Beef Central’s popular weekly genetics review returns this week, hosted again by breeding and genetics consultant, Alastair Rayner*. The review, together with our weekly genetics email alert to Beef Central subscribers, will run each Tuesday evening, from now through to the end of the 2020 spring bull selling season in October….
Renewed confidence in the beef industry, underpinned by continued strength in cattle prices and improved seasonal conditions in many areas are some of the bright points as bull breeders approach the start of the spring sales period.
As noted in previous columns, the challenges of social distancing, travel restrictions and the general uncertainty surrounding Covid-19 this year have combined to impact the nature and operation of many bull sales held over the past few months.
While easing in movement restrictions suggests that most bull breeders may host a physical sale this spring, any relapse in COVID-19 infections could again see physical sales ruled-out, however.
Despite these challenges, vendors and buyers have adapted their approach to selling bulls. Many sales over the COVID-19 shutdown period have been held exclusively online, with a few offering a physical sale for restricted numbers of purchasers.
Here are some interesting AuctionsPlus statistics requested by Beef Central, to illustrate the recent trend.
The table below compares the 2018, 2019 and 2020 years for the extent of online activity for bull sales held during the March-May period.
As can be seen, there has been a dramatic increase in both the number of bulls listed online (either interfaced or online only via AuctionsPlus) this year, since COVID. And more than four times as many bulls were sold to online buyers during the three-month period this year, compared with 2019. Online purchases accounted for 30pc of sales in participating fixtures this year, compared with just 11pc last year.
The transition to online platforms for seedstock was seen by many in the industry as having the potential to increase buyer exposure. However, there were also some concerns that demand may have been muted as a result of buyers being unable to visually inspect and participate in the sale.
A look through the results of recent weeks suggests that moving online has not restricted buyer demand, and in fact there have been a number of fixtures that have recorded increases in sale averages in the year to date.
As an example, the recent Dubbo National Hereford Sale saw an average price of $8375 paid for bulls, which is up about 6pc on the same sale last year, and well up on the breed’s average from 2019 ($6253).
While one sale is not necessarily indicative of an overall lift in buyer confidence, looking over the results of Angus Australia’s sales for the 2020 year-to-date, they currently average $7498 (with some 3280 bulls sold nationally). That figure is a 21 percent increase on last year’s national average price for the breed.
Setting the scene
In setting the scene for the 2020 spring sale prospects, we’ve spoke to two stud stock agency identities – one in the north, and the other, the south – who have experienced decades of ebbs and flows in bull selling fortunes.
John Settree, NSW Stud Stock Manager for Nutrien Ag Solutions describes this year’s buyer market as confident and willing to invest in bulls.
“The year so far has far-and-away exceeded the expectations of buyers, vendors and agents,” Mr Settree said.
“There’s no doubt this year the number of cattle offered online has made cattle more reachable. Potential buyers can see and view information in photos and videos and bid from much further. There’s no doubt it puts more pressure on agents to know the cattle in catalogues and to be able to describe and answer buyers’ questions. But we’ve seen that paying off, in the confidence and willingness to bid on good cattle,” he said.
No dead wood
Confidence in description and independent assessment is a key factor in maintaining buyer support. However, Mr Settree felt many seedstock producers were making greater efforts to travel and visit other breeders for their own assessments, well ahead of sales.
The additional factor underpinning buyer confidence this year is the overall quality of bulls on offer. Mr Settree points out that after three years of drought, breeders have taken all underperforming cattle – those with less favorable performance records or phenotypes – out of programs much earlier.
“There’s no dead wood left now. If it wasn’t going to make the grade, then a drought plan was not to bring them through to 2020 as sale bulls. It means we now have the best line up of cattle across the board,” he said.
While there is some uncertainty regarding future issues around movements as a result of Covid-19, social distancing at sales, and the inclusion of online components will be a feature for the rest of 2020.
It may be likely that many sales will require pre-registration to manage social distancing and comply with number restrictions. This will place pressure on producers, particularly commercial producers to be more prepared and planned in their purchasing decisions.
For those moving to online sales for the first time as bull purchasers, John Settree’s advice is clear. “Speak to the vendor in advance. Ask an agent or an independent assessor for advice and to have as clear an understanding about the bulls of interest as possible before the sale,” he said.
In broader terms, a number of northern NSW breeders have reported sustained interest in bulls ahead of the spring selling season. Strong emphasis is being placed on high EBV accuracies, particularly in traits associated with fertility. Anecdotal evidence points to a greater portion of heifers being joined in 2020. This is likely to see bulls with more favorable performance records more in demand for commercial and seedstock herds.
Given the demand and interest in bulls so far, there is some thought among a range of breeders and agents that it will not be unreasonable for better than average bulls destined for commercial herds to average above $7500 in 2020.
With this in mind, combined with the potential physical distancing at sales, the suggestion by John Settree to be well planned and well budgeted ahead of this year’s sales is one many producers should consider.
Could sale averages lift by $2000?
Further north, Queensland seedstock agent Harvey Weyman-Jones from GDL is ‘sticking his neck out’ with a prediction about 2020 spring bull sale results in his region (Queensland and northern parts of NSW), where his company is engaged in more than 60 sales this spring.
“After a very tough year last year due to drought, I’m really looking forward to the 2020 selling season,” he said. “This time last year, I was very nervous about the conditions and the dry weather. But this year, drought is no longer a factor for many producers, with plenty of feed about. And the strong underlying beef market is adding momentum.”
“Another factor is that there just doesn’t seem to be as many young bulls around this year. Anything that was average or below average last year was cut. While there’s obviously also less mating-age cows around than there was three or four years ago, there’s less bulls, also,” Mr Weyman-Jones said.
“The ratio of those reductions (bulls to females) looks about right to me. I’m expecting demand this year to be strong, as a result of all this, and I’m predicting at this stage that bull prices will rise by $2000 on average, on last year.”
A lot of sales results were well back last year due to drought, so a $2000 increase this year would restore prices to ‘somewhere near’ where they sat in the two big years of 2017-18, Mr Weyman-Jones said.
While British and European breeds sold in the first half of spring sales last year were generally well back on the preceding two years, the Indicus sales later in the season were not impacted as much.
“That’s a testament to the fact that Bos Indicus cattle tend to be more popular in drought years,” he said. “Some of those northern cattlemen who had been buying Euro or British breed bulls for a few years went to back to Indicus, in a defensive move.”
Mr Weyman-Jones sees the buyer preference for polled bulls being bigger than ever this year.
“Every year, there are more poll bulls being bred, in breeds like Santa Gertrudis and Charolais. It means that the premiums for good poll bulls may diminish as supply meets demand over time, but equally, horned cattle, unless they are good ones, could gradually become harder to sell at premium prices.”
“The more Polls there are about, the more any buyer premium is likely to be diluted – but more breeders still want the polled cattle. Those people who are not focused on horn status will continue to pay well for those superior horned bulls, even if they are fewer in number.”
“Polled cattle used to have a reputation for having some problems with bone or pizzle, but every year that goes by, selection is seeing a lot better polled cattle than there used to be.”
Mr Weyman-Jones thinks a new era is emerging since COVID in terms of buyers’ willingness to bid for, and purchase bulls online.
“It’s grown dramatically this year. Their hand was forced, to some extent, but the fear has now gone out of buying bulls online, because they have had to do it due to COVID.”
“There will be more sales from now on which are a combination of physical sale, and some form of online bidding. If somebody want to do their homework, have a look at the bulls a few weeks before a sale and mark down some prospects, they are now comfortable to do the actual bidding online.”
“With all the technology that’s now about, buyers can use photos, video, scans, vet tests, Breedplan data, and bid with confidence.”
Mr Weyman-Jones said some vendors were looking at the use of temporary grandstand seating for some on-property sales this spring, to spread buyers further apart.
Interstate travel for ‘genuine reasons’ (ie attendance at a bull sale) was also becoming easier, and should represent no barrier for bull breeders crossing the NSW/Queensland border this year.
Alastair Rayner is the Principal of RaynerAg, an agricultural advisory service based in NSW. He regularly attends bull sales to support client purchases and undertakes pre sale selections and classifications. He can be contacted here or through his website www.raynerag.com.au