Prices rise ahead of calf sales

Prices rise ahead of calf sales

Mountain Calf Sales News
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The Eastern Young Cattle Indicator rose in February.

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Widespread rain across eastern Australia has bolstered industry confidence ahead of the 80th Mountain Calf Sales in Victoria's east as cattle prices jumped 20 per cent in February.

The Eastern Young Cattle Indicator rose to 650 cents a kilogram carcase weight in February month-on-month, up 115c/kg cwt on January and almost 200c/kg cwt on the same time last year.

On a week-by-week basis, the EYCI rose six per cent last week to 702c/kg cwt - the highest it's been in 12 months - up from 500c/kg cwt at the start of December.

Elders Bairnsdale livestock manager and auctioneer Morgan Davies said with a reduced yarding across the two-day even with a demand for light cattle at a premium, indicators were pointing towards a strong sale.

"In a five-or-10-year cycle, I think everyone gets a bite of the cherry to get a solid result and to keep their businesses operating; the breeders, the feedlotters, the fatteners, the butchers and the buyers - everyone needs to get a turn or else the cycle stops and this year it looks like it's the breeders turn," Mr Davies said.

The reduced offering of 7000 calves across the four sales was announced last week a month after some Ensay producers sent their calves to Bairnsdale as bushfires threatened the Alpine community.

"People say we haven't seen these price rises before but little steers making $1000 and heifers making $800-900 has happened in the past and sometimes you have to put the calculator away and buy on quality," Mr Davies said.

"If you buy a little steer for $1000 it's going to take some growing but you will always get out of those little cattle with a profit. That's why we've seen such demand for smaller cattle because they can stack them on thick, run a few of them, fill up trucks and in 12 months there will be a margin in them."

Bullock fattener Graham Osborne fattens cattle in South and West Gippsland and has bought cattle from the sales for 20 years.

He said buyers were expecting the sales to be one of the dearest on record.

"I expect we'll get a flogging as far as price goes ... there will be no cheap cattle this year," he said.

"We think this will be the peak of values that we will pay for replacement cattle but we've been through it before and while it's disconcerting, you know it's giving back to the producers.

"People up there have been through a drought to produce these cattle, there's been not much joy seasonal-wise in East Gippsland for four or five years so they deserve some relief."

In previous years, Mr Osborne has bought up to 1500 calves, but indicated that number would be considerably lower next week.

"If we get 200-300 that will be our quota I should think ... but we might come home with our tails between our legs too," Mr Osborne said.

Hip-pocket woes

Sharp Fullgrabe director Graeme Fullgrabe said while expectations were high ahead of the calf sales, available cash-flow could be a cause for concern.

"Like the belted half-back-flanker on a footy team, you keep looking over your shoulder because money is the real issue," he said.

"The banks don't want to know you, the government is spruiking it's offering money, stock agents will give you money, but at 18 or 19 per cent, so that's the only problem because while the indicators are high, people have to have money to pay for livestock.

"If you've got grass you'll fatten them and improve them but getting money is the big thing."

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