Yet another increase in demand for live cattle shipping capacity. Indonesia has now agreed to take heavier cattle (450kg+) and they take them only from Northern Australia (refer Beef Central article). China has started taking heavy cattle from Southern Australia (Bluetongue-free zone) and the ships take longer to travel to China than Indonesia. Great way for Australia's largest customers to not compete (and place downward pressure on cattle prices).
Fatter cattle on longer distances = more shipping space requirement = greater capacity utilisation = stronger pricing power for the shippers.
AND heavier cattle are currently trading at a substantial discount to younger, lightweight, feeder cattle - $2.90 per Kg live weight for heavy steers v. $3.75 per Kg for live export feeder steers (ex. Darwin) - 23% spread.
http://www.beefcentral.com/live-exp...e-in-livex-weights-to-450kg-shipment-average/
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