WITH just a week before the first of this summer’s Naracoorte weaner sales, local vendors and agents are realistic about what to expect as the region prepares for its annual flush of calves.
A depressed prime market, testing seasonal conditions and uncertainty about interstate competition means the lead-up to the new sale period has been far more subdued than recent years.
Naracoorte’s Christmas calf sale on Thursday December 13 is preceded only by the annual Willalooka-district circuit in the Upper South East, which was held in mid-November.
Next Thursday’s combined agent sale at Naracoorte triggers the start of the yearly weaner stampede, which sees in order of 70,000 calves sold at annual sales in the south, including at Casterton and Hamilton in the Western District and Wodonga in Victoria’s north east.
Naracoorte’s Christmas Calf Sale is expected to feature 5000 steers and will be followed by a 1500-head heifer sale the next day. Local Landmark agent Brendan Fitzgerald, picture right, says the annual run of about 700 DiGiorgio steers would be a highlight of the first sale.
“The DiGiorgio family offer the main line at next week’s sale, in from between Naracoorte and Lucindale. That country is still holding-up pretty well, so they’ll be yarded in pretty good nick,” Mr Fitzgerald said.
“They really are sought-after cattle. The DiGiorgio’s have their own stud (Sterita Park) and are backed up by a decade of intense Angus breeding, with a lot of Pathfinder genetics earlier on.”
Mr Fitzgerald says the sheer quality of South East cattle offered at Naracoorte over the coming weeks ensures there will be a reasonable floor in the market. But without any overwhelming grass-driven demand and while feeder buyers’ are still cautious due to higher grain prices, agents have plenty of work ahead of them.
“It’s a major influx of calves and marketing-wise we’ve got to work pretty hard at it, especially when you’ve got a number of other weaner sales in other areas around the same time,” he said.
“There are interstate buyers who always say the South East calves are some of the best they source, so they’ll be back here to buy them again.”
As always, the Christmas Calf Sale is expected to set the benchmark for prices in the new year.
“It’s easy enough to think that heifers will be $1.50-$1.60 a kilogram liveweight, while there’ll be $1.80-$2.00/kg for your heavier steers and a bit more for lighter ones. That’d be the base,” Mr Fitzgerald said.
“And the weaners will still have a bit of weight because they did like steam a bit later in the season, despite the fact the start of the season was hard enough. “
It is expected most calves will be penned at 280-350kg, with some drafts pushing up to 400kg.
While things remain generally dry across key NSW regions, there is uncertainty about how much influence regular buyers like the Stratham family’s New England-based Sundown Pastoral Co will have on upcoming sales.
“Unless there’s a big rain somewhere soon, everyone’s going to operating on the same money,” Mr Fitzgerald said.
“The Gippsland bullock fatteners are probably holding up sales in eastern Victoria and through the bottom end of NSW at the moment, but we rarely see them at Naracoorte,” he said.
“We’d hope the southern bullock fatteners from Mount Gambier through to Warrnambool might give us a hand, but even they’ll have local sales to consider as well.”
Despite the extra freight burden associated with trucking South East cattle to Victoria’s east or further afield into northern NSW, buyers continue to be drawn to the Naracoorte sales over summer.
Naracoorte is hardly immune to the intense heat of a SA summer and temperatures are often scorching during much of the sale season. With this in mind, soft-flooring, a huge new roof and even electrolytes in the water toughs and easy access for trucks are vital.
“But it all comes back to the fact the producers are extremely good operators,” Mr Fitzgerald said.
“Also a lot of local herds have a composite base. That little bit of composite breeding in the cows, with an Angus over them, means the calves have got that extra zip about them which the buyers love.”
At the behest of buyers, agents have also worked hard in recent years with vendors to yard-wean calves prior to sale – a practice which consistently ensures a premium.
Another vital ‘tick’ on the pen-card which often draws extra bidding is for European Union accreditation.
“Being EU accredited just opens another door for potential buyers. Similarly, the Naracoorte yards are MSA accredited now too, which just provides another option for vendors and buyers,” Mr Fitzgerald said.
Sting in spring prices
Another dry spring finish has frustrated graziers throughout much of the South East and Victoria’s Western District, especially on the back of last year’s particularly disappointing spring conditions.
While last year’s dry local spring was tempered by strong grass-driven demand from elsewhere in the south-eastern part of the continent, 12 months later the picture is not so encouraging.
At the corresponding Christmas Calf sale last year, even the heaviest pens of cattle exceeded $2.20/kg, with plenty of sales north of $2.50/kg. A much lower price regime this season is an unwelcome sting for cow-calf producers selling at upcoming sales, especially those who have also been exposed to terribly lacklustre sheep and lamb prices in recent months.
“The job is tough going at the moment. Abattoirs are full, so you can’t find space,” Mr Fitzgerald said.
“Last week, we took a big hit in the market, but there was a bit of promise in the sale today (Tuesday) in patches, especially with Teys Australia operating more than they have been for the last few months.”
But local vendors responded to last week’s drop in prices, offering barely 1000 head at Naracoorte’s weekly prime cattle sale – some than 600 less than the previous week. MLA’s National Livestock Reporting Service said tough conditions prevailed at Naracoorte, with weaker trade and export competition from a limited number of regular SA and Victorian buyers.
The only minor spark was from feeder and restocker orders, which were active on mainly young cattle at fluctuating prices.
Despite the current glut, there is a hope that demand will pick-up in the coming weeks.
“You can just see now, the buyers are asking around about the number of cattle we’ll have coming on around Christmas,” Mr Fitzgerald said.
“So there seems to be a light at the end of the tunnel in that respect and based on that we’d ideally be looking to hold onto our cattle for now. But given the season, trying to hold on to cattle isn’t an option for many.”
Mr Fitzgerald says the biggest surprise over spring has been just how long reasonable market rates hung on for.
“It got to the stage where we were pretty relieved each time we got out of a sale. But the lack of rain forced numbers of cattle onto the market and we could see what was coming,” he said.
“When things get tight, a lot of producers will look at a hooks price and be very keen to grab it – they become price takers – and that really affects the saleyard system.
Mr Fitzgerald says physical markets are unfairly exposed when producers were spooked by the season or lower prices.
“To me that’s just what the bigger processors want, because then they step into the market that’s experiencing a bit of a glut. Some of them can play a really ruthless game and don’t step in at all – that’s really where it hurts.”
“I try to keep saleyards ticking-over and not be a price-taker. I’m selective where I send cattle over-the-hooks and only do so if I have to, as a last resort.”
Clients north to Alice Springs
It is an approach to business that has seen Mr Fitzgerald build a solid book of clients which stretches as far north as Alice Springs and through to Warrnambool in the south. He also regularly sources stock from the same catchment area.
“I believe in not just being a stock agent in your own local area, but getting up into different country, meeting people and taking orders up there,” Mr Fitzgerald said.
“That networking is very important.”
The range of districts he regularly works with means there is often complimentary seasonal conditions between trading districts.
“It’s a case of pushing the shopping trolley around a bit. There’s always somewhere you can source cattle from either because it’s too wet down south in the winter or too dry up north,” he said.
Dry conditions are taking hold in the far-north of SA after a generally favourable run of seasons, meaning pastoralist are now looking to offload cattle. This in turn means Mr Fitzgerald is spending plenty of time working his phone.
“From Port Augusta north to Birdsville, they’re really looking for rain,” he said.
“I’m sourcing a lot of cows and calves out of that Port Augusta region and getting most of our weaners out of Birdsville.
“The advantage of buying cattle out the north at the moment is the fact they’ve had some good seasons up there, so you know you’re buying pretty good cattle that haven’t had a check.”
Mr Fitzgerald says it has been a different story seasonally in parts of western NSW.
“We agisted a lot of cattle up north on the flood-out country around Pooncarie,” he said.
“There was a lot of seed set and clover was two-foot high on the flood-out country, so our cattle did like steam. That area from Broken Hill across to Pooncarie had a fair bit of feed, but you didn’t have to go too far north to Tibboburra and it cut right out.”