THE year 2020 will undoubtedly be remembered for several significant reasons, including widespread rain and floods which have been the catalyst in breaking records in livestock markets across the nation.
Already, in only our eighth week of trade for the year, AuctionsPlus has recorded its largest ever sale and the largest public cattle auction in history with 23,677 head offered on February 28.
The record-breaking start to the year has inspired the AuctionsPlus Market Insights (AMI) team to analyse data to determine which regions have been the significant contributors to these record numbers.
Furthermore, the AMI Team looks to understand the implications of these numbers on the wider industry through utilising AuctionsPlus sale data along with average rainfall data sourced from the Bureau of Meteorology.
Northern Tablelands rainfall data was sourced from Armidale, Guyra, Tenterfield and Glen Innes while southern Queensland was sourced from Toowoomba, Dalby, Warwick, Goondiwindi, Meandarra and Gympie.
As drought conditions worsened and the cost of feed increased in the latter stages of 2019, cattle producers in NSW looked to the AuctionsPlus platform in order to destock.
Brian Olsen, of Olsen Agencies in Armidale, said destocking for the region went in waves.
"The first saw all surplus cattle sold, the second dipped into keepers and breeding stock and the third saw all stock sold," Mr Olsen said.
These trends as shown in Figure 1 are highlighted by the Northern Tablelands offering 9000 head in September and a further 13,500 in November.
With estimates that the region has destocked to 30 per cent capacity, it comes as no surprise that following recent rain, trends have reversed and buyer confidence has returned and the region has been the biggest online purchaser.
So far, the region has purchased 10,914 head in the first two months of 2020, compared to 5745 head in the past six months of 2019.
Mr Olsen thinks vendors only option for the time being was the online market, with no real physical big store sales so far this year.
"The online sale market is also fronting with good numbers and good lines," he said.
As rainfall continues to fall along the east of Australia and buyer confidence increases, it is likely re-stockers will have to look further afield.
"If the quality cattle is available then producers will not be restrained by borders, people have already purchased as far away as South Australia," Mr Olsen.
Similarly, Sam Ditchfield, of SJ Livestock Marketing, Armidale, was aware of people talking about looking to purchase from as far as WA if the quality of cattle is there.
"Nobody has pulled the trigger and crossed the Nullabour yet though," he said
The Southern Queensland region has also recorded significant purchases online, off the back of recent record rainfall.
Southern Queensland has secured 22pc of the 42,023 head offered online in the past two weeks, equating to four times the amount purchased in January, as shown in Figure 2.
Andrew Wilkie, Objective Livestock Marketing in Goondiwindi, Qld, said destocking for the region meant backgrounding operations were down to less than 10pc capacity.
"At the same time, breeding operations are sitting at 20pc to 50pc capacity," Mr Wilkie said.
Although the region is buying a considerable amount of stock, not everybody is jumping into the restocker market immediately.
Mr Wilkie said there are multiple categories of clients.
"The majority feel a sense of relief post rainfall and are taking a deep breath enjoying full dams and growing pastures, others actively looking and purchasing stock, whilst a smaller amount are looking to list," he said.
A positive sentiment surrounding the beef industry has returned in many areas.
Those who were in the position to retain stock and carry them until a change in season are being rewarded and met by those who have renewed confidence in the market.
Regions such as the Northern Tablelands and southern Queensland who are leading the charge in terms of purchasers will likely become sources of heavier weight cattle later in the year.