts Australia grain-fed beef exports

  • Market: Agriculture
  • 27/02/24

Australian grain-fed beef exports have increased, as feedlot numbers rise on the back of favourable weather conditions increasing cattle herd numbers.

The portion of grain-fed shipments in Australian beef exports of 1.08mn t in 2023 was 35pc after reaching a peak of 42pc in 2022 and up from 11pc in 2012, according to the Department Agriculture Fisheries and Forestry.

Grain-fed beef exports have increased by 18pc from a year earlier, helping to achieve an 8pc lift in 2023 grain-fed total meat shipments, according to Meat and Livestock Australia senior market analyst Erin Lukey.

The increase in grain-fed beef exports has been largely driven by increased feedlot capacity. Feedlot capacity totalled 1.27mn head for October-December 2012, rising by 25pc to 1.59mn for the same period in 2023. Cattle feedlot utilisation rates increased to 81.2pc in the final quarter of 2023, driven by a fifth consecutive lift in feedlot capacity, according to the Australian Lot Feeders' Association.

Cattle on feed rose to a new high of 1.29mn head for October-December 2023 from 1.26mn in the previous quarter, with increases in New South Wales, South Australia and Western Australia but falls in Queensland and Victoria states.

Cattle buyers faced limited supplies of feeder cattle in Queensland during October-December 2023, driven by a change to wet weather increasing cattle retention from producers. This fall saw feeder steer prices rise from a low of 222A¢/kg on 26 October 2023 to 387A¢/kg on 8 February this year.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
22/04/24

Brazil 1Q tallow exports triple on long-term contracts

Brazil 1Q tallow exports triple on long-term contracts

Sao Paulo, 22 April (Argus) — Brazilian beef tallow exports totaled 73,930 metric tonnes (t) in the first quarter, a three-fold increase from the same three-month period in 2023 on rising demand. Almost 93pc of outflows between January and March were shipped to the US, according to data from Brazil's trade ministry. Long-term contracts explain the rising flow of exports, even though spot market arbitrage was closed throughout the first quarter (see chart) . The price of tallow in the Paranagua and Santos ports was $960/t fob on 19 April, keeping the arbitrage closed to US Gulf coast buyers, where the reference product was at $901/t on a delivered inland basis. Brazilian tallow is also negotiated at a premium against soybean oil, which closed at $882/t fob Paranagua on 19 April. This scenario has been observed since the 1 December 2023 start of Argus ' tallow export price assessment. Historically, vegetable oil in Brazil was traded at a discount to tallow, but strong demand has boosted the price of animal fat. Some biodiesel plants have been purchasing used cooking oil (UCO) or pork fat as an alternative. In 2023, there were doubts about whether the outflow of tallow from Brazil would be constant. Market participants now believe that the 2024 start of operations at new renewable diesel refineries in the US should sustain exports. Local suppliers that have already signed supply guarantee contracts — some up to three years — with American buyers are also considering export opportunities with Asia, including a new renewable diesel plant in Singapore that could receive Brazilian cargoes. Expansion projects are propelling US demand, including work that would bring capacity at Marathon Petroleum's Martinez Renewables plants in California to 2.35mn m³/y (40,750 b/d)and the Phillips 66 Rodeo unit in northern Californiato 3mn m³/y. These and other new projects will increase annual US demand for tallow by 5mn t. Maintenance on the horizon Maintenance at US refineries has Brazilian sellers bracing for a short-term drop in prices. Between May and June the Diamond Green Diesel (DGD) unit in Port Arthur, Texas, will shut down for maintenance, a stoppage that could impact demand for Brazilian inputs. Market participants have already observed a slight increase in domestic tallow supply, a change they attribute to maintenance at DGD. The advance of the soybean crop in Argentina is also expected to increase the supply of feedstocks to North American plants, as some refineries are returning to soybean oil after a hiatus of several years. The soybean oil quote on the Chicago Board of Trade (CBOT) is an important reference for the price of tallow. By Alexandre Melo Renewable feedstocks in Brazil on fob basis R/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Baltimore opens third temporary shipping channel


22/04/24
News
22/04/24

Baltimore opens third temporary shipping channel

New York, 22 April (Argus) — A third temporary shipping channel has opened at the Port of Baltimore to allow more vessel traffic around the collapsed Francis Scott Key Bridge. Located on the northeast side of the main channel, the new passage has a controlling depth of 20-ft, a 300-ft horizontal clearance, and a vertical clearance of 135-ft. When combined with two other temporary channels opened earlier this month the port should be able to handle "... approximately 15 percent of pre-collapse commercial activity," said David O'Connell, the federal on-scene coordinator. The main shipping channel of the Port of Baltimore — a key conduit for US vehicle imports and coal exports — is expected to be reopened by the end of May, the Maryland Port Administration said earlier this month. The bridge collapsed into the water late last month when the 116,851dwt container ship Dali lost power and crashed into one of its support columns. Salvage teams have been working ever since to remove debris from the water and containers from the ship in order to clear the main channel. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Ameropa taps Zacharias to serve as CEO


15/04/24
News
15/04/24

Ameropa taps Zacharias to serve as CEO

Houston, 15 April (Argus) — Swiss agribusiness Ameropa has tapped fertilizer subsidiary head Josh Zacharias to serve as chief executive starting today. Zacharia succeeds former chief executive William Dujardin, who resigned 30 November for personal reasons after nearly four years in the role. Zacharias was promoted from chief executive of Ameropa's subsidiary Azomures, a nitrogen fertilizer producer in Romania. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Michigan organic hens culled over bird flu


12/04/24
News
12/04/24

Michigan organic hens culled over bird flu

Washington, 12 April (Argus) — At least 2mn head of organic egg layers have been culled by egg producer Herbruck's Poultry Ranch in Michigan because of an outbreak of Highly Pathogenic Avian Influenza (HPAI), according to market sources. The US Department of Agriculture's Animal and Plant Health Inspection Service (USDA APHIS) has detected HPAI in Michigan poultry operations in recent weeks. APHIS data indicates that 4.076mn head of poultry were culled in Ionia County, Michigan, where Herbruck's is located, during the first two weeks of April. Argus estimates that 2mn head of organic egg layers consume about 4,500 bushels of organic corn and 63 short tons of organic soybean meal per day. Herbruck's operations are not expected to return to normal until late summer or early fall, which would lead to deliveries of organic corn and soybean meal being delayed or shifted to other buyers until mature replacement egg layers can be raised. Herbruck's did not immediately respond to a request for comment. The cullings are expected to have a sizable impact on the Michigan organic corn market, as Herbruck's is among the largest users of organic corn in the region, according to market sources. Deliveries of old crop organic corn contracts are being delayed and rolled forward to the fall 2024 new crop for delivery, the source said. With the rolling forward of old crop contracts, some new crop 2024 contracts have been canceled outright, they said. According to industry contacts, organic corn deliveries being pushed from old crop to new crop has left farmers in the region concerned about having sufficient storage space for new crop corn come harvest. As a result, organic farmers in Michigan are expressing interest in taking lower bids that previously received little interest in order to clear old crop out of their bins. The rush to sell old crop organic corn could boost liquidity in the market, especially from the sell side, and apply further bearish pressure to the market as farmers compete to clear out bin space. The Argus Corn Belt delivered spot price for feed grade organic corn fell by 4¢/bushel in the week ended April 6 to $7.25/bushel. The H5N1 variant of HPAI was discovered in the first commercial poultry flock in February 2022. In March this year, HPAI was confirmed in US dairy herds , with confirmed dairy cases in seven states as of 11 April. By Alexander Schultz Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Panama Canal to restrict May transits on work


09/04/24
News
09/04/24

Panama Canal to restrict May transits on work

New York, 9 April (Argus) — Maintenance at the Panama Canal for the Panamax locks, responsible for around 70pc of all ship crossings at the waterway, will cut the daily number of vessel transits through these locks for nine days in mid-May, the Panama Canal Authority (ACP) said today. The ACP said it will reduce Panamax lock transits from 7 May to 14 May by three to a total of 17. The cuts entail two fewer "super" category slots for vessels like medium range (MR) tankers and Supramax bulkers and one fewer "regular" category slot for smaller vessels. An additional day of downtime "allowing 24 hours for unforeseeable maintenance delays" will put the projected end-date for maintenance and the return to 20 total Panamax lock transits on 16 May, according to the ACP, constituting a nine-day reduced-transit period that should drop total transits in the period by around 27 vessels. The potential for heightened competition amid a backlog of vessels vying to transit during this time could be mitigated by assigning "additional transits per day for each vessel category" based on the canal's "daily water consumption quota", according to the ACP. "These additional slots may be assigned to booked vessels that have already arrived at canal waters," the ACP said. "This measure is a temporary service subject to operational assessment, open to all vessel types based on the arrival date." The maintenance will primarily target the west lane of the Gatun locks, where ships enter the Panama Canal from the Atlantic basin, while the ACP noted that the east lane of the Miraflores locks on the Pacific side will undergo a simultaneous maintenance period from 11-12 May. Panamax lock transit auction prices hit low The average cost for ship operators to win an auction to transit the Panama Canal via the Panamax locks hit its lowest level Monday since Argus began the assessment in January on lower demand, particularly for dry bulkers utilizing alternative routings, and an uptick in auction slots in early March . "Since the peak period last year, auction prices have leveled off. They are generally near normal levels today," said the ACP. The rate for a Panamax lock auction dropped by $14,173 to $94,314, the lowest average price to transit since 26 January and representing a drop of $450,936 from the high hit on 5 February on a jump in demand ahead of lunar new year holidays across Asia-Pacific. Of the smaller dry bulkers that can fit in the Panamax locks, only 34 Handysize, 38 Supramax, and 31 Ultramax bulkers transited the Panama Canal in March compared with the 92 Handysize, 66 Supramax, and 88 Ultramax bulkers that transited in March 2023, the lowest number of transits in March for these segments through 2017, according to Kpler data. Dry bulk Panama Canal transits down, tanker transits stabilizing The share of dry bulkers utilizing the Panamax locks at the Panama Canal was at 15.2pc of total transits in February, down from the 25.5pc share that dry bulkers held in September 2023, according to ACP data, before the ACP instituted daily vessel restrictions and the current prebooking/auction slot system supplanted the previous, first-come, first-serve waiting system in late October 2023. Meanwhile, 149 MR tankers transited in March, down from the 169 that transited in the same period the year prior but up from the 107 MRs that crossed the canal in February. MR transits have risen every year in March, according to Kpler, as west coast South America diesel demand jumps on the resurgence of refinery utilization in the US Gulf coast after the first quarter turnaround season draws to a close. Crude, product, and chemical tanker transits rose by 1.7 percentage points to 30.3pc, making up the plurality of all Panamax lock transits collectively in February from September 2023, according to ACP data. The uptick in available Panamax lock auctions in early March has likely offset the steady demand for these vessels and contributed to the downward pressure on auction prices, while the reduced transits during the upcoming nine days of maintenance could reverse this trend in the short term. ACP expects transit restrictions to lift by 2025 In the long term, the Panama Canal expects a return to normalcy within the next two years, beginning with the start of the rainy season in the coming weeks. "Current forecasts indicate that steady rainfall will arrive in late April and continue for a few months," the ACP said today. "If this remains the case, the canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025." By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more