Agist or buy? That is the big question

Agist or buy? That is the big question

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Col Harris, Delta, Cootamundra, assesses cattle for clients at the South Eastern Livestock Exchange, Yass.

Col Harris, Delta, Cootamundra, assesses cattle for clients at the South Eastern Livestock Exchange, Yass.

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What will cattle producers do with the great big season?

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Buy in cattle or agist?

That is the big question for cattle producers in the seasonally-favoured districts across many parts of the state as they grapple with the excellent current pasture and grazing crop growth.

And if they are to buy cattle, what would be the best option - short-term trading or longer term breeding stock.

Cootamundra-based livestock agent with Delta, Col Harris is urging caution among his clients who are contemplating the purchase of trading steers or heifers.

"It is a very expensive market at the moment with the lighter weight cattle selling for very dear values," Mr Harris said.

"And we don't know if the feedlot entry price for the spring will be as strong as it is at present."

He was also concerned about the narrow margin involved in buying light weight steers on the current market.

"When you are buying steers weighing 250kg for 430c/kg and you add in transport, husbandry and selling costs you only have to lose one and your profit is very slim."

Mr Harris was working on a feedlot entry weight of 400kg worth 410c/kg.

"You have to work out how quickly your cattle will finish," he said.

"This season with wattle already in flower is telling me it is running a bit early and we will have to be careful of late frosts."

Mr Harris further pointed out the cost of money wasn't part of his margin equation on current prices.

"You've got to have the money up front, you can't afford to be borrowing to buy stock," he said.

Agistment is a good option for those with feed, while Mr Harris suggested making hay or silage from the surplus growth should be considered, while some have sown more cereal crop.

Taking on agistment has been the best option for many of Jake Smith's clients across the eastern Riverina and southwest slopes.

Mr Smith, Elders Gundagai livestock agent said there is a lot of stock from the Monaro grazing the early crops which have done very well due to the kind season.

"I'm seeing agistment rates at $8 to $12 per week for weaner cattle on oats," he said.

"Another option has been to split between buying in and agisting to spread the risk."

Mr Smith said producers are hoping to turn off the steers at 450kg for 410c/kg into the feedlots but he is concerned about the feeder rate in the spring when there will be a lot of cattle coming through the pipeline.

He is also hesitant about buying at the moment, considering current prices 'very dear'.

"After selling their herds down due to drought and also taking advantage of the great prices to get rid of their poorer performers, many producers are slowly rebuilding," he said.

"They made the right decision to sell and are now in a position to buy better bulls as they rebuild their herd."

The entire industry recognises a lot of young females have been sold into feedlots or bought by processors which should leave options for the purchase of weaner heifers for future joining wide open.

But Mr Smith is more cautious and suggests buying heifers is not a preferred option.

"It is a big investment but you are in for the long haul," he said.

"At the moment anyone considering buying heifers is competing against feedlots or grass finishers."

Options considered in the Central West

Mark Garland, PT Lord Dakin, Dubbo, in action during a cattle sale at Dubbo. Photo: Mark Griggs

Mark Garland, PT Lord Dakin, Dubbo, in action during a cattle sale at Dubbo. Photo: Mark Griggs

Even though there's still a lot of "grass fever" at present with landholders looking to make the most of the autumn break, Forbes stock agent, Luke Whitty of Kevin Miller Whitty Lennon and Company, advises to buy with caution.

"There's a lot of movement in the cattle game at present and that all comes with a fair amount of risk," he said.

"If you are serious about buying breeding stock, then spend a little more money on quality for a longer term investment.

"I'd suggest nice lines of heifers, pregnant cows or cows in-calf."

Mr Whitty said there were a lot of people buying cattle now with the intention of selling sometime in spring.

"But sometimes they do a lot of work for not a lot of profit.

"The market is very dear, but it normally cuts back a bit in spring.

"However, if you are looking to buy cattle now, buying little, lighter cattle to grow out to next year may give a bit of room to move, but I'd be looking to rebuilding my herd."

Dubbo region cattle producing buyers may well look at buying cows with calves or cows, either pregnant or not, as their best bet at the moment, according to PT Lord Dakin agent, Mark Garland.

"Some are even buying cows out of prime sales and taking the punt she's in calf," he said.

"But the value's in the long-term breeding I think you'll find."

He said that would pay dividends next year as cattle numbers would be less.

"We're noticing a decline in numbers this year, and I think next year there'll be an even bigger gap.

"At present, you'll notice at sales when the female section starts the crowd increases.

"A lot of blokes are taking the punt and buying heifers and joining them to calve down next year, then sell as cows with calves, or keep them for their own herd rebuilding."

Mr Garland said females were where people are channelling their money at the moment.

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