Flooding brings disruption for the red meat supply chain

In a mixed week, significant flooding across the east coast has impacted properties, processors and saleyards, however restocker demand in central and western Queensland remains strong.

Rainfall

In the week ending 2 March 2022, some areas between Bundaberg in Queensland and Port Macquarie in NSW received over 400mm of rainfall in seven days. While floodwaters in Brisbane are receding, they may rise again when high tide occurs.

While further rainfall events are expected for the remainder of the week, for areas that have not been flooded, the rainfall has been welcomed and is fuelling a new wave of restocker demand.

Transport

Flooding has caused some significant road closures in New South Wales and Queensland, impacting producers’ ability to send cattle to saleyards or processors. View QLD road closures or view NSW road closures for more information.

As of 3 March 2022, the following areas are affected by road closures: Cloncurry, Winton, Quilpie, Longreach, Dalby, Oakey, Toowoomba, Brisbane, Casino, Tenterfield, Dorrigo, Grafton, Lismore, Ballina and the Clarence River Catchment.

Impact on producers

Road closures have impacted producers’ ability to send cattle to saleyards or processors. It has also impacted summer crop production in some flood affected areas.

Restocker demand in central and western Queensland – where there were significant rainfall events but no flooding – has increased with the price for young cattle in Roma increasing 12c/kg on 1 March.

Impact on feedlots

MLA is not aware of any significant flood damage to feedlots at the time of writing. Grainfed animals which can’t be sent to processors due to the floods will have to be kept on feed longer than anticipated, as was the case in January when processors experienced COVID-19 related labour shortages. These animals will reach heavier weights, but there shouldn’t be any substantial impacts on feedlots other than a possible delay in some animals entering the feedlot system.

Impact on saleyards

Two saleyards have not conducted sales this week due to flooding: Toowoomba on Monday and Casino on Wednesday. There was a smaller sale in Dalby, which could partly be attributed to flooding related road closures in the region. Dalby yardings were 68% smaller than last week.

Some saleyards may halt sales at late notice due to flooding. However, at present, no further saleyards are expected to close.

Overall, smaller cattle yardings are expected this week.

Impact on processors

National cattle capacity will be impacted this week. According to early reports, some processing plants are continuing unimpeded, while others will be closed for a period of time. The main reasons for processing plants temporary closure include:

• flood damage
• an inability to source animals due to road closures
• loss of power
• difficulties in sourcing staff with many staff impacted by road closures.

NLRS Slaughter Report

This week’s slaughter report, which reports on last week’s numbers, has been delayed. The impact of the current floods on national cattle slaughter will be reflected in next week’s NLRS Slaughter Report.

Indicators

The Eastern Young Cattle Indicator (EYCI) fell 18c/kg yesterday due to smaller yardings in Dalby, and Casino not conducting a sale due to the floods. Casino is the saleyard recording the highest young cattle prices. With prices above $13 at 1,316c/kg, this is a 185c/kg premium to the EYCI. Consequently, the removal of Casino from the EYCI this week is behind the EYCI’s fall.

Smaller yardings this week and next week may cause some volatility in the EYCI.