Chris Howie

Uninformed, non-agricultural media are chasing headlined stories because drama sells advertising and are creating long term damage. Some of the reporting is not based on any practical experience or even fundamental knowledge of the story. It is a pity we cannot get metropolitan media to harness this power to help elevate the importance of Agriculture to our city cousins, or is that a bridge too far?

My examples of media hype disrupting the livestock markets – COVID, FMD / Lumpy skin panic sell off collapsing the market, BoM super El Nino coming destroying values in 2023. And now we are all trying to become bush economists and panicking about the US tariffs. None of which we can change no matter how much we talk about it. In turn there is also some agricultural commentary highlighting a classroom view of happenings without any practical experience or balance within the articles, also not contributing in a positive way.

Positivity, all boats rise on the tide and our tide is only a 10% tariff on 30% of our beef production. Compared to other countries I think we have had a win, Do the sums! The tariff impact is a poofteenth of bugger all over 100%. Get on with life and target feeding for weight gain because the supply hole is here.

Forward contracts. Well done to the processors that have put these into the market. Not only does it provide an indication of demand it also helps move the price risk from producer to the processor. With numbers of finished stock normally declining at this time of year and store stock still available because of the southern dry these contracts provide confidence to invest in feeding with an end result locked in. Lamb, beef, cow and mutton forwards creates good business allowing you to lock in a margin versus trying to pick the market. As Andrew Whan, Miller Whan and John agency , Mt Gambier commented “Its dry but values are holding which is far better than previous dry years”

Marketing advice. With several non-normal events impacting end user demand as well as supply, your marketing advice is more important than ever. The variation of price across similar specifications of livestock has a range well outside the norm. At present, for producers doing their own marketing it would be very easy to miss by 30 – 40 cents even though you have been told it is a good price. Irrespective of the market type – feeders, old ewes or livestock aligned to grass fed processor programs. With supply shortening it is easy for producers with a limited relationship network becoming too reliant on once source of the truth. Old war story, I once received a kill sheet on some pigs that were 45 cents behind what I had contracted for my clients. When I spoke to the vendor he said “I get looked after and don’t need to pay commission”. Even paying the commission he would have been $6.75 a head better off. A simple phone call never hurts.

Cattle

Feeder prices lifted on the northern rain event as numbers in the south decline rapidly. Again the drivers impacting supply immediately align to price as feedlots look to secure numbers. Angus steers are relatively stable between $3.90 – $4.10 however there are some quotes a bit higher on larger lines with known genetics. The XB and coloured steers are where the variance really stands out with secondary types at $3.50 – $3.80 yet quality lines close to Angus prices.

As an aside for those that wonder how a feedlot works hopefully this is a simple explanation. If they have 30,000 on feed this requires purchases of between 1700 – 2000 per week. If that number is not secured it creates a hole 120 – 150 days later when they are ready for processing. Not ideal when locked into a supply contract.

Cows are really gaining ground with saleyard price trend on the rise. With the 90cl price (mince meat) solid above $10/kg and the low Aussie dollar combined with shortening supply, prices have responded rapidly. 4 weeks ago a cow worth $3.00 is now trading at $3.45 – $3.55. Hooks prices are relatively stable at $6.30 but I expect they will strengthen in line with the normal price trend for this time of year in the South. The current prices have seen a surge of cows to the yards with Wagga, Barnawartha and Mortlake show large cow yarding’s this week with a softening of 10 – 20 cents. This is a classic example of the 2 week cycle – week 1 price up draws numbers, week 2 price softens, week 3 numbers reduce price rebounds. In short if you have aged or dry cows in your program over the next 3 months don’t be scared to take the time to cash them in and buy some younger models.

Weaner sales roll on. The NSW and Tasmanian weaner sales are in full swing with plenty on offer. After 200mm of rain 2 key sales in the New England were rescheduled. Glen Innes Premier Angus Weaner Sale to Wednesday 9^th April – 12pm & Inverell All Breeds Weaner Sale scheduled for Monday 14^th April – 10am. Both of these sales show the years of investment in quality bulls by the New England cattlemen and are very well worth attending.

The southern centres are still yarding above the norm as the dry continues. Andrew Whan, Principal at Miller Whan and John from Mt Gambier said the season has their yarding for Friday the 11^th at 3500 quality cattle and still growing. Any support into the southern centres is well received and from experience when seasons turn around is reciprocated.

No different to January it is important to look at what sales are on and perhaps have an order in a couple of places on the same day. Last week we saw best 300 – 330kg calves at one centre making $4.30 – $4.60 with another centre not far away making $3.80 – $4.20. Most yarding’s the under 250kg steers are making around $5.00. I’m trying to not sound like a scratched record but quality heifers are still worth the coin with those purchased around $1000 providing a great margin upside.

Live export. New kids on the block in Australia, NZ Based BeefGen have released an Angus Heifer order for delivery in May. Normal China protocols and sorry, no blue tongue zone cattle. 220kg + $1050. For any breeders in the South this sounds like a good avenue to investigate through your agent.

Angus Australia World Forum in Tamworth 3^rd /4^th May and Brisbane 7^TH/8^th May is approaching quickly. Irrespective of your preferred breed the line up of speakers and events aligned to the beef industry is second to none. Whether it be genetics, technology, agency, feedlots, processors or simple networking these events add real benefit to the livestock industry and take an enormous amount of planning. Get in early to avoid disappointment.

Sheep

Sometimes big money does more damage than good. It causes decisions to be made on price alone and distorts the value proposition by using a small spot in time that has no relationship to your sale window.

Last week we saw a significant lift in the mutton price. A perfect storm appeared in the market which saw all processors with an open book to buy at the same time. A supply hole on numbers in the south, big rains stopping everything in Southern Queensland and the New England, WA supply shortening quickly, a PNG mutton order moving from one processor to another and a lift in Chinese demand with another order appearing. Finally, the need to fill containers and have them on the water before the Easter disruption all met to cause this big lift.  I am basing this on what I have heard so if I’m wrong refer to the first paragraph for assistance.

Speaking to Isaac Hill, Wagga Regional Livestock heavy ewes that made $180 the week before hit $320 and another run of mutton saw the tops sold early for $180 and the seconds sold 4 hours later make $230. As with many others I agree this is a blip in the timeline – sounds like a quote from Dr Who? Well done to those that fluked the win, but I expect the mutton prices will settle this week as already seen at Bendigo. Forward pricing has appeared for heavy mutton in the $5.00 – $5.50 slot which was a positive shift of nearly $1.00 per kg on the previous grid offering.

Heavy lamb continues to be the target market and leading into Easter supermarkets will make sure they have their supply in hand well in advance. Feedlots are starting to provide supply from the lambs purchased in February. Several forward contracts were well subscribed with 1 processor releasing its first forward ever. I expect we will see another series released shortly with May and June pricing.  Looking at the current rates hovering $7.60 to $8.60 depending on breed and type plus a couple of conversations I would expect to see high $8 starting to appear after ANZAC.

Scanned in lamb ewes are still excellent value and worth a shot. SA, Victoria and WA have significant numbers available, and it is a pity to see them sold as mutton. Clint Wardle, Livestock Manager for Westcoast Rural in WA has another sale booked on Auction Plus set for 17^th April with 4000 SIL ewes. As always it is important to avoid minimum pregnancy windows for transport, don’t create a problem that could have been avoided.

Events

Man from Snowy River festival. Speaking to Justin Costello, Costello Rural at Corryong this event is in its 30^th year with a constant flow of caravans heading into the mountains. Even though the season is difficult and paddocks are bare the story of Old Regrets colt jumping the fence rings true with many of us. A few years ago at Tom Groggin Station I saw a young fella called Luke Turnbull training for the Man from Snowy River challenge. Horses and I don’t get on but to see this lad at a full gallop swing the whip and turn his training horses was a moment I won’t forget. Maybe a bucket list thing for a few of you.

The Easter and ANZAC alignment have created 2 short weeks and an opportunity for a cheap holiday break and supply to catch up for a period. We have had 2000 years to plan for Easter and 110 years for ANZAC day so I don’t think anyone should be surprised but we still carry on about the disruption as though it has never happened before. As Australians we should take the time to look at what we have because of both of these remembrances. Pause and reflect instead of rushing around like a blowfly in the window, it will do you good.

Opportunity

• Surprise – light heifers, get on board
• SIL ewes
• Trade older cows/ ewes and buy young in
• Stop worrying about shit you can’t change, work on what you can change
• Good marketing advice and networking does pay off
• Take some time to speak to a mate in a dry or flooded area
• Have a chat to someone in the city about the positive parts of farming
• Offer your time to help the AFL train umpires – even if your sight is failing

Chris Howie is a regular Beef Central and Sheep Central market columnist and the CEO of RMA.