Glossary

Abattoir: A plant or factory where cattle are slaughtered for food (also known as a processing plant, slaughterhouse, or meatworks).

A¢/kg FAS: Australian cents per kilogram free alongside ship.

Agent: Sells and buys cattle on behalf of clients. (See also 'livestock agent' and 'stock and station agent').

Arbitrage: Simultaneous purchase and sale of two different contracts (or a combination of cash and futures) to take advantage of perceived mispricing. In a pure arbitrage, mispricing is locked in and a risk-free profit made through trades.

Ask: See Offer.

AuctionsPlus:  An internet based livestock auction system (see www.auctionsplus.com.au).

Backgrounder:  A cattle producer who produces young cattle ready for lot feeding.

Backgrounding: Growing program for feeder cattle from the time calves are weaned until they enter a feedlot to be finished on a high protein ration. (See 'weaner' and 'feedlot').

Basis: The difference between the price on the physical market and the futures price.

Basis risk: The risk that basis moves in an unexpected manner.
 

Bear market: A market in which prices are in a declining trend.
 

Blue tag: A tail tag on a cow at a physical market (store or prime) that is in calf less than four months.

Bid: An indication to buy at a given price. A bid on the futures market is the price at which participants can sell futures contracts.

Bobby calf:  A calf that has been removed from its mother. (In the case of a dairy cow, this generally happens when the calf is only a few days old so it doesn’t deplete the cow’s milk supply).

Boning room:  Area of an abattoir where the carcase is cut into smaller portions.

Bos indicus: The breeds of cattle that are referred to as tropical or humped breeds, eg Brahman, Sahiwal and other Zebu breeds.

Bos taurus: The temperate, British or European breeds of cattle, eg Angus, Poll Hereford, Charolais and Limousin.

Bovine:  Animals of the ox family, commonly referred to as cattle.

BSE: Bovine spongiform encephalopathy (also known as 'mad cow disease'). This is a slow progressing degenerative and fatal disease affecting the central nervous system of adult cattle.

Boxed beef: Cuts of beef put into boxes, for shipping from processor, to wholesalers or retailers. The primals (round, loins, ribs and chuck) and sub-primals are between the carcase cuts and retail cuts.

Bruising: Caused by live animal handling issues and negatively impacts on the value of the carcase.

Bull:  A male bovine with sexual organs intact and that is capable of reproduction. A mature male animal used for breeding.

Bull market: A market in which prices are in an upward trend.

Buyer: Purchases stock at physical markets (prime and store). Buyers fall into two groups: commission (works for many different clients) or salary (works for one company only), eg processor, feedlot, restocker and backgrounder.

By-product: Product of considerably less value than the meat of the carcase, eg hide and offal.

¢/kg:  Cents per kilogram. Units which cattle are sold in at a physical prime market.

C&F: Cost and freight – refers to the quoted price for the goods, including freight to the delivery point, but not insurance. Also written as CandF.

Calf:  A bovine no permanent incisor teeth, can be a male or a female with no secondary sex characteristics.

CALM: Computer Aided Livestock Marketing (the previous name for AuctionsPlus).

Carcase:  The body of an animal after being dressed (removal of head, feet, hide and internal organs)(See 'dressed').

Carcase price: Expression of the meat value of sheep and lambs after internal organs, head, feet and skin are removed. Carcase weight prices are calculated by the following formula:($/head value – skin value)/carcase weight.

Cash market:  The market where cattle/sheep/lambs are physically bought and sold. (See also 'AuctionsPlus', 'saleyard', 'direct sale' and 'physical market').

Cash settlement:  In relation to the futures market, where settlement involves payment or receipt of the difference between the settlement price and the agreed future price.

Carcase weight: The weight of an animal's carcase. Generally refers to price quotes (eg: ¢/kg cwt – cents per kilogram carcase weight) where the price for the animal is quoted per kilogram for the animal is quoted per kilogram for the animal's carcase. (See also 'liveweight' and 'dressing percentage').

Carcase weight equivalent: A term used to demonstrate an estimate of the carcase weight has been made. Generally used when estimating carcase weight from 'shipped weight'.

Certified grainfed: Cattle sold with a statutory declaration to verify 70 days minimum at a registered feedlot.

CIF: Cost, Insurance, Freight – the quoted price for the goods including freight and insurance costs delivered to final destination.

CL: Chemical lean.

Compensatory growth: Rapid growth that occurs on high grain feed, after an animal has experienced weight loss due to a period of under-nourishment.

Competition: Level of activity between buyers to secure supply at a physical market (prime and store). (See 'buyer' and 'competition').

Composite: A stabilised or synthetic crossbred breed established from the mating of progeny of two or more existing breeds, eg Belmont Red and Droughtmaster.

Conditioning: See 'backgrounding'.

Contract month: The month in which cash settlement or delivery is to be made in accordance with a futures contract

Co-product:  Another description for by-products including hide and offal.

Cow:    A mature female used for breeding with eight permanent incisor teeth.

Close:  The last traded price for the day, usually in respect of the futures market.

Close out: To undertake a trade to offset an original futures trade eg a trade opened through buying futures contracts would be closed out by selling the same quantity of futures contracts (and vice versa)

Crossbred:  Animal produced by crossing two breeds.

Crossbreeding: Mating animals from different breeds to utilise hybrid vigour (heterosis), breed complimentary and characteristics.

Custom feeding service: A service provided by feedlots to producers. Producers can pay to have their cattle ‘finished’ on grain before they are sold.

cwe:  See 'Carcase weight equivalent'.

cwt: See 'Carcase weight'.

cwt price:  Carcase weight price – the price of a live animal expressed in carcase weight (see 'carcase weight') or the price of animal’s carcase (per kilogram). (See 'liveweight price').

Dam: Mother of a particular calf. (See 'cow').

Damara: South African fat-tailed meat breed of sheep.

Dark cutter(s): Carcases which have muscle tissue that is dark coloured rather than the desirable cherry red. Usually the result of the depletions in muscle glycogen stores. Can be influenced by implant strategy, handling techniques, weather and sex of the animal.

Day order: An order in the futures market that automatically expires if it is not executed on the day it is entered. All orders are assumed to be day orders unless otherwise specified.

Deliverable (physical) settlement:  Where settlement involves delivery and receipt of the underlying commodity. 

Demand: Level of interest by buyers to purchase supply at physical market (prime and store). (See 'competition' and 'buyer').

Dentition: Number of permanent incisor teeth an animal has; relates to age.

Direct sale:  The sale of cattle on-farm, direct to a lotfeeder, processor, backgrounder or restocker, where there has been no intermediary party or process.

$/head: Dollars per head of livestock. Units by which cattle are sold at store sale.

Domestic market: Also called the trade market. Cattle are consumed in the country they are produced in. Generally this will be young and lighter cattle compared to the export market. (See 'trade market').

Drafts: Term applied to a group of lambs marketed by a producer.

Draw: The number of cattle rostered for sale at a physical market (auction). Usually made available the day before the sale is conducted.

Dressed:  The removal of an animal’s head, feet, hide and internal organs during processing. The carcase is now ready for further processing, which will be dependant on its market destination. 

dcw:  Dressed carcase weight, also called carcase weight.

dwt: Dressed weight.

Dressed weight price: Also called carcase weight price.

Dressing percentage: The percentage of an animal’s liveweight that is its carcase weight. Used to estimate a live animal’s carcase weight from its liveweight: carcase weight / final liveweight x 100.

Dry season:  The low rainfall season across northern Australia running from May to September. In southern Australia, this is from December to March. (See also 'wet season').

Drought:  Below average rainfall for an extended period of time.

ESTLI: Eastern States Trade Lamb Indicator.

Expiry Date: Settlement date (in respect to the futures market).

Export market: A market that a country directs product to. For example, in Australia this might be Japan, the US or European Union (EU).

EU: The European Union –  an international organisation of European nations formed after World War Two to reduce trade barriers and increase co-operation among its members.

Ewe: A female sheep with more than two permanent teeth.

Exporter: An accredited export abattoir or boning room which slaughters and or prepares stock for export markets.

EYCI: Eastern Young Cattle Indicator (EYCI), which is used as a general cattle market benchmark. 

FAS: Free alongside ship – refers to export price quotes where the seller is obliged to pay warehouse services, packing, inland freight and port charges, but not placement of goods onto the ship. The buyer is obliged to pay overseas freight, charges in foreign port, customs duties, quarantine and delivery to final destination. (See also 'FOB').

Fat: A slang term previously used to describe animals suitable for slaughter. This term has been removed from terminology due to the perception by consumers as 'unhealthy'.

Fat score:  The measure of fat cover across an animal’s ribs and rump. Ranging from 1 (very lean) to 6 (very fat).

Feeders: Lambs that are bought by graziers to be fed with grain and/or some other type of supplementary feeding.

Feeder steer:  A steer purchased by a lotfeeder to be placed in a feedlot. Cattle specifications (entry weight, muscle and fat score, breed, age etc) are dependant on the market the animal is destined for.

Feedlot:  Where cattle are fed a high protein grain based diet to reach exact market specifications.

Finished: Once cattle reach market specifications and are ready for processing, they are described as 'finished'. Cattle can be either grass or grainfed.

First-cross: Type of lamb developed by mating a British bred ram (ie Border Leicester) with a Merino ewe.

FMD: Foot and mouth disease – a highly contagious disease that does not affect humans. FMD causes severe blistering in the mouth and inflammation of the hoof of the infected animal.

FOB:  Free on board – the quoted price for the goods delivered to the ship for shipment. (See also 'FAS').

Fresh: Term used to describe the appearance of young, clean and sappy lambs.

Good till cancelled (GTC) order: An order that is held by the broker on behalf of the client until it is filled or cancelled. (See also Open Order).

Grade score:  The combination of fat and muscle scores used in assessing the quality of an animal. Gives an indication of the quality of the carcase. (See also 'muscle score' and 'fat score').

Grainfed:  An animal which has been fed on grain in a feedlot. Also used to describe the carcase when it is being sold. Cattle sold under this description in NLRS market reports must be tendered with a statutory declaration confirming that they are from a registered feedlot.

Grassfed:  An animal which has been fed on pasture (grass). Also used to describe the carcase when it is being sold.

Grazier:  A farmer which raises livestock such as sheep or cattle.  Also known as a producer or pastoralist.

Grown heifer: A female showing no more than seven permanent incisor teeth. Can be up to 42 months. Usually having not produced a calf. (See also 'heifer').

Heavy mutton: Sheep weighing over 24kg cwt.

Heavy export: Lambs weighing over 26kg.

Heavy steer: A heavy steer is a grown steer between 500-600kg with a medium muscle score (c) and a fat score of 4.

Heavy trade: Lambs weighing between 20–22kg cwt, also known as a supermarket lamb.

Heifer:  A female bovine that has not produced a calf and is under 42 months of age. (See also 'grown heifer').

Herd:  A group of cattle or goats.

Hide:  The skin of the animal. A by-product on the animal post slaughter.

High: The top price at which a contract was traded during the trading period.

HGP: Hormone growth promotant, which is used to stimulate growth and improve feed conversion in cattle above what they would normally be able to do.

Hogget: Castrated male and female sheep with no 'ram like' characteristics and up to two permanent teeth.

HSCW: Hot standard carcase weight – used to describe the weight of an animal, particularly when the animal is sold over the hooks. (See 'carcase weight' and 'over the hooks').

Indicator: Gives a snapshot of the market to indicate which way it is moving. In the cattle market there is an indicator for trade cattle, feeder cattle, export cattle, as well as cows.

Intermuscular fat: Fat located between muscle fat; sometimes called seam fat.

Initial margin:  A small percentage of the trade value to be paid to the broker upon the purchase or sale of futures contracts. This will be the minimum balance of your trading account.

Intramuscular fat: Fat within a muscle; more commonly know as marbling. (See 'marbling').

Japan ox:  A grown steer, weighing in excess of 500kg lwt or weighing 320 to 400kg cwt. Such animals are predominantly destined for the Japanese market.

Killing floor:  Area of an abattoir where the live animal is slaughtered.

Lambs: Male and female lambs with no 'ram like' characteristics. Generally weaned, shorn with no permanent teeth and normally older than five months of age.

Last trading day: The final day during which trading may take place in a specified contract month.

Light mutton: Sheep weighing 0–18kg cwt.

Light rams: Rams weighing 0–26kgcwt.

Light lambs: Lambs weighing between 22–24kg cwt.

Light export: Lambs weighing between 22–24kg cwt.

Light trade: Lambs weighing between 16–18kg cwt.

Limit order:  An order to buy or sell futures that can be executed only at a specified price or better.

Live export: Stock that are bought for the purpose of a live export shipment.

Live exporter: A buyer who is looking to source stock bound for a live boat order.

Livestock: Live animals – includes cattle, sheep, goats.

Livestock agent: A livestock broker. (See also 'agent' and 'stock and station agent').

lwt: Liveweight – the weight of a live animal. Generally refers to price quotes (eg ¢/kg lwt) where the price for the animal is quoted per kilogram for the live animal.

Liveweight price:  The price of a live animal (per kilogram). (See 'carcase weight price' and 'liveweight').

LMO: Livestock market officer.

Longfed:  An animal that is grainfed, in a feedlot, for an extended period of time. Usually refers to cattle that are fed for over 200 days (up to 550 days) for the top Japanese markets. (See 'shortfed' and 'medium fed').

Lotfed:   An animal that is fed in a feedlot.

Lotfeeding:  The process of feeding cattle/sheep/lambs on grain in a feedlot. (See also 'feedlot', 'lotfed' and 'grainfed').

Low:  The lowest price at which a contract was traded during the trading period.
 

Marbling:  Refers to the intramuscular fat content of beef. Usually evaluated in the rib eye between the twelfth and thirteenth ribs. Strong marbling is highly valued by Japanese consumers.

Market order: An order to buy or sell futures to be executed immediately at the current market price.

Marking-to-Market: The practice of crediting or debiting a trading account based on the daily closing prices of the futures contracts that the account is long or short. (Also often used by companies to account for market movements in price of physical commodities).
 

MSA: Meat Standards Australia – a meat grading system designed in Australia. Used to describe the guaranteed eating quality of Australian beef.

Meatworks:  See 'abattoir'.

Medium mutton: Sheep weighing between 18– 24kg cwt.

Medium trade: Lambs weighing between 18– 20kg cwt.

Medium steer:  An indicator steer weighing between 400–500kg lwt or 260–300kg cwt. Such animals are predominantly destined for the Japanese and Korean markets. (See 'indicator').

Medium fed:  An animal that has been fed, in a feedlot, on grain for a period of time. Usually refers to cattle that are fed for 150 to 200 days, generally for the Japanese or Korean market.

MLA: Meat & Livestock Australia.

Muscle score: Used to describe the muscularity of cattle. Measured in a 15 point scale, however for reporting purposes, NLRS use the five distinct categories (see below).

Muscle score description
A: Very heavy
B: Heavy
C: Medium
D: Moderate
E: Light

New season lambs: Another term for young lambs.

NLIS: National Livestock Identification System.

NLRS: National Livestock Reporting Service.

NSM: Non-station mated – refers to when a cow or heifer has not been intentionally exposed to a bull. Mainly used in store market reports.

OTH: Over the hooks – refers to the marketing of cattle/sheep/lambs directly from the farm to an abattoir where a producer is paid for the value of the carcase based on a sliding grid. The skin is also evaluated for length and quality and is purchased by the processor. The seller generally pays for the animal's transport from the farm to the abattoir. The grazier generally gets paid within a 7 day to 14 period.

Operating: Another name for actively participating in the buying of stock in a saleyard.

Over-The-Counter (OTC):  A product tailored to meet the individual users’ requirements.

P8 site: An abbreviation for 'Position 8' for fat assessment on cattle. The P8 site is on the rump, forward of the tail head above the short ribs.

Pastoralist: A cattle or sheep farmer in northern and western regions of Australia. (See also 'grazier' or 'producer').

Pasture fed: Cattle that have grazed on pastures or crops rather than grains.

Physical market: Refers to the cash market where cattle are bought and sold. (See also 'saleyard' and 'direct sale').

PTIC: Pregnancy Tested in Calf – used to describe cows at a store or prime market.

PTNIC: Pregnancy tested not in calf.

Primal: Major component of carcase. For beef these include ribs, butts, chuck and rumps, and loins.

Prime: Stock that are said to be well finished enough to be ready for slaughter, ie stock that have adequate fat cover and general body shape and composition.

Prime sale:  A regular (often weekly) physical market auction. (See also 'saleyard' and 'physical market').

Processor:   An abattoir operator.

Processing: The process of taking a live animal, slaughtering it and then breaking down into saleable beef/sheepmeat.

Producer:  A sheep or cattle farmer. (See 'grazier' or 'pastoralist').
 

Quality: A descriptive word used for cattle referring to its condition, eg poor, plain, good. Is generally used in market reports when describing fat cover, muscularity etc.
 

Ram: Ram and castrated male sheep with 'ram like' characteristics.

Red tag: A tail tag on a cow at physical market (store or prime) that is in calf more than four months.

Restocker:  A producer or agent who purchases cattle/sheep/lambs and returns them to the farm.

Saleyard:  A physical auction market where buyers and sellers trade cattle/sheep/lambs. Physical and store markets are conducted at a saleyard.

Saleyard auction:  See 'saleyard'.

Second-cross (2X): The breed developed by mating a meat breed ram with a first-cross ewe.

Selling centres: Saleyards.

Shortfed:  An animal that has been fed on grain, in a feedlot, for a short period of time. Usually refers to cattle that are fed for 70–150 days generally for the domestic market.

Sire:  Father of a particular calf (see 'bull'). 

Slaughter: Usually anything purchased by a supermarket operator, exporter or wholesaler (any sheep sold to slaughter is sold to the trade, regardless of whether they trade weights or not).

Slaughter floor:  (See 'killing floor').

Sold to the trade: Stock that is sold to domestic and export processors.
 

Steer:  A castrated male bovine showing no secondary sex characteristics.

Stock and station agent: (See 'livestock agent').

Stocking density:  Refers to the number of cattle/sheep/lambs a farm or feedlot can or will run per area of land (eg DSE, cattle per hectare or per square kilometre).
 

Store condition: Lambs that are dry and lacking finish.

Store type drafts: Lambs of store description.

Store sheep: A physical auction where normally store sheep and lambs are bought and sold. Most of the stock offered are for breeding or future finishing.

Store sale:  A physical auction where normally cattle/sheep/lambs are bought and sold. Most of the stock offered are for breeding or future finishing.

Supermarket: Large domestic processors buying stock for domestic supermarkets like Coles and Woolworths.

Supplementary fed: Cattle that have been mainly grazed on pasture, but also have access to a feed bin containing grain or hay or both.

Supply:  Number of cattle/sheep/lambs penned at a physical market.

Supply and demand:  Used to describe the majority of market forces that impact on prices within in a physical market.

Supply area: The region within which the yarding has been drawn from. (See 'yarding').

sw: Shipped weight – refers to the weight of a shipment of beef.

Trade buyers: Buyers representing local butchers, wholesalers and other domestic processors.

Trade market: (See 'domestic market').

Trade steer:  A yearling steer weighing between 300–400kg lwt or between 170–230kg cwt. It is used as the indicator grade for cattle destined for the domestic market.

Temperate breed: Used to classify cattle that originate from the temperate regions. (See 'Bos Taurus').

Tropical breed: Used to classify cattle that originate from the tropical regions. (See 'Bos Indicus').

Unfinished: Lambs that are lacking fat cover and have an appearance which suggest they could use some more feeding.

Unjoined: Heifers and cows that have not been exposed to a bull in the past nine months.

USC: United States cents.

USD: United States dollars.

Useful: Slang term often used to describe a well presented and finished draft of particular grades of stock.

US cow:  An indicator cow grade, weighing between 400–520kg lwt or between 200–240kg cwt. Such animals are predominantly cull animals (cows no longer required for breeding or milking). Their meat is generally used to as manufactured beef, which primarily includes hamburger patties, in the US and also Australia.

US¢/lb CIF: United States cents per pound Cost, Insurance and Freight.

Vealer:  Female or castrated male with no evidence of eruption of permanent incisor teeth. Not weaned for more than seven days. (See 'weaner').

Volume:  The number of futures contracts traded (one side of each trade, only either buys or sells) during the trading period.
 

Weaner:  A young animal that has been weaned from its mother’s milk to live completely on pasture. (See 'vealer').

Weaning: Separating calves from their dams so that the offspring can no longer suckle.

Well conditioned: When a lamb or sheep has an adequate fat covering on the ribs and hips.

Well finished: Similar to well conditioned but more often used with cattle.

Wether: Castrated male sheep with no 'ram like' characteristics and with more than two permanent teeth.

Wet season:  The high rainfall season. In northern Australia this runs from October to April, while in southern Australia it runs from April to November. (See also 'dry season').

Yarding: Number of cattle offered for sale at a saleyard auction.

Yardings: Refers to the number of sheep and lambs penned at an auction sale.

Yearling:  Young animal, fully weaned without permanent incisor teeth. Animal does not show any secondary sex characteristics. Approximately 12 to 18 months of age.

Young cattle:  The vealer and yearling component of cattle. Includes both steers and heifers. 

Young lamb: Male and female lambs with no 'ram like' characteristics. Generally suckers, unshorn.