The livestock industry is potentially heading into uncharted territory after recent heavy and widespread rain across much of the southern states.
However, how widespread this may end up is still in the balance with the great uncertainty over the dairy industry.
Over the past seven days of trading, lambs have reached over $200, albeit very heavy lambs, prime bullocks have sold to 323 cents per kilogram liveweight, and restockers have set a cracking pace for replacement steers.
Supply and demand is the issue, and as we enter one of the most uncertain supply periods, where might it all end.
After the recent rain, restockers have put a floor in the market for lighter weight steers, this week paying up to 370c/kg at Wodonga for young steers. This figure has already been topped many times at recent store cattle sales of Yea and Ballarat, and MLA’s Feeder Steer Report also shows price increases over nearly all categories.
With producers now looking to fill paddocks with cattle, the higher prices are seeing a lot of light weight cattle going to pasture. These will take many months to return to any sale, both store or prime market.
Feedlots are currently filling the void for processors, but the ongoing need to replenish that supply is seeing a multitude of heifers purchased for grain feeding.
One thing is for certain, the regular supply of quality steers, heifers and bullocks, in the spring and early summer, will only be heavily depleted, as many of the traditional fattening areas are well down on stock.
Even this week, the drop off in supply of grain assisted cattle was quite noticeable, as the cost of grain feeding, coupled with the cost of the cattle, is not giving much, if any, profit.
The supply of quality lambs will also be an issue as the drought has seen poor joinings and fewer twins born.
This shortfall may only last as long as the new season lambs stay out of the market, but prices could become very interesting here.
Grown steers and bullocks are already in very short supply, undermining processors thoughts of reduced over the hooks pricing.
Because of the Murray Goulburn, Fonterra debacle, many dairy cows have been slaughtered. At this stage this has not undermined the price of cows, and while some declines have been seen, equally there has been price rises too.
I can only see a big drop in the supply of cows, both dairy and beef breeds, as we head into spring. Already, there has been increased restocker competition at physical sales with producers buying both dairy cows, and beef cows, and processors are only operating at reduced capacities now.
