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Murray Arnel: Drought tips balance for end of financial year cattle markets

Murray Arnel, 05/06/2019

June’s monthly store cattle markets are normally a busy period for livestock traders balancing their ledgers for the taxation year.

Getting these financial numbers right is never an easy task and this year, due to the length and severity of the drought in south eastern Australia, the balance has been squarely tipped in the favor of those seeking to buy rather than those wanting to sell.

Euroa’s Michael Curtis, Rodwells, this week said that there might not be the numbers left in the system for traders to square their ledgers as in other years.

A lot of Victoria’s Northeast spring-drop weaners he said that would normally be set for these sales have already been sold.

He said the region which bounded by Yea in the south to Wodonga in the north holds a good number of cattle trader/finishers as well as an abundance of beef-breeds cattle breeders.

“It has been a particularly long dry spell this time around” Mr Curtis said.

“Most of our breeders have had to sell down early a significant number of their spring-drop progeny because of the severity of the dry spell while many of the regions traders have had to hold their finisher stock longer than they would have liked because of a lack of paddock feed and the high cost of supplementary hay and grain”.

“It’s been ä taxing time at both ends of the production chain” Mr Curtis said.

But it is quite amazing how quickly conditions have changed since rain began to fall in early May, he said.

“Six weeks ago, paddocks were bare and the creeks had stopped running, now there is a tinge of green and the creeks have commenced to run again”.

“Most of the northeast has responded well to the recent rain however, I think many of our would-be buyers might wait that extra month or two, perhaps until mid-August, before restocking to allow their pastures to recover.

Mr Curtis said the store cattle market is well-priced for those willing to buy.

Light weight young steers, under the weights of 260 to 280 kilograms he said are currently priced 20 to 40c/kg under the price of the feeder market and also steers being sold for slaughter.

“Seldom does a gap like this exist and it has become greater in the past few weeks as the colder weather has set in” he said.

Mr Curtis quoted recent paddock and auction sales of feeder steers being made between 330 and 350c/kg while auction prices for the lighter weaners have mainly averaged $3/kg (plus or minus some according to the variances in breed and condition).

Most feedlots he said have dropped their induction weights from 350 kilograms back to as low as 280 kilograms in order to secure numbers.

Their theory behind this strategy he said would lengthen the time the cattle spent on feed but it was either this or miss out on buying the cattle.

Today (Wednesday, June 5) Euroa will be one of the first markets to conduct an EOFY sale.

The market will offer 2000 head comprising a limited number of grown steers, a handy selection of spring-drop weaners plus a tidy display of cows and calves.

Tomorrow (Thursday June 6), some 2000 head will be offered for sale at NVLX Barnawartha.

The selling agents, Elders and Paull & Scollard-Landmark have advised a yarding of predominantly spring-drop weaners and yearling-off cattle along with a small handful of older grown steers and heifers.

Also tomorrow, South Gippsland Agents have listed for sale 1500 store cattle at VLE Leongatha.

This yarding, although much smaller than the two previous sales of 4000 and 4500 head respectively, has listed is a selection of older grown steers, aged 16-20 months to suit the region’s bullock finishers as well as some handy drafts of spring-drop weaners and a handful of breeding females.

Leongatha’s James Kyle, SEJ, says the highly productive South Gippsland cattle finishing districts are pleasantly wet but there is not a lot of grass in paddocks.

The area he said does need sunshine and dryer weather but he doesn’t think there will be many overly worried about their taxation position following a relatively profitable but difficult trading year.

Some of our smaller landowners may need to buy cattle to meet their taxation turnover threshold but their influence on overall demand is not expected to be market-changing”, Mr Kyle said.

While a lot of the region’s larger operators he believes will be more focused on nursing their country, their cattle and their fodder reserves through until new growth emerges.

However, Mr Kyle did say, with the opportunities that do prevail for their growing out of smaller cattle to feeder weights, some traders have shifted their focus away from the production of heavy bullocks into growing out “quick turn-over” feeder cattle.

Meanwhile to complete this first week of June sales on Friday June 7th Colac in Western Victoria, Bairnsdale and Sale in East Gippsland and Wangaratta in Northeast Victoria will also conduct their regular monthly markets.

Each of these yardings have advertised offerings that will also comprise mostly spring-drop weaners with a small handful of grown cattle and breeding females in each.

Phil Douglas, Charles Stewart-Dove, Colac, said that following falls of 60- 80 mm over the past two to three weeks, the Colac-Otway region and further west into south west Victoria has had a good start but the weather has now become cold.

“Our country looks good with a green tinge but there is no body in the pastures”, Mr Douglas said.

“Our croppers are happy, the coastal areas are okay and while the island districts, from Mortlake to Hamilton, are starting to get away they did have a later start” he said.

Mr Douglas said there will be good opportunities for those wanting to buy this month “if people wanted to have a crack”. “I don’t think many in our region will have a tax problem however I guessing most will take the winter quietly after extensive hand-feeding that began back in November and is still progressing for some”.

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