Markets

Chris Howie’s market wrap: Nine months later, trades paying off

Chris Howie , 02/08/2021

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.

 

If you can measure it, you can improve it – we all see plenty of information on different approaches to improve your productivity within the livestock industry. Various management models e.g. setting up females for joining, calving / lambing onto best pasture, supplements and animal health protocols to assist conversion rates.

In general not many commercial sheep and cattle breeders are capturing the base line information to measure improvement. Croppers, wool growers, pigs, dairy, chicken and backgrounders all have this information at hand because they know the starting weights / previous yields and pull the leavers to improve or maintain them.

In the cattle industry we put tags in at marking time but do we weigh the calves? In the sheep industry we put the lambs through the cradle but have no method of capturing information other than number of tails counted and written in the book.

Technology via electronic eartags is the largest untapped management tool we have to help improve our productivity. If you have the weight at marking time everything you do from then on can be measured. That means you can directly assess the benefit of your production systems and input cost to achieve the end result. Smarter not harder

 

Money – this spring is going to see a significant requirement for cash from agencies and producers when securing livestock – trade or breeders. The transactional weekly sale proceeds for agencies alone absorb a huge amount of working capital at current prices which can restrict the ability to crystalise trading opportunities. Even with an easing of price driven by increasing numbers in spring the values are still well into the “new territory” range historically.

Planning your funding requirements now is time well invested. Whether it be with your bank or livestock funders such as StockCo it will allow you to concentrate on the opportunity if already set up. Opportunity when you have feed in front of you needs to be grabbed by the throat not put in the too hard basket because of some paperwork. Value adding your home-grown stock using the feed season and releasing the value in lambs and calves to meet financial commitments is an excellent lever available now which historically was not an option.

Training – Every service provider should be training staff and looking for new starters in the current agriculture environment. It is a great time to bring new staff in and ride the positive wave that rural Australia is providing to every community. Wrapping a career pathway around these discussions allows all involved to build the dream.

 

Cattle

How have some of the early northern cattle brought into NSW trades nine months ago performed? It is question of interest to many. These “outside the traditional box” purchases saw a few making comments early on the limited interest when they are ready to sell. I gave Patrick Purtle – Purtle Plevey Agencies, Manilla a call to find out how it has all gone. Patrick said “traded cattle have been re-entering the market over the last 4 weeks with some very pleasing results. Better bred crossbred flat back/Droughty infused have presented well and been keenly sought by feeders and processors. Prices have been consistently around  $4.70 – $4.90. Those with hump but quality are still finding a home with a good margin on the trade. However the poorly bred cattle without shape or stretch that have come a long way are not receiving much support and still in the mid $3 range.”

Jaime Howie, Livestock support at Elders Albury rang with a cow report from Barnawartha. Best cow price this week was $3.99 following on from the previous sale highs last week with Angus cows at 786kg selling for $3.89 liveweight = $3059 per head. Some 600kg Speckled Park cows at $3.85 = $2310. Wet weather is making it difficult to get cattle out at present.

Feeder weight gains seemed to have stalled on many very good crops through cold and wet conditions. Make a call and get some livestock production advice because it is well worth trying to hit the August demand window. All prices at this time are indicative so ringing your agent or feedlot to enquire is smart business. Minimum load sizes seem to have been significantly reduced to find numbers in many cases.

Herd rebuild

For a long time we have been focusing on the EBV (Estimated breeding values) numbers for cattle aligned to feedlot performance. However, the grass finished market has developed to a level of sophistication and premium through the various processor programs which need some serious consideration when rebuilding your herd. Weight for age comes into play when utilising grass because the longer it takes to get a beast up to specification the higher the risk of seasonal intervention affecting feed quality.

Much of this demand is driven internationally by the affluent younger generation who are prepared to buy a steak that has lived on grass, tastes good and has a providence story that aligns to the eating quality plus the clean and green mindset.

At Rockhampton I caught up with Adrian Spencer, Ironbark Herefords from Barraba which prompted me to give him a call this week. Adrian commented “they are now 18 months into good seasonal conditions following the drought. Not only has the country recovered beyond expectation in the New England but there has been a resurgence of interest in Hereford cattle that deliver results for the grass-fed programs. The Hereford has been a mainstay for many cattle operations over a long period of time and we are now seeing enquiry specifically aligned to herd rebuilding to supply the grass finished market. Structure, weight for age and eating attributes are all driving this renewed interest in the breed”

I like this line of thought when re-establishing a herd – what is the demand going to be in 10 years’ time? If we look at the current media stories in agriculture from the large equity investment groups and banks they align to providence, carbon, regeneration, environment and sustainability. All of these criteria will drive demand for grass finished beef into the future I have no doubt.

As with any build the foundation is key to a great end result and having a look at what options are available for your building blocks should be the first stage. The Ironbark Hereford sale is on Friday 27th August and well worth having a look at the catalogue even if only as a reference for your decision.

 

Sheep

The first of the sucker lambs are starting to appear with Forbes and Wagga leading the charge at this time.  Only 2 – 3,000 at each centre with the lead drafts and smaller numbers. Geoff Rice AWN Forbes said enquiry from the trade has been very good with rates at Forbes on 1st draft suckers ranging from $9.50 – $10/kg plus clean fresh skins at $10 – $12. Lambs offered were very good and Geoff estimated them to be 24 – 25kg dressed.

Good 10 minutes with Ross Plasto, Plasto and Company, Wellington. “Dubbo are seeing 20,000 lambs and 5000 mutton each week. Mutton $6.50 on the heavies and $7 on the lighter ewes. Ross said Wagga reported $280 – $290 on heavy cross bred mutton. Dubbo lambs need sunlight to get some bloom into them. Although Ross did achieve $300 for some estimated 32kg crossies this week.

South Australian agent Joe Scammel from Spence and Dix agrees with what Ross has said. His clients have been shearing ewes early to sell. It made me smile that Joe has been buying mutton and lambs on property with meat buyers. It might be old fashioned but it is still the best relationship tool with a positive outcome for producer, agent and processor – there should be more of it especially for young agents and buyers. Prices on farm for mutton are $6.50 – $7.00 depending on condition plus skin value. SA season is at least 6 weeks behind for lambs with only limited numbers of tops in the draft. August and September are shaping to be a concern around supply Joe said.

We have seen some exceptional Aussie White prices up to $994 but it is important to put the top end prices in context at any sale. These young commercial ewes were joined to stud sires and Tattykeel Certified that fit into a very good operation as part of their flock development. Paying for quality breeders is always a cheap investment.

I saw the first lamb promotion on tellie this week from one of the new supermarket entrants which bodes well for demand and competition.

 

Wool – I asked Tim McMeekin, Elders District Wool manager for Southern NSW what his thoughts on the wool market where. Tim said “indications are the new sales should open at similar levels to the last sale. The falling AU dollar is helping this although there has been limited trade during the recess. It is worth noting the value difference between 17 micron and 21 micron is $12 clean which we have not seen for 25 years. This is being driven by Chinese fine knitwear demand and is not restricted by tensile strength or vegetable matter” Tim’s thoughts are this gap will close as buyers start to look at the cheaper end of the market for supply. “On average sheep are still cutting $50 – $60 . The focus on shearer availability maybe overstated with good operators who supply well set up amenities at the shed and well planned working areas are still finding shearing teams who are happy to return.”

 

Opportunities

Buy your ewes early and containment feed until spring flush

Do the extra work and draft the tops out to take the price

Cash in old cows and ewes

Goats are good – keep selling

Weigh lambs and calves at marking time.

Plenty of careers in the ag industries for those that are prepared to work

Me catching King George winter whiting in SA – kidney slappers.

 

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