Markets

Chris Howie’s market wrap: Spotting the price trends

Chris Howie , April 7, 2021

Chris Howie offers his perspective on market trends and opportunities in coming weeks and months, drawing from both his own observations and from a wide contact network of producers, agents, processors, industry associates and leaders developed during his extensive career as a livestock agent. Chris is Stockco’s Business Development Manager.

 

Well Easter is behind us now and in the Southern parts of Australia including WA it is now change of season. Most of the sales are done with lambing and calving well underway. It always seems that this is the time of the year that farmers and agents should go on holidays. Prices tend to wash around with many selling as they set up for cropping or making room for the next drop.

We all have a view on what numbers are availble for the next three months with many taking a supply contract but not necessarily locking prices in. The spot market seems to be the main focaus as over the next month this is where we will see pricing trends start to appear. Sale yards will remain erratic, making it hard to read the sale from one week or saleyard to the next. As always if you are happy with the price and can see a margin in the sale move off stock that are ready and focus on preparation of the next run.

I know I have asked this before but how many producers have picked up the phone and asked the buyer of this year’s sale stock “how they performed”? With all of the time and money invested in the selection of your sires wouldn’t this one question be the most important of all? How can improvement be managed if we don’t know the end result?

 

Mix of events to get your eye in for the next year. With the return to semi COVID normality there is a lot of activity with field days, benchmarking seminars and industry events just to name a few. Speaking to Justin Costello at Costello Rural, Corryong about the up coming Beef It Up industry event at Corryong on the 21st / 22nd of April. Should be a great event with Sam Kekovich, Simon Quilty and Bill Cornell heading up a large range of industry participants.  On Friday the 9th of April, Andrew Michael, Leahcim Stud and MLA has facilitated a Sheep focus workshop – Industry of the future at Hummocks Station, Snowtown, SA. Again the speaker list is of high caliber and provides opportunity to gain insight into what is coming next in the sheep industry.

It would be remiss of me not to mention Beef 21 – Rockhampton running from the 2nd– 8th of May.

If you are going get your flights booked asap but make sure you do your homework on accomodation. From what I can see the trade stalls, speakers and organised events from every aspect of the beef and agriultural industry is covered.

 

Around the traps. With my recent involvement with the Training workshop at Wodonga TAFE for new entrants to Agency and supply chain it gave me a great opportunity to get some insight from some of those involved with the 18 attendees covering 12 agency from all over Australia. It was good to gain an understanding from Injemira principal Marc Greening about the recent $160,000 Poll Hereford bull sold this year. The semen sales from this bull have already exceeded the sale price by several multiples being ordered from all over the world. Many look at prices without thinking about the value of the semen sales. Even commercial buyers of quality bulls can off set their purchase value with a bit of pre planning.

We are never too old to learn. Dom Shanahan fronm Shanahan transport ran thorugh the various aspects of livestock transport. The world has changed a lot since the 80’s and 90’s. Loading rates, weight allowance, animal welfare – Fit to load the list goes on. If you have a chance to speak to some of the industry level carriers you may gain some very worthwhile insight and create cost efficiencies you had not thought of; both producers and agents.

Even though he is my boss Tim Pryor, GM Agency at StockCo raised some very topical points during the week. Tim commented “In all of my discussions with agents and producers, there is a common theme around breeding females. How do we retain as many females as we can? How can we bolster numbers? Funding the breeder has always been the most difficult part of a restocking program. Many lose sight of the ability to cash flow your own females that may have been destined for sale instead of buying in females. This easy discussion is based on using the equity in your own livestock in-situ effectively releasing the value of the animal now. This solves the immediate cashflow requirement.” Tim continued “By funding these females for an initial 12-month period, once they’ve become productive breeders, they can roll into our breeder product. Other producers may simply choose to purchase breeding females now and repay early with harvest proceeds later in the year.”

In a nutshell, financing a breeder allows producers the ability to fund 100% of the purchase price of any class of female livestock for an initial 12 months on the basis the female remains productive.”

Simone Dand, Wodonga TAFE Agency training coordinator pointed out to me that 8 of the contestants on Thursdays ALPA Young Auctioneers Competition at the Sydney Royal Easter Show started their careers within the TAFE Agency training course. Seems to me that it is more than a coincidence and looking back over time a significant number have competed and won under this starting point.

Cattle

The prices have continued to hold in all areas. My uneducated opinion is the great rains in the north have now put any possibility of a price correction back towards the spring flush.

Geoff Rice from AWN Lanyons, Parkes said “Carcoar agents had drawn for 9000 weaners prior to the rain and the numbers fell to 5000 in 24 hours. Prices remained in the exceptional return category with another sale scheduled for early April having 5000 advertised. Steers under 200kg, from $1,130 to $1,540/head averaging 760c to 780c/kg live. With the 200 to 280kg group between $1,410 and $1,830/head or 650c to 700c. 300+ ranges $1,620 to $2,000 or 560c to 600c/kg. Heifers were in demand with all ranges achieving better prices than their brothers. Light heifers $1,090 to $1,430 with most between 730c to 760c/kg. Mid ranges $1,395 to $1,856 or 600c to 670c/kg to top at $2050.

Cade Ebdon from C&M Livestock in Tasmania held the first sale for his company offering 850 quality cattle. Even though the crowd numbers were down the results reflected the recent prices achieved in March for Tassie. Ranging from $5.20 – $5.80 on the 280kg+ steers with the lighter steers constantly in the mid $6 to $7/kg. Heifers $5.50 – $6.00

Geoff Shipp, Elders Gin Gin, Bindoon & Bullsbook in WA reported the traditional shortage of supply is a bit tighter this year than normal in the West. Good rains in the pastoral areas have seen graziers hanging onto cattle that normally flow south. Quality is lacking across all grades and slaughter supply is becoming tight.

We often see in the supply cycle at this time of year 2 grades of pricing – mixed runs at prime sales and straight runs of breeder cattle. Often a producer will query their price at a prime sale because they are comparing it to a feature sale. The number in a line will always create extra competition vs buying at a prime sale in 2’s, 3’s & 4’s.

Sheep

There seems to be two parts to the supply discussions. Most agents I have talked to have all indicated their run of lambs is coming to an end. Many farmers and graziers have not put the numbers away reflected in previous years with earlier prices holding many out. Forward pricing has started to appear in the low to mid $8 ranges for May from both domestic (Supermarket) and export buyers.

Jay McDonald, AWN Livestock representative, WA gave a report on the pre- easter Muchea sale.

Just over 5000 yarded with 20kg-25kg trade lambs ranging between $160 and $195. There was limited competition from feeder and air freight buyers in compared to the previous few week’s however prices held with some grazier orders entering the market. Light store lambs topped at $115 with solid support. Competition was strong on all mutton grades however heavy mutton was in short supply with light and trade weights making up the numbers. Sheep with a start in the jacket received improved competition compared to previous sales.

Lamb targets – The decision to be made is whether to take lambs past the trade lamb weight range and target export weights. This decision needs to be thought about in advance, so you do not get caught with in between weight grades when the seeding program starts.

Several lamb feedlots I have visited using pellets are achieving exceptional growth rates up near 400 grams per day. With the lack of serious heat during summer the lambs are really going well which shows better conversion rates meaning less time in and less feed cost. Lamb feeders are becoming much more sophisticated in the use of data to improve outcomes.

If selling merino sheep make sure you do the sums on the skin value. Even though XB lamb skins haven’t provided much joy this year the merino wool is holding its own and shearing maybe an option prior to hooking. A quick call to your wool broker could provide a quick win especially if you are getting up near 50mm.

Speaking of merinos, I attended the Burra Merino field day in early March. Having been to this event many times it was good to catch up with Stud masters, service providers, wool specialists and agents. The studs should be congratulated as I think it was the best line up of Merino rams I have seen at this event. Much the same as the Beef cattle studs the Merino studs have stayed the course through difficult times and are now reaping the rewards. Structure, size and wool quality combined with a real focus on carcass is setting the merino up for a resurgence as a truly multipurpose – multi-income stream breed.

Opportunities

Take a break.

Attend an industry day near you.

Call a buyer of your livestock and ask how they performed.

Joined females are still a winner.

Make sure you continue to supplement lactating females.

Don’t undervalue sale stock by selling them half cooked – get some feed into them.

 

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