Beef 2021

Beef 2021 trade displays: The smell of money, as producers enjoy the ‘goldilocks zone’

Jon Condon, 07/05/2021

Warwick Cattle Crush’s Gary Stark points out the features of his company’s high-end hydraulic cattle crush to Taroom, Central Queensland cattle producer Randall Coggan.

WALKING through Beef 2021’s vast commercial trade exhibits area this week, the smell of money was palpable, as cashed-up cattle producers go on what amounts to a buying frenzy.

Enjoying the current ‘goldilocks zone’ delivering the rare combination of near-record high cattle prices, and good to excellent seasonal conditions (in many areas, at least), cattle men and women were in a spending mood like most have never seen.

Based on anecdotal evidence only, having talk with a bunch of exhibitors, the impression left on Beef Central was that items like stock handling equipment, fencing infrastructure, animal health products, sheds and other farm storage infrastructure and vehicles – from bikes side-by-sides all the way to prime movers – were in hot demand.

The ‘boom times’ in sales was clearly evident among everybody we spoke to. Fencing materials supplier Clipex sold out its entire Beef 2021 stock supply on hand, in the first day of the event.

We found former Cattle Council of Australia president Keith Adams checking out the vast display area at the Rockhampton grounds.

“It’s due to two things: money, and confidence,” Mr Adams said.

“There’s a lot more money around the industry now than any era I can remember,” he said.

“There’s been good times in the past, both nothing like this. Cattle prices like we could never have dreamed of only a few years ago, combined with above average to excellent seasonal conditions, has injected an incredibly confident mood into the producer community. And it doesn’t look like it is going to halt any time soon.

“All that is being transferred into a buying mood for equipment and new technology that is going to lift their management operations in some way,” Mr Adams said.

He agreed that the current spending boom was perhaps partly driven by producers ‘holding back’ on making significant capital investments during the drought – to prioritise feed bills or agistment costs.

“For some, they probably held onto an old piece of equipment or a vehicle longer than they otherwise would have – but they are making up for it now with some big upgrades, from what I have seen,” he said.

“During the prolonged drought, producers just didn’t have the cash flow or turnover, to purchase new gear.”

Cattle handling equipment was one of the items high on the target list among producers this week.

Warwick Cattle Equipment had a large display of its gear on show, and principal Gary Stark was one of those being almost knocked off his feet by producer traffic.

He said the appetite for upgraded cattle handling equipment currently was as good as he had ever seen over the 50 years he had been fabricating and selling cattle handling gear.

“It’s doubled our factory’s production, virtually overnight,” Mr Stark said.

“The first thing – it rained, after four years of drought for some cattle producers. That, on top of the sort of money that store and slaughter cattle are now worth, has driven demand for our gear sky-high.”

Mr Stark said there was typically a ‘lag period’ of some months before demand started to rise after a significant rain event, but he had anticipated that this time, increasing production through is factory in anticipation, virtually as soon as the rain started to fall, and well before the phone started to ring.

“We could see it coming,” he said. “We’re currently only two to three months out, and have put on more staff, but normally I like to promise delivery within four to six weeks,” he said.

Mr Stark anticipated that the current boom could last for the next two to three years, at least while cattle prices remain anywhere near where they currently sit.

“Normally the industry sees either good cattle prices or good seasons, but not both. Nine times out of ten, it’s one or the other – but this year, were are in the sweet spot.”

Tax write-off driver

Another big factor in the massive trade taking place in goods and services at Beef 2021 was the Federal Government’s tax write-off concessions – lifting about 12 months ago, to $150,000.

“When the government originally lifted the threshhold from $20,000 to $30,000 some years ago, producers started buying larger, more expensive items like a new crush, but in components – building a ‘new crush’ progressively over several years, but adding pieces costing less than $30,000 each.

“Now under the $150,000 threshhold, they can buy the whole crush, and claim it back in tax on year one. That has been another big stimulus to the current boom in equipment sales,” Mr Stark said.

“That, alone increased our sales multiple times over – it was like a gunshot going off.”

Ag-tech sales go ballistic

Ag tech, in all its forms, was another red-hot sales item among Beef 2021’s trade displays.

Launching his company’s new satellite-linked animal ID and location tag during the event was Ceres Tag’s David Smith.

Sales (all online-only – not actually transacted at the event) started on Monday, and were described as ‘red-hot.’

“The mood and optimism evident in the industry and here in Rockhampton has certainly delivered an ideal launch time for our new tag,” Mr Smith said. “We’ve been blown away by the early uptake in the first few days – from right across Australia, and across the world.”

“We only turned on our e-commerce purchasing site on Sunday night, and when we woke up on Monday morning, we’d already made sales, including eight boxes of tags into North America. It’s just a really exciting time.”

“The product is attracting attention in its own right, but the current industry environment has been just perfect for our launch.”

 

 

 

 

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