Market Morsel: A horror start

Livestock | 3rd February 2021 | By Matt Dalgleish

Market Morsel

This week saw the beef processor Greenhams close part of their plant in Tongala and in December a NSW processor closed for eight months as of the start of 2021. Taking a look at the TEM beef processor margin model for the start of the season it is pretty clear that it has been a shocker of a beginning to the year.

The January 2021 margin comes in at a loss of $310 per head, according to the theoretical model. This is the lowest recorded monthly margin since records began in early 2000. It’s never a good thing for a supply chain to have a key participant suffering financially and it makes it difficult to see how finished cattle prices can continue to push higher during 2021.

Note – The TEM processor margin model can be adjusted retrospectively as new input data comes to light. The January 2021 figures include co-product pricing and some export pricing that is yet to be updated fully for the month of January so this figure is likely to be adjusted slightly in future analysis releases.

Tags

  • Beef
  • Cattle
  • Processing
  • Margins