Interstate buying – in a depth of capacity not seen before – is expected to underpin the New Year weaner sales in 2017.
That’s the view of corporate stock agency livestock managers as they crystal ball the prospects for the 60,000 or so weaners expected to hit the southern market during January.
Elders southern zone livestock manager Peter Homann said more people than in the past were looking for weaner cattle this season, given the breadth of the feed spanning the eastern states.
He said most of the potential buyers would be looking to pay a certain rate, but that said, most would be willing to pay current rates.
“From what we understand the bulk of the interstate buying is only the freight component difference,” he said.
He said Victoria’s market would not need to slip too far from current rates and the big northern operations would be buying cattle. With the abundant grass being a cheaper backgrounding feed resource than grain, buyers would be able to find savings as they grew out, he added.
Mr Homann cited an Elders deal that on a purchase price of 330c/kg for heifers, backgrounders are being paid weight gain at $1.50 per kilogram, and the cattle are performing at 1.5 to 1.8kg per day on grass.
“There is money to be made at these rates,” Mr Homann said.
Mr Homann said while many in the beef industry feared the market easing, he believed there could at least two years for the market to run at or near current levels before any thing substantial may occur to prices.
Two factors reinforce this theory. Firstly, the beef industry normally took four or five years to recover after a prolonged period of drought, as was experienced. But with the grass now in the country, this current recovery could take a year or two less. And secondly, for the processing sector to return to the profitability, it needed to increase production which would require more cattle, which was above what the market had available.
Tim Jewell, Landmark Hamilton, Vic, said their vendors breed cattle to present at the feature sales every year.