Markets

Flush of Riverina cattle puts market to test

Tom Dawkins, 11/10/2012

Hopkins River Beef operations manager David Maconochie.The recently-arrived Angus steers in the front paddock of the Maconochie family’s property at Dunkeld completed something of a homecoming when they walked off the truck and found themselves in the shadow of the Grampians mountains in western Victoria.

These black calves, like many of the feeder steers which have been purchased by the Maconochies this year, may have been purchased out of the NSW Riverina but were, in fact, born and bred in the Western District.

Earlier in the year during western Victoria’s traditional weaner sale season, abundant feed throughout much of the Riverina, especially around Hay, saw truckloads of cattle being sent north of the Murray River either to restockers or onto agistment. A tight season in the Western District restricted local inquiry at weaner sales, only compounding the scale of the northern convoy.

The subsequent dearth of local cattle forced the Maconochies, of Hopkins River Beef fame, to cast a wider net than normal to find most of the Angus steers for their feedlot.

“We’ve had to go further to get our cattle this year. About 80-90 per cent of our cattle have come out of northern Victoria and southern NSW,” Hopkins River Beef operations manager David Maconochie says.

“They had a much better season, especially over summer and a lot of western Victorian cattle went north earlier in the year, so the numbers have been up there.”

Angus steers at Dunkeld awaiting entry into the Hopkins River River feedlot. But since the start of spring store sales like Wodonga, which yard a large number of cattle from the Riverina catchment, have seen yardings double to 3500-400 head as producers and traders north of the Murray offload large numbers of cattle.

Hopkins River Beef regularly sources cattle from north-east Victoria and southern NSW, although this year the reliance on those areas has been far greater than normal.

“Our buying radius is about 1000 kilometres, stretching up to Gundagai and Wagga Wagga. We tend to go more towards NSW rather than into SA, but it’s always seasonal,” Mr Maconochie said.

Rodwells livestock manager Rob Bolton said that most Riverina vendors were now in “selling mode”.

“Plenty of Victorian cattle went up there and have done very well, but now they’re ready to be sold,” Mr Bolton said.

“North of Hay, where most of the cattle went, it is still looking pretty good. They reckon they only need another shower of rain and the summer grasses would get going.”

But Mr Bolton said the season was quite different back closer to the Murray.

“Around Deniliquin they never really got a season. When the Riverina is on, it’s the best paddock in the world, but when it’s not, it’s bloody tough,” he said.

Larger yardings at store sales like Wodonga have also revealed that producers are wary of the season and a further dip in cattle prices.

This situation echoes reports from throughout eastern Australia of larger yardings and deteriorating feed conditions in many key regions. This widespread pressure has been brought to bear on the Eastern Young Cattle Indicator, which has slipped to 351c/kg carcase weight – the EYCI’s lowest since 2010.

“Store cattle are probably $100 cheaper than a month ago and a fair few are worried about the market it getting cheaper, so they’ve opted to sell now,” Mr Bolton said.

“Prices probably got a bit overheated during winter when numbers got tight and I think we needed that correction.”

Adding to the trepidation is reduced competition for store cattle from the buyers’ gallery, which is being tested by the flush of numbers.

“South Gippsland is as wet as a shag and they’re buying a few, but they’d normally be flat-out buying cattle at this time of year. They’re set for a bumper season and as soon as they dry out, they’ll start buying in some big numbers,” Mr Bolton said.

Speaking to Beef Central from the Wycheproof saleyards, where he was helping local agents prepare for the special Mallee store sheep sale to be held today (Thursday), Mr Bolton said there were still plenty of focus on upcoming spring sheep sales in the south before full attention turned to the busy run of feature cattle sales over summer.

“But before too long we’ll have the start of the weaner sales at Naracoorte (in South Australia) and I guess we’ll start to get a feel for how the rest of the weaner sale season might go,” he said.

“There’s a fair bit than can happen between now and Christmas, although you’d think the weaner cattle in the Western District should have a bit of weight in them given the way the season is going down that way.”

Mr Maconochie echoed that prediction.

“Down here (south-western Victoria), the early cut-out and the later start to the season has meant there’s been a lot less weight on the cattle locally, but that’s changing now,” he said.

“The recent rains we got through September are the rains we missed out on last year, so it looks like we’ve got a guaranteed season and there’ll be a pretty big supply of cattle now through to Christmas.”

Mr Maconochie said a number of prevailing factors were impacting of the feedlot industry at the moment, including higher grain prices and competition from grass cattle.

“A lot of feedlots now have backed off in the south because processors can buy grass-fed cattle so cheaply, about 60-80c/kg cheaper than grain-fed cattle,” he said.

“While fat grass cattle numbers are flowing, it’s easy for processors to find numbers and you wouldn’t expect prices to rise much until autumn.

“Plus, grain prices have gone up and up, which means it’s more expensive to produce grain-fed beef at the moment.”

But a longer-term view provided plenty of reasons for optimism.

“I can see southern feedlots firing up from December or January because processors and supermarkets will be looking for grain-fed cattle running into autumn as the grass cattle become harder to find,” Mr Maconochie said.

“Until that change in supply happens, which probably won’t be until closer to the middle of next year, 

See Beef Central tomorrow to read how the Maconochie team is putting its brand on the map

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