Live Export

Wellard announces forward contracts for bull calves

Beef Central, 11/04/2016

Wellard Rural Exports, Australia’s largest live cattle exporter, has announced it is offering forward contracts “at a price premium” to producers of European and British breed cattle to keep their bull calves entire.

Wellard said it is sourcing large numbers of bull calves to meet strong consumer demand for leaner bull meat in the Middle East and Europe.

“Buyers in those countries are prepared to pay a significant premium to reward producers who are prepared to leave their bulls uncastrated,” said Wellard Chief Operating Officer Scot Braithwaite.

The company says bull orders in both northern and Western Australia already attract a 20-30c/kg premium over steers as bulls are keenly sought after in Indonesia, Vietnam, the Middle East and Europe.

Mr Braithwaite said the demand for bull calves was creating a market situation that benefitted producers in a number of ways: in addition to the price premium now available, bull calves had higher growth rates and average daily gains compared to steer calves.

“By way of example, a 265 kilogram steer at 300c/kg will return producers $795 a head. A faster growing 300kg bull at 325c/kg will return $975 a head,” Mr Braithwaite said.

Wellard says it will buy and take delivery of bulls before they reach 300 kilograms liveweight to in order to counter the concerns producers may have with having to manage more active entire cattle and to avoid potential discounts from local processors if their bulls aren’t bought for live export.

Wellard is asking producers to sign forward contracts after birth so numbers can be assured.

It says this removes both the price and delivery-risk. Both set-priced contracts and market price plus a premium (MP + $$) contracts will be offered by Wellard.

“We are happy to talk to agents and producers about when they would be looking to turn off their bull calves and which type of forward contract has the most appeal to them,” Mr Braithwaite said.

“Some producers will be happy to lock in a price they know is profitable, regardless of whether the saleyard price moves up or down. Other producers want exposure to future price rises in the cattle price, and we can accommodate that as well.”

“More northern cattle producers are choosing to keep their male calves as bulls, turn them off earlier and as a result can run more cattle as opposed to keeping and growing out their steers,” Mr Braithwaite said.

“It also removes some of the seasonal risk as getting a bull calf to 250-300kg is more straightforward in a difficult season than trying to get a bullock to 600kg plus over a longer timeframe.”

Source: Wellard Rural Exports – for further information visit the Wellard website here

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