Word of warning. With big rains, lots of debris, manure and potentially carcases are getting washed into dams. After the WA rains a few years back, we saw some significant salmonella outbreaks in lambs and weaner cattle from which they do not recover. Flooding in Australia poses a high risk of salmonellosis in livestock due to contamination of water and pasture with manure, leading to increased bacterial prevalence. Salmonella can survive for months in flooded environments, causing severe infection (enteritis, diarrhoea, abortion) in stressed, water-exposed or weakened animals. It maybe a bridge too far but moving stock, especially lambs and weaners to clean water is definitely an option worth considering if you can.
Chris Howie.
Meat theft. I read with concern that one supermarket estimates it is losing 13 percent of the scotch fillet it puts on the shelf. Makes the young checkout staff at $35 an hour appear like cheap security to me and closes the bolt holes for the thieves. I must say my concern disappeared quickly when I saw the major supermarket financial results posted. My mathematics has always been pretty basic but how does a 4.5 percent increase in sales generate a 14.5 percent increase in bottom line profit? I do like the old Western movies solution though for livestock (meat) thieves, perhaps we need more Rooster Cogburns and a supply of cheap rope in Australia.
Feedlot value. With feedlots changing hands at a rate of knots many are looking at the cost per unit area and rubbing their head. I’m looking at the supply continuity benefits for those buying them. AMG buying Killara is smart business and integrates into their backgrounding and processing operation perfectly. No different to when Teys purchased Charlton, TFI with Southern Cross or any number of processors across Australia.
The sad bit for me as an old agent is feedlots used to be a strategic benefit for an agency – whether owning them or running a custom feeding arrangement – creating a point of difference for the agents within the business and their clients. The required ROI was offset by the commission received and created many successful opportunities.
Cattle
The PTIC heifers and cows continue to be undervalued with the NSW season struggling without rain. Are they an opportunity? Definitely and even in a bit of a dry time selling down old cows and replacing with heifers is smart business. But I’ve said that before.
Feeders. What’s the job going to do many are asking? It seems good runs are creating interest with the EU models leading the charge. $5.00-$5.20 seems to be the pivot point at present however I am watching the coloured rates get closer to the Angus rates every day. Feeder heifers are also soaking up some slack as we notice their rates lifting in the background. Most feedlots are trying to maintain an inventory as close to full as possible. Forward kill prices are not yet reflecting rates paid for feeders and backgrounders which indicates something may need to move but I suggest not until after Easter.
Weaner sales. The Tasmanian teams at Nutrien, Elders and AWN are cranking into their weaner sales at Powranna. These cattle perform very well on the mainland but you do need to get your ducks in a row early regarding transport across Bass Straight.
The Mountain calf sales really shot the lights out. Morgan Davies, Branch manager, Elders Bairnsdale and trainer of Critters said the mountain calves were a bit lighter in weight this year with 8,000 yarded. However, that didn’t deter the regular Hereford buyers setting the rates at $5.20 to $6.00 on steers and $4.30 – $4.80 on heifers. The Angus offering made the same rate per kilo with several significant orders not getting a start. Local support from the Gippsland was the firepower with 30 to 120mm of rain putting some extra kero in the tank.
For those in the market, there is plenty of opportunity with the run of Victorian and NSW southern tableland sales at Yea, Barnawartha, Yass, Cooma, Carcoar being complimented by Inverell pulling the trigger with 6000 next Thursday.
Shad Bailey, Say and Co, Inverell said the dry had set in and it is a case of supporting the producers with a sale three weeks earlier than normal. From experience the cattle at Inverell always weigh well at the other end of the trade and are worth a shot.
Pastoral rains may be the hidden sleeper for PTIC and cows and calves. The rains across Northern SA, Cameron’s Corner and Western NSW at this time of the year will see an enormous amount of herbage appear. One rain is a good creek run but two significant events 10 days apart provides feed before it gets cold plus two years of water. I remember a rain like this in 1989 at Wilmington, four months later we could not find the cattle in the marshmallow which stood six feet tall.
Speaking to Michael Spencer, Allied Beef Marketing, he said road access to the NT was through the Kimberley only with no sign of it drying anytime soon. Both rail and main arterial roads have been impacted in SA with the Broken Hill road only just reopening.
Sheep and lambs
WOOL. The wool industry continues to impress. Speaking to Jenni Turner NSW/VIC Area Wool Manager Quality Wool, she noted another solid performance with a 50,701 bale offering last week and the EMI moving up another 23 c to 1716. Competition from all the local traders chasing quality low VM merino & crossbred fleece was good. Crossbred volumes were only slightly behind the merinos with the lift in crossbred prices over the past 6 months makes it a very attractive proposition to get it into sale.
The star of the week were the carding wools rising 71 cents due to greater widespread demand appearing from recently dormant countries Korea, Italy and the UK which saw Chinese orders needing to adjust limits. Reactivation of these orders indicates an increased demand for knitwear in the woollen sector which is welcome news to our surviving local processors.
This week had a decent size catalogue of 38,246 bales scheduled. Exporters on the Quality Wool show floor reported happy clients with business done post sale and a general consensus of a firming market.
Mulesing status declarations – breeders, traders & finishers, don’t forget to fully declare the mulesing status on lamb & prem type wools. A non mulesed certificate can significantly increase the auction price in this range with a number of various specification orders aligned to non mulesed wool.
Lambs. We saw an influx of additional kill lambs during February because stubbles and pasture maintained excellent energy levels with limited rain impact. This saw a brief additional supply which softened hook rates for 2 or 3 weeks. However, rain and shortening numbers has quickly seen prices rebound to $11 – $12.50 per kilo plus an improved skin price in the sale yards. Mutton has also followed trend and makes some ewes sold in January and early February breeder sales look very buyable now as trades or lamb factories plus the wool clip.
The demand for store lambs rolls on and seems to have broken through the period of supply that would normally see prices ease. Many areas before recent rain were in sell mode due to lack of surface water. Hower enquiry is surging for store merino lambs and recent rains in the pastoral country will see nearly all but the oldest ewes kept to restock. The trading opportunities at this time of year to shear and fatten merinos is providing a very good return on investment. For the breeders the merino wool and fat lamb combo is significantly better than many other per hectare returns. Again, the mixed farming models shines more often than not.
The lamb job has pushed outside of the very small February sell off window that normally allows prices to settle back before the Autumn / Winter lift. With rain impacting numbers Wagga reported $473 last week for the best super heavy lambs and a dramatic drop in numbers this week.
One chat in my travels did highlight a large equity investment entity buying significant numbers of stores over the past 2 months which held the market higher than expected in the larger lamb supply centres. It also saw the same group needing to buy killable lambs to meet their commitments because contracted lambs were not ready. For the producers selling this is a bonus however it becomes a double edge sword for store lamb buyers as it lifted the market prematurely and has not allowed processors the ability to reset for the winter.
I caught up with the agents at the Forbes sheep and lamb market last week in a yarding of about 30,000. I think I have said this before, but Forbes is often overlooked as a destination sale centre in market reports. I will endorse the consistent quality of lambs presented is as good as anywhere with breeding, finish and weight. The floods a few years back have seen the lucerne flats still struggling with several needing to be resown more than once and some traders back on numbers. The normal heavy lambs supply in this area is thinning very quickly and looks to cut out at least 4 weeks early from a couple of conversations. A shining light is the consignments from as far as Northern Queensland targeting Forbes because of the consistency of prices and the large spelling paddocks showing the benefits of resting and presenting sheep and lambs.
Keep an eye on the clock. Store lambs continue to rebound on the back of expected demand during winter with some heavies up to $260 being purchased to turn into super heavies. It is important to invest in creating weight at this time of the year. Much the same as 2021 / 2022 I would suggest being careful on the supply / demand changeover in July / August if we get any type of season for lambs. Once numbers appear those invested at the back end with expensive lambs may very quickly be exposed to a market reset and a significant dollar tear up unless you have a signed contract…
AI evolution – for those that don’t know what AI is, it means artificial intelligence. A bit like me after 5 or 6 creamy pints of Guinness. Does it save time when putting a document together? Definitely, but you must read it because sometimes it makes stuff up, there’s the Guinness again!! Do I use AI for my articles? Definitely not, other than Creamy Pints. Should we be concerned about AI? Absolutely, if we have watch the old 80’s movie Terminator, AI is Skynet. Can governments control AI? Not a chance, when they can’t even work out simple economic policies that we learnt as kids playing Monopoly – never sell your utilities, power and water should belong to the state.
Opportunities
- Cows and Calves
- PTIC females
- Merinos with a start in the skin
- Spend the money and carry your stock into May.
- People still need to eat even when at war.
- Use your feed – buy or sell the agistment.
- Ring your mate and meet them at the pub for a beer or a mojito
Chris Howie is a regular Beef Central and Sheep Central market columnist and the CEO of RMA.
Meat theft from supermarkets is very significant. Stories of restaurants running on meat stolen from supermarkets are rife.
Staff in store have instructions to not intervene if they see food being stolen out of concern for their safety.