The livestock industry has reached a difficult time and place with many abattoirs unable to source enough competent staff to effectively slaughter the stock that is starting to bank up.
This problem appears to be accentuated and particularly damaging to the cattle lot fed sector.
Discussion in recent days around the saleyards has focused on the number of cattle on feed that are ready to come out, but were turned back over the last two weeks due to the lack of capacity to handle same.
This in turn produces more than one problem for the feedlot.
Firstly, with the high price of cattle, combined with the fixed costs, the margins at best are tight. Also, the extra grain and handling increases the overall costs thus further reducing the prospects of a reasonable profit.
The extra time on feed ensure the cattle gain weight and this may see the cattle land outside their original specs, thus maybe causing a further loss to the feedlotter.
Some of the numbers which were discussed were quite staggering if they happen to be true.
It was suggested one major feedlot had to return 9000 head back on to feed and it was also mentioned that a Victorian yard has 3500 head that were returned to feed.
One NSW abattoir was thought to be processing 400 head a day less than their normal tally for this time of the year. This scenario was supposedly happening over the last two-to-three weeks and maybe these examples if correct are only the tip of the iceberg.
This situation will only be exacerbated unless health authorities and/or governments find a solution that enables these essential workers to return on a full-time basis.
Another major problem surely is one of cash flow.
At no time was this mentioned in the above discussions but it must be taken into account.
One would think that with the price of cattle at their current level and other high priced fixed charges, lines of credit would be fully extended. Some finished cattle may need to be unloaded before fresh cattle are purchased.
If this situation continues we may see feedlots reducing their price on offer or, in the worst case, not indicating any price at all.
Markets during the week were in the main quoted as dearer for restocker and backgrounding cattle with all other lines selling to an irregular trend, mostly showing an easing tendency.