Markets

Chris Howie: Who took the opportunity to buy heifers?

Chris Howie 07/08/2024

Chris Howie

Back to normal.  I am pretty comfortable that the market fluctuations we are seeing are a return to normal season supply and demand trends.

As we have seen over the years the winter supply shortens and the price goes up. Because many specifications were well under the comparable export meat prices the first lift was substantial across all species. In turn this saw a rush of numbers to catch the lift and the result was the prices backed off.

My thoughts are this has brought the market back to a solid floor price which we missed over the last two seasons. This may well be the last hoorah for numbers though. We are already seeing heavy lambs and heavy feeders being eagerly sought. The Autumn was bloody hard in the South and many of these types were sold in March and April at lighter weights.

My forecast is we have a large supply hole appearing until mid-September. It seems many in the North with good crop and rains are aiming at taking lambs and feeders through to heavy weights which is adding another dynamic and reducing available sale stock. I stick to my earlier tips – don’t get greedy, keep taking the tops off and grab the money on the way up. Learn from last year.

Cattle 

I wonder who took the opportunity to buy heifers when this was suggested? The return so far is extraordinary and that’s just on price lift and limited early weight gains. Whether trading or replacement breeders the team that took the shot have certainly pulled the right lever.

Feeder supply has the phone ringing with prices on best blacks common at $4.20 and some unconfirmed quotes considerably higher for performance feeders with IMF history. I saw 400 kg heifers make $3.92 in Mt Gambier last week with continued enquiry coming about who might have numbers. The Alice Springs show sale was again the pre cursor to a Northern lift with prices paid now common place with crossy flatbacks quoting in the high $3 ranges.

EU feeder supply is tightening with many already sold at lighter weights because of the season. In turn this is seeing some specialist EU feeders starting to buy non-EU. A VERY important development for any supplying cattle to EU feedlots is flagged for the 30th December 2024. DAFF have posted the new compliance requirements and changes initiated by the EU around Deforestation, Palm oil and Rumensin and momensin. How this will be managed is part of a wider Cattle industry discussion based on geolocating where cattle have been during their lifetime. Breeders will have an easier line of sight however agents and backgrounders will need to keep an eye on this as it develops. Taking the time to understand this will pay off in the long run.

The US 90cl price (mince meat) is still leading the charge and dragging the rest behind it. Numbers in southern sale yards have fallen dramatically pushing southern processors north. With best cows ranging between $3.00 & $3.65 it is highly probably this limited supply will see prices continue to build. Ron Rutledge, Nutrien Vic / Riv said Tom Carrolls transit depot at Deniliquin is bulging at the seams with cattle being rested on their trip south. The advent of spelling yards all over Australia like Tom’s have been a real bonus when moving livestock. It may seem like an additional cost but the animal welfare and performance outcomes once home pay off in spades.

The bull sale cycle is starting to swing again. Back in the 90’s and early 2000’s multi vendor bull sales were big business. I remember the Glen Innes Hereford sale penning 240 bulls followed the next day by 120 Poll Herefords. Many of these studs then started to have on property sales and the multi vendor trend started to wane.  Speaking to Scott Myers from H Francis and Co, Wagga Wagga it seems the Multi vendor sales are starting to reappear with many new studs using this format as an entry point as happened in the past. The 4th Year of the Winter All Breed Sale, Wagga Wagga is scheduled for the 10th of August at the Wagga sale complex. 26 vendors and 6 breeds are in the sale with an offering of Bulls, Females, Embryos and semen with a live Auction and interfaced with Auctions Plus. Following the stud theme, the New England of NSW is in full swing for bull sales. A note from Adrian Spencer, Ironbark Herefords said the tremendous season has produced some of the best bulls he has prepared in his families long history with the Hereford breed. With the sale on the 30th August it is well worth a look at the catalogue on line.

Sheep and lambs

Any lambs with quality are being chased across all weight ranges. The last 2 weeks numbers have now dissipated with prices rebounding this week. Speaking To Chris Nevins, FP Nevins & Co, Inglewood he said Bendigo sale saw numbers fall to 16,000 with limited quality. Best extra heavy lambs jumped back into the high $200 range and any finished lambs were well sought by all buyers. However, the run of quality was short with many secondary and tail clean up lambs appearing. Light mutton also took a lift with heavy mutton firm to a little better.

This trend bodes well for those with lambs on grain or manicured paddock feed however indications are there will be a significant run of store lambs that can’t be taken to slaughter ranges. I see this as a tremendous opportunity to have a discussion about supply with your agent and processors combined. Sometimes going early allows you to beat the early spring feed rush and subsequent price lift for stores, again it is all about assessing margins in advance.

November is still a way off but the autumn and winter in SA and Victorias have seen many breeding ewes sold maybe a year earlier than normal. Quick chat with Richard Harvie from PPHS Naracoorte indicates the older ewes had to go well before lambing and the next cut was also sold when rain didn’t appear. With the lift in lamb pricing and the depletion of the ewe flock Richard and I will take a guess that the October to December ewe sale prices for Merino and 1st Cross may surprise some with numbers needed and confidence growing. Take the time to assess your ewe buying budget and maybe add a little to the top.

My view is the EID introduction has been made much harder than it should have been. It seems everyone has been waiting for the various state governments to provide a road map of what the hardware installation flow should look like. For producers get the tags in as soon as you can and start recording weight gains, drenching, group sire performance etc etc – The management and productivity bonuses are far greater for you individually because you can actively measure cost and increase your kilos produced. For agents it will come down to working together and cross referencing with other states and yards to gain a common solution which is far easier than every yard having a different system.

LPA changes are on the way with an information release about the new self assessment tool. The frequently asked questions are a good place to start prior to the 1st of September. Have a look on the Integrity Systems Company (ISC) website so you can get yourself ready.

Networking Plus – The recent RMA Network Conference in Darwin really highlighted the importance of networking and the ability of all parts of the industry to work together with a common goal. Agents, administration staff, industry bodies, analysts, financiers, insurers, IT suppliers, feedlots, exporters, media and the processing industry all in one venue created open conversations and business opportunities. It was refreshing to see the participants offer up their time to be involved and the relationships created can only be fostered at face to face events like this. One of the highlights was the presentation given by Australian Live Exporters Council CEO, Mark Harvey Sutton at the Parliament house event. The Keep the Sheep campaign is really gaining momentum with donations and support allowing a targeted approach to the wider support of the Australian Agricultural community – not exclusively live export. Take the time to have a look and get on board.

Working hard to keep our networks. The difficult Autumn in the south really highlighted how important the interaction between different states and regions is. In years past the major Pastoral companies would continually move young people around the states providing experience to the agent, fresh faces to small communities and most of all new contacts – Teachers, Bank tellers, police all fell into this category.  With the change of the agency model over the last 10 years these transfers are no longer as keenly sought with many agents remaining in one location to build their own business. The advent of electronic sales platforms has also reduced the number of physical seasonal and clearing sales where the community and buyers could meet. Looking around the sale yards many buyers and agents that have these networks are moving towards retirement. The respect this group across industry allows deals to be done over the phone with a trust built over many years. As part of the Australian rural fabric we need to continue in some way to make sure we do not lose this cultural piece and allow our industry to become too sterile. Functions like Lamb Ex in Adelaide this week, Beef 24, SheepVention , Woolarama and various fields days seem to be more important now than ever.

Beginner economics – Inflation is the big nasty yet and with the advent of tap and go cards our respect for the spend is diminished. Meaning we spend without fear – all ages. The physical act of taking cash from your purse or wallet makes you think “do I need this”. Whether a large item or another carton of beer or Sav Blanc, available cash was always the handbrake. Perhaps the government’s plan for a cashless society has more landmines than we are told. Try using cash again for a month because as we saw with the micro soft crash businesses do not have the skill set to adapt when the power goes out. I cannot believe pubs closed because their system was down. What happened to the old tab or working the change out in your head!!

Reset your thinking and managing the lift.

Farewell Muzza. Well there we have it. Senator Murray Watt, past Minister of Agriculture shot through as soon as an opportunity arose. Runaway Brave Sir Robin, Monty Python foresees history again. I don’t think it was any surprise as the odds of him staying we very short, but I thought he might have acknowledged the Agricultural sector on his way out – or maybe I missed it.

Opportunities

  • Reset and get ready for spring.
  • Map your feed – do you have enough to fatten?
  • Store lambs early – numbers are coming.
  • Keep selling the tops in smaller parcels.
  • Heavier cattle in store condition – fast weight gain
  • Lamb, wool, mutton = good return
  • Let buyers know what you have coming in advance – plan.
  • Call last years buyers of your stock and ask how they have performed.

 

 

 

 

 

 

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Comments

  1. Mitch Sharrock, 11/08/2024

    Chris – any chance of finding actual details on the heifer trade opportunity? Maybe omit the names but quote the region, quantity bought /sold and prices bought /sold etc

    Stand by for a story on this topic soon, Match. Editor

  2. Graeme Bellamy, 08/08/2024

    Your comment on Muzza got me

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