Markets

Chris Howie’s southern market wrap – September 2019

Chris Howie, October 3, 2019

Chris Howie from Agri Careers and Consultancy offers his perspective on southern livestock market trends, 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 and former Elders national livestock manager.

The spring run is on in the southern states.

Traditionally producers, agencies and processors try and jam 12 month’s worth of work into four months from September to December.

It seems everything happens at once in a normal year, however, this year we have three extremes of season. Those that continue to manage a dry time, those that had just enough rain last week to provide hope to some crops and pasture and those into hay season, vealers, shearing and selling lambs.

Cattle

Those areas with feed are seeing the trade cattle market lift also with Kevin Corcoran, Corcoran and Parker saying “solid prices for baby bullocks (550 – 600kg) at Wodonga over the last weeks being around $3.40 – $3.50.”

Store sale numbers at Barnawartha are fluctuating however late October and November are starting to show some larger early bookings already.

https://www.nh-foods.com.au/The SA south east and southern Victoria have had the September rains that provide grass growth. This suggests the weaner calf sales starting in November through to January should carry some weight in the calves. Just a thought: don’t overlook the opportunity to put your weaners on AuctionsPlus a bit earlier than the normal set sales. In the past we have all waited in hope that the North will get a bit of rain in December/January to spark the weaners sales along. However, the southern feed situation this year probably indicates this is where the enquiry will be driven from so make sure you are positioned to capture the demand.

Terry Glenane, Landmark Leongatha: “It has been very wet for four to six weeks although that is normal most years and the winter is pretty tight. Just starting to see the sun and silage making is underway.” Terry made comment that “Rarely do we see the prime cattle making more than the stores once into spring. Bullock sales at 3.45 – 3.55 and stores either side of 3.15.” Terry did note the Warrigul saleyards are closing and this will see numbers redirected to surrounding yards and increasing their yardings.

There are still a number of lives export orders appearing for Angus and Holstein females in the south. These orders do take some extra work to meet the ASEL and importing country protocols but once you understand the requirements, they provide another alternate market giving producers some flexibility with their sale program.

After driving from Mudgee to Coonamble and looking at the reports from Northern NSW the available weaners from February till May in these traditional volume areas will be extremely short. Cow herds are back to bare breeders and most calves are struggling from what I have seen. The available numbers may be very limited once the southern weaner sales have their run. Again, if you want numbers buy early. Light calves are still difficult to place as it seems there is an aversion to the lack of weight. Although I see a great opportunity to freshen them up and sell them in April/May/June.

Livestock production advice – agronomy for animals has now started to gain momentum. The opportunity to engage with people who understand the livestock industry and how to make sheep and cattle really thrive is something that should not be overlooked. Matthew Hallam, Landmark Animal Heath & Nutrition and Rob Inglis, Elders Livestock production manager, have both put specialist advice teams together to help convert available feed into kilograms of meat and wool.

The early weaning protocols are showing proven life time performance as well as allowing the breeding females to have a spell and create higher lambing / calving rates the following year. If you are worried about your ewes and lambs, cows and calves do yourself a favour and take the time to find out what is available. It does pay dividends.

Sheep

Scott Altschwager, Elders SE area manager at Millicent said “the season is very strong. Receiving 30/40mm 10 days ago and really setting the grass up to produce some bulk. It was not a wet winter by any means but this also allowed grass to grow instead of being underwater.”

The Upper South East has just started on sucker lambs and vealers with Naracoorte seeing the first numbers appear. Lamb yields, although only early indications, seem to be on par with normal years and store lambs ranging from $3.90 – $4 per kg liveweight.

The main run of feature sheep sales is about to start in the Mallee and South East then followed by the weaner sales. These sales provide excellent opportunity to buy quality future breeders and backgrounding livestock. The South East agents can handle most types of livestock and their season does provide destination for those looking to sell.

Using the Hay and Jamestown sheep sales as an early indicator confidence is still embedded in the sheep and lamb business. Even with wool taking a dip and then recovering a little bit the demand for quality stock and the willingness to pay for them is very strong. However as mentioned by the auctioneers at Hay “buy them now as there are not many in the paddock to come”.

Great to chat with Mick Curtis, Rodwells Euroa. Mick said his patch has only received half of their annual rainfall from May till now. Although it has been a mild winter and they have grown quality grass, surface water will become a problem going into summer without rain. The season is very close to cutting out now because of limited falls in September. Lambs because of the mild winter are heavy and yielding well with many producers achieving over $200 per head. Most producers who do trade are well stocked up and the apparent lack of supply after Christmas is a common discussion topic. Hay contractors moving out of the Mallee toward the inside areas are very busy and it looks as though a number of crops around Euroa and districts will be baled.” At least the hay supply is starting to recover.

Leon Peacock, Quality Livestock in the Mid North of SA said “the 15–20mm two weeks ago stretched the season by two weeks. However, the forecast hot weather this week will square the ledger up again. Lambs are starting to dry in the tip and decisions will need to be had whether to sell now or shear. The lambs look better than they are weighing and do not seem to have put fat cover on but grown wool instead. Lot of crop being cut for hay with frost damage becoming apparent and pastures now running to head and haying off.”

In general

A lot of innovation has appeared whilst the dry continues. Many have now moved from feeding livestock to implementing that learnt into creating cash flow. I noticed the winners of the lamb competition at Tamworth were looking for a project to take their mind off the season. As mentioned in media “it may not have been economical over such an extended period but the experience has given them the ability to apply the learning to a different thought process around creating cash flow and helped mentally”

Where am I going with this?? In Australia the “she’ll be right attitude” see’s us very quickly drop back to doing what we have always done. Maybe the difficult times mother nature is handing out are setting us up for the world needs to come. It seems many producers through necessity of drought have a lot clearer understanding of the nutritional requirements of livestock. In past droughts the value of livestock to sell was so low that the return didn’t add up. However, those that have fed to an end result are benefiting both financially and by applying this learning when a normal season arrives will deliver much higher productivity as well from their property with a clear understanding of the cost verses return. This form of change takes some real conviction because it is very simple to fall back to “easy” when grass is in front of you and disregard all that has been learnt.

Taking the various trade disputes out of the equation the ASF outbreak in pigs in china and south east Asia highlights how finely balanced the world supply vs demand ratio for food, especially protein, is now set. The days of putting all of the cattle into bully beef tins or tuna into cans are well gone.

Spring is a good time to assess as you go with your sale stock. Pull out your notes from January about what you wanted to do. Have you hit the market you were aiming for? If not why not? Did your marketing approach allow you to receive the best average return? Have the changes you implemented provided you with a better result? If you have grass are you adopting new practices developed through the dry? or returned to what you have done for the last 30 years – producer, agents and end-users?

No different to a racing car – don’t throw the engine away just continually tune it to gain a better result.

People in the country – Those areas that are still having a hard time with weather still need help. Lots of different initiatives are being run by a large number of groups and companies across Australia. Some are simple and some are elaborate, each with a varying degree of benefit. I like the simple personal approach that allows small communities to gather.

Even if not involved with Agriculture if any town or city-based companies out there have a bit of time pick a locality and organise a breakfast at some ones shearing shed or cattle yards. For the cost of some bacon, eggs, tea and coffee provide an opportunity for the local farmers, wives, service providers, livestock buyers, machinery dealers to gather socially for a couple of hours – bit like a clearing sale. This is not about rehashing the obvious but creating positive conversations. Lead the discussions about what has worked well in a hard time. For those few hours help provide conversations that are above business need and not aligned to a sales push. An opportunity to help a few freshen up mentally, understand they are not on their own and hopefully create some positive outcomes. Maybe it results in a benchmarking group, talking about what is working, small feedlots, different methods of feeding, why a crop or pasture held on, what gave the best results. If any company doesn’t know where to start give me a call and I will put you in contact with some great communities and people most have probably never heard of who can help you set up.

Opportunities

·      Early weaners with weight – target July – August feedlot supply

·      Light weaners – utilise feed and freshen

·      Late drop lambs that allow you to carry them through till July / August

·      Cows and calves

·      Merino ewes – going by sale results I think we are all on the same tram.

·      Ask processors, feed lotters and exporters what their future needs are. Maybe this will create an opportunity for your business:

o   Specifications, breed, supply shortage times

·      Make yourself feel good – Organise a breakfast gathering

www.agricareeradvice.com.au

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