3R Livestock

Welcome to the 3R Livestock Program

NEVER COMPROMISE - these aren't just words, its what we believe in. We never compromise in our pursuit of breeding the perfect animal. We strive to produce cattle that will lead the global beef industry into the future. Our cattle are bred from proven, high performance genetics and we raise them in an environment that tests their worth. We are focused on consumer demands and recognise the ultimate outcome is supplying an incredible natural product that enriches lives. Every dollar into our industry comes from a consumer - we strive to breed what they demand most.

The 3R brand is a seal of integrity - it represents a level of quality you can trust and a comfort in knowing it is earned - not gifted. We believe in hard work, and ensuring you receive unrivaled value, expertise and quality in every measure. We bred bulls for the Cattleman.

We have a long term vision and operate in a sustainable way for the future. Our industry must be socially responsible, environmentally sound and economically viable - these three factors will ensure opportunity for future generations. To achieve this our cattle must be efficient in the production of quality beef. The world is changing rapidly - we are building a future.

We value strong relationships. We take a genuine interest in you and have a commitment to your success. Let 3R join you in your pursuit of perfection - together we can achieve greatness.

Our best,

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The 3R Weekly Livestock Report

Weekly Cattle Market Update - 15 March 2019
This week the prospect of rain in the forecast was enough to subdue the recent downward trend in the EYCI. The modest rise of $7.75c signified only the second week in 2019 to record a weekly net gain, a strong indication of the pain 2019 has held to date. At the close of the week the EYCI sat at $393c, without question the result of the forecast rain event will dictate where to from here.
The majority of selling centres in NSW & QLD saw yardings well down on last week, commonly in the range of 15-25%. Perhaps this indicates a change in mindset to feeding cattle at the current prices or holding out for a seasonal break.
Mecardo published some interesting statistics on Feedlot numbers. Cattle on feed remains above 1.1M Head however many of the groundswell of cattle that entered feedlots in mid to late 2018 are now headed to processing and demand for replacements should provide some support to feeder prices in the coming months.
Processing numbers remain well above prior year levels. Comparing to this week to last year more than 30,000 (+21%) additional cattle were processed. Eastern state female cattle slaughter remains above 51% indicating the herd reduction is continuing in 5th gear. OTH prices have broadly reduced sharply on availability of supply however International markets remain firm and the potential for quick price recovery is evident.
Data acknowledgement - MLA, Mecardo Analysis

Country Focus - USA
This week the USDA released its 2019 Cattle Inventory report detailing a total USA herd of 94.76M head. This number was 0.5% higher than 2018 and signified the herd rebuild was now maturing and further increases likely to be minimal.
The structure of the USA production is heavily orientated towards the production of grain fed beef. This industry structure has been part born by necessity of feeding cattle through harsh winter months and supported by a large domestic grain industry. After a decade of drought spanning the mid 2000’s to the mid 2010’s a genuine improvement in conditions fuelled one of the greatest herd rebuilds in history. Coinciding with improved conditions USA grain production hit record highs outpacing global demand for feedstocks, particularly corn. This surplus was retained onshore and found utilisation from Feedlotters. Competition for cattle between Feeders (fuelled by cheap grain) and Restockers (looking to rebuild their herds) drove the price of USA cattle to unprecedented levels.
The rebuilt herd peaked in 2018 and subsequently 2018/19 has witnessed high levels of production (645,000 additional calves born in 2018). In late 2018 Cattle of Feed peaked at an all time record as did overall USA Beef Production. As expected during a period of high prices Consumers were also subject to rising prices at the retail counter and beef consumption trended down. The current levels of production are exceeding domestic demand and therefore the USA is seeking to place beef into the world’s major grainfed markets, particularly Japan, Korea & the EU. Trade remains a foremost subject of the Trump Administration and collectively USA Beef Producers are eager to see more beef flow offshore.
The Japanese taste for high quality grain fed beef has long been established. Since the 1970’s Australia has held the position as supplier of choice and the relationship between the two countries has remained strong. In January 2015 the JAEPA Trade Agreement between the countries was ratified therefore beginning the path towards tariff reductions of 50%. This agreement complimented Australia’s preferred supplier recognition with economic advantage – an enviable position. The JAEPA was replaced by the broader CPTPP (TPP excluding USA – President Trump removed the USA early in his presidency) which came into force in December 2018. CPTPP continued Australia on the path to a final tariff of 9% within 15 years (previously 19.5% final target).
So the situation continues to emerge whereby Australia is widening the tariff gap between it’s main competitor, the USA, pegged at 38.5% with no trade deal in effect. President Trump has acknowledged the need to get USA beef offshore but all the while the demand for fed cattle continues to find headwinds and frustration amongst America’s cattlemen grows.
As cattle are fed longer the additional fat generated is increasing the demand for Australia’s lean meat which is mixed at a ratio to produce burger patties for the hamburger trade. 90CL is an influential market in underpinning Australia’s livestock prices.
The current circumstances in Australia are reminiscent of those experienced by the USA throughout the past decade. Whilst serious drought remains the herd decline will continue, however upon rain the price of beef will rise sharply and consumption likely decline. The effect of falling consumption does not impact live cattle prices in the short term however as the herd rebuild nears completion winning back consumers (domestic & foreign) is challenging but critical to sustaining cattle prices in the medium – longer term.
This information is published for interest purposes only and should not be relied upon.

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Data Acknowledgement -
Mecardo Expert Market Analysis
Subscription via mecardo.com.au
Meat and Livestock Australia www.mla.com.au
United States Dept. of Agriculture
www.usda.gov
Drovers
www.drovers.com
AgDay
www.agday.com