At this stage, the pre-Christmas cattle flow appears to be more muted in the North Island in comparison, which may open up the channels for more South Island cattle to travel to the North Island for processing.
The threat of further backlogs in the new year, and subsequent price deductions that would accompany them, would warrant a cautious approach to delaying slaughter for killable cattle – even if they could stand to gain a few kilograms. Whatever gains that could be made in carcase weights are likely to be lost in deductions to beef schedules. For example, an extra 30kg of liveweight would be worth $75-80/hd at current slaughter values, but if schedules drop by 25c/kg while that liveweight is gained, then no extra value is realised.
Therefore, it is worth grabbing the calculator to back up any gut decisions about target slaughter weights, particularly when replacement store stock is good buying relative to current slaughter values.
Prime cattle supply has been curiously strong during winter and spring, with weekly slaughter rates consistently pushing 2-3000hd above last year’s levels. The average steer carcase weights during August and September were 323kg and 318kg respectively. This is higher than the usual 315kg range for this time of year, suggesting that these higher kill rates are the result of heavy cattle that have been held on farms for longer.
Because prime cattle require extra chilling space and boning time compared to manufacturing bull and cow carcases, prime slaughter throughputs have borne the brunt of the processing slowdowns and storage issues that have punctuated this year. This would have caused some prime cattle to accumulate in the system, pushing slaughter back into the off-season. When we also add in the widespread drought that prevented some cattle from reaching slaughter weight before the winter, and also some trader optimism that delaying slaughter until the spring time would result in better returns, we have a pretty good recipe for carrying over some extra cattle into the start of this season.
Unfortunately, this season’s cattle have also faced challenges; the slow start to the spring pasture did not help the lighter drought-challenged cattle catch up on weights. Even now, with most regions in a comfortable position for feed, cold weather has taken the shine off cattle growth rates. This has some farmers cancelling bookings to give cattle more time to reach target slaughter weight. Particularly bull farmers in Hawke’s Bay, where extreme weather earlier on has impacted bull yields.
For cattle that are up to weight now, there is also the temptation to hold off slaughter to control excess pasture.
This all points to a delay in the peak cattle slaughter season, which is a concern for slaughter space into the new year. Nobody wants a repeat of last season’s gruelling six-month cattle slaughter backlog. A delay in the prime cattle and bull kill through November and December last year was an important contributor to this situation as it meant that bookings clashed with a drought offload in January and then the peak dairy cow cull in March. Supply chain issues and New Zealand lockdowns were also key contributors, and these are not entirely out of the question for this season either.
