LONG-awaited high cattle prices are giving northern cattle producers a much-needed opportunity to pay down debt and re-invest in their enterprises.
As our Darwin live export steer graph published above shows, after trading for several years within a range of 150c-220c/kg, export cattle prices began climbing on the back of strong demand and tight supply about 18 months ago.
Prices reached heights of 385c/kg last month before easing slightly in recent weeks as larger volumes of cattle began to flow towards the market ahead of the start of the dry season.
Northern Territory Cattleman’s Association executive officer Tom Ryan said higher prices after a run of lean years were restoring much-needed confidence to the industry.
Producers are weighing up how to make best use of the higher returns between paying down debt and investing in overdue maintenance or herd and property improvement.
The return to profitable prices is also bringing more workers back onto northern properties.
Speaking this week as delegates started to arrive in Alice Springs for the annual NT Cattlemens Association conference, Mr Ryan said many properties will be now looking to hire the number of staff they need, rather than just what they can afford.
“Over the last few years a lot of people have been just running on the bare minimum of staff.
“They have been starting stock camps later and finishing earlier, only giving contractors four to six weeks rather than 8 to 10 weeks and that sort of thing.
“So I think we will see the labour units start to increase as well.”
A lot of producers were focused on trying to rebuild herds and get back to what they would consider a normal operating level after the recent run of lower price years and poor wet seasons.
He said that how prices pan out in 2016 and seasonally will have a significant bearing over levels of investment, and many producers would be cautious before splashing a lot of capital around.
However there were certainly already signs that the wheels of the northern cattle economy where turning faster once again.
“The general optimism around is a lot of higher,” Mr Ryan said.
“People in town and businesses are starting to report more of a pick up in business, and if prices stay at a decent level I think this is the year we really start to see more of that happen.”
AA Co abattoir offering greater flexibility
Mr Ryan said the presence of the AA Co abattoir in the past 12 months had also given northern producers more flexibility in their cattle marketing.
“Usually when there is a shortfall of cattle and agents ring around, generally people have to make up six deck units to send in, otherwise it is not worth it.
“Now there is the opportunity for someone to send four decks of boat cattle, and two decks of culled cattle.
“AA Co has also been quite flexible, because they have a number of delivery points and a number of depots, they take cattle over the weigh bridge rather than direct to the works.
“People can send those decks into those delivery points, it gives them a lot of flexibility in terms of what they can do with their surplus animals.”
“We have also seen circumstances where neighbours have got together and sharing consignments to a delivery place.”
See this morning’s separate story: “Alice Springs farm supplies manager says activity has never been as strong.”
- The NTCA conference program kicks off in Alice Springs this morning. The association held its annual general meeting and welcome drinks yesterday afternoon. More reports on Beef Central next week.