STORE cattle markets are going ahead in leaps and bounds at the moment, due to good falls of rain across a large area of the Eastern Seaboard.
Some districts have received more than their average monthly rain in just one or two days, and many areas have had follow up rain, giving confidence of an autumn, and for crop farmers, some deep service moisture for planting.
It was interesting to note, last week, the volume of store cattle up for sale, with Cooma, Wednesday and Friday, Braidwood, Wodonga and Pakenham, Thursday, and Ballarat and Carcoar, Friday, offering a total number of around 17,300 head.
For markets from Wodonga, north, very strong demand was seen for very young, lightweight steers and heifers. Prices here, returned back to the very high record prices seen in January. These cattle, and many others, have a long journey ahead of them, before being resold.
Many have commented that prices will have to stay high, in order for producers to be able to retrieve the money spent, let alone making a profit. A conversation with a small wholesaler and butcher, Monday, indicated how tough it is for the retail trade. Some producers may say “Ooh isn’t that sad”, but when opportunity arises, prices will come back.
The Phegan family (pictured) were at Wodonga to buy some cattle, but Danny Phegan was not optimistic about being successful.
“We have some good grass at home, and want a few mouths too eat it,” he said, which is emerging as a trend for many farmers.
Most of us know how one side of the side of the industry did very well a couple of years ago, and now it is the producers turn.
However, part of my conversation on Monday was around the increasing cost to processors and retailers.
It cost around $85 per head to slaughter a domestic beast, and currently the return from hides is poor. Cartage, wages, workcover and superanuation are all increasing, but now that Hazlewood power station, which supplied around 20 per cent of our electricity, is closed, costs will only rise further.
If you are a supermarket, cost can be amortised over other products sold, to some degree, but for small butchers, this is not possible. So what are the alternatives?
If a butcher shop is struggling, both for sales, and cost recovery, which many are, there are few options. Decrease employment levels is the easiest option, although this leaves a sour taste, and increased hours for the butcher, but also purchasing cheaper meat.
However, the second option is not available at the present.
There is one obvious solution to this, and that is cheaper prices for cattle, lambs and sheep. Given the nature of the chicken and pig industry, these prices are already heavily controlled, but we don’t want to, and can’t go down that path, as the logistics are way to daunting.
The conundrum here is, do we continue to pay well over the odds for store cattle, sheep and lambs, or let the grass grow under our feet.
I had a conversation with a colleague of mine at a recent market, where i repeated an old saying, said to me years ago.
A producer can withstand drought and floods, but they cannot stand having grass going to waste in the paddock.
Hence, the old age problem continues. Good luck.