Slaughter dip likely in April

Taking a break: Public holidays generally see slaughter volumes drop in April. Photo by Julie Mercer

Smaller national yardings and reduced processing capacity can be expected this month due to a number of public holidays, with slaughter volumes set to drop to rates typical of the April period.

Seasonal variance

Seasonally, lower slaughter rates occur at this time of the year.

Given there are three four-day weeks coming up this month due to Good Friday, Easter Monday and Anzac Day, the impact of the shorter weeks is expected to be more pronounced than in the previous two years, when there have only been two shortened weeks due to Good Friday and Easter Monday.

As a result, smaller national yardings and less numbers going through the indicators are expected. The lower throughput of head reported through the indicators, especially the Eastern Young Cattle Indicator, can cause pricing volatility.

Even though processors rely mainly on over-the-hooks (OTH) orders these days, lower throughput in major saleyards can also create production difficulties for processors.

Processing capacity

During April, processors will be running at a lower capacity due to the number of public holidays in this period.

Getting employees to cover these shifts is difficult due to the wage rates and increased penalties required to employ people on public holiday shifts.

Processors also struggle to access animals during this period due to the freight network employees also taking leave.

Cattle slaughter

The April dip in slaughter has occurred between the 13th and 17th week of the year during the past two years, depending on when Easter has occurred.

Last year, the Easter dip resulted in slaughter falling 25 per cent in a week from 96,000 head to 72,000 head — which was the lowest weekly slaughter recorded all year.

This year, slaughter is expected to operate at 75 per cent for three weeks — a week longer than in 2020 and 2021.

This trend also exists, but is less pronounced, for sheep and lamb slaughter.

Sheep slaughter

The majority of heavy lambs and trade lambs are purchased by processors.

This means the absence of a major Monday sale such as Dubbo or Bendigo will lead to lower slaughter numbers and volatility in the indicator.

Light lambs do not have as large a proportion being sold to processors each week, therefore light lamb indicators will not be as volatile in the April period.

Courtesy: MLA