Spring cattle supply to hang on rain and costs

Processors seek quality cattle


Markets
Yea dearer: Rodwells, Landmark and Elders yarded 1770 cattle at Yea Friday, selling to strong demand and higher prices.

Yea dearer: Rodwells, Landmark and Elders yarded 1770 cattle at Yea Friday, selling to strong demand and higher prices.

Aa

Some very good sales occurred this week as processors sought quality cattle

Aa

There are many questions, but no answers, when it comes to predicting spring cattle prices and supply.

Lisa Hodge and Scott Mundy, Landmark SGL, may well be doing a lot of chatting later on if spring rain eventuates. Scott is from Orbost.

Lisa Hodge and Scott Mundy, Landmark SGL, may well be doing a lot of chatting later on if spring rain eventuates. Scott is from Orbost.

All domestic processors are relying on grain fed cattle to augment their daily kill. However, this supply could dry up quite quickly as grain prices have shot through the roof.

Barley, which is the base for many stock feeds, has reached $460 a tonne, and Cotton Seed, which is the latest filler is selling for $320 per tonne.

With rural stockfeed companies selling at all time high prices, the returns on cattle will be in the negative.

There is, or will soon be a reaction to this by the way of buy-in prices. These must come down if equilibrium is to be achieved.

Two things will negate this, the first being a lack of supply with most of the drought affected cattle being light and in poor condition and unsuitable grain feeding a this time. Second will be spring rain. If this does eventuate supply could well fall away fast.

Currently, thousands of poor quality young cattle are hitting the market. Some rain through the Riverina over the weekend boosted demand from restockers.

At Wagga Wagga, Monday, supply lifted by more than 10 percent, and of the 4264 cattle offered, some 1800 young cattle were purchased to return to the paddock, or grain feed. Stronger demand saw prices lift between 15 and 35c/kg lwt in many cases.

So, if many of these cattle are too small, and/or too plain to grain feed, who will supply fat cattle in the short term? By short term I mean 60 days, which is the average turn off time for domestic grain fed cattle.

What is the only incentive for grain feeding? Realistically there is none at present. But prices this week ranged from 285-332c/kg lwt for steers and heifers and the riight cattle were bought in the 250-300c/kg range, there is still some hope.

Demand from processors is the only thing that will lift prices, and one example of this was seen at Pakenham, Monday. Two pens of prime Angus bullocks, grass fed, and in very good condition, sold to elevated competiton.

Processors paid 305 and 307c/kg, the latter for the heaviest pen. So, we have seen these prices more recently, but not for this weight. The first pen weighed 840kg, and the second 920kg lwt. Forget the price, most of them would be outside carcase weight specifications.

Cow prices varied with most at cheaper rates, although the best quality beef cows still sold to 250c/kg. The supply of cows remains high as the drought continues and this is seeing mostly plain to poor condition cows penned. Prices were cheaper with most selling from 45-185c. One sale was noted at one market at just 5c/kg lwt.

Aa

From the front page

Sponsored by