Market Morsel: Beef processor pain

Livestock | 5th November 2020 | By Matt Dalgleish

Market Morsel

A combination of continued high domestic cattle prices and easing offshore beef prices have taken their toll on beef processor margins for October with the Episode3 representative beef processor margin model slipping to the largest negative result on record.

  • October beef processor margins slide to a loss per head of animal processed of $294, the previous largest monthly loss (prior to the current season) was $246 in September 2016.
  • The annual average margin for 2020 now sits at a loss of $118, comparable to the annual average loss of $129 and $121 achieved during the 2016 and 2017 seasons, respectively.

Earlier in the week JBS Townsville reported via Beef Central that they would be closing their operation for the 2020 season. It’s not unsurprising to see some plants shut over the Xmas period, but given the difficult trading environment at the moment it makes sense to close for summer earlier than usual.

Tags

  • Beef
  • Cattle
  • Processing
  • Margins