Prices dip as restockers remain quiet

Prices dip as restockers remain quiet


Markets
Lindsay and Joan Fechner, Koo Wee Rup, sold the last of their steers at Leongatha to 271.2c/kg and heifers to 268c/kg.

Lindsay and Joan Fechner, Koo Wee Rup, sold the last of their steers at Leongatha to 271.2c/kg and heifers to 268c/kg.

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The eastern states medium cow indicator has fallen to almost 30 cents a kilogram below the same time last year.

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The eastern states medium cow indicator has fallen to almost 30 cents a kilogram below the same time last year, and the price dip is even more obvious for those sold as stores.

As a quick year-on-year comparison, Angus cows and calves sold to $2440 a unit at the late February Wodonga store sale last year, with Poll Herefords with Black Baldy calves, rejoined, sold at $1880.

At the latest Wodonga store sale, cows with calves sold at $890-$1310, while pregnant females made $600-$1095.

And the trend is obviously as widespread as the drought, with the latest Bairnsdale store sale averaging $1046 for cow and calf packages, according to the National Livestock Reporting Service.

At Yass, NSW, the most recent sales topped at $820 for pregnancy-tested-in-calf cows and $1340 for cows with calves.

It isn’t just cows ready to breed that are lacking restocker demand because of the sheer lack of grass in the east, but also potential breeders.

At Sale, heifers were selling between 200-270c/kg, but anything with any weight was being snapped up to be put onto grain, as a way for backgrounders or lotfeeders to cut costs.

On AuctionsPlus last week, clearance of cows and calves was described as “reflecting lack of buyer confidence”, with prices ranging from $1100-$1190.

The weather causing increased turnoff of breeders is not news to anyone in the industry, with female slaughter making up 50.3 per cent of the total cattle kill for the 12 months to November.

The destocking continues, with total cattle slaughter in the east up 11pc year-on-year last week, while female slaughter in Queensland increased 37pc compared to the same time last year, and it was up 22pc in NSW.

The medium cow indicator in the east closed Monday at 172.60c/kg, and Angus Gidley-Baird, Rabobank, said processors need to keep volumes rolling through.

Mr Gidley-Baird said there were plenty of reports of processors purchasing cattle from two states away, and there was a very short supply of replacement females available, whether that was older cows or heifers.

“Any widespread rain across the country that sees people have the confidence to say they are set to winter will see cow the price jump; in late 2016-17 we saw those restocker cattle increase much faster than all the other categories,” he said.

“The $60 million question is are they going to buy trade cattle and put a bit of weight on them and generate a bit of cash flow; are they going to pick up some sheep as it will be cheaper to buy sheep than cattle; do they invest in those breeding cattle; or do they sit it out?"

“If you have any grass at all, trying to hold onto any breeding stock now is going to repay you in spades, whether that is selling into a trade market or breeding, but the question is how long are you going to have to hold them and how much will it cost for feed?”

Mr Gidley-Baird also noted that the diminished fodder supply available may remove some options for those confronted with continuing to feed stock after the autumn break – if it breaks at all.

The story Prices dip as restockers remain quiet first appeared on Stock & Land.

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