A small yarding of 200 head at the prime cattle sale at Gunnedah on Tuesday reflected a widespread trend across inland NSW with plenty of weaners coming into country full of feed and not a lot going out.
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Backgrounders in the district have been importing young cattle all year, first from the south and then the coast with good quality Angus steers from $1400 to $1600 worth the risk when they can be on-sold for more than $2100, reports livestock agent and principal of Fleming and Ross, Ray White, Tim Walsh, Gunnedah.
Those buyers who bought in the spring have made their money. Those attempting a gain in the autumn are banking on good winter crop, of which there will be plenty. Grain prices are shrinking on the back of reduced feeding demand so a profit can be eked out along much of the supply chain - but the margins remain tight.
"If your business model is trading cattle then you've got to keep trading," he says.
Meanwhile, prime sale prices for feeder cattle above $2000 are limiting what returns lot feeders can ever hope to get and there is talk that smaller operations might be reluctant to fill their pens after tipping out current supply.
All this rain will mean only one thing - ongoing demand for restocker cattle will maintain high store sale prices.
At Inverell, where 400 head were yarded, heavier feeder steers were slightly cheaper on account of the difficult wet weather rather than any other factor. Feeder heifers brought 430 cents a kilogram for 440kg or $1800.
"For the lot feeder there won't be much joy in it," said Inverell agent Ben Lehman. "And for the backgrounder there's no quick turnaround, buying a weaner steer for $1500 to $1700 at 260kg. No one can guarantee the price next year. However, we are enjoying the best season across a big area and you can't utilise it if there's no mouths on it. If you trade cattle that's what you do. You can't go and buy a mob of emus."
At the processing end losses are being made and if high prices remain until this time next year, as predicted, there will be some hard decisions to make, says CEO of Casino Food Co-op Simon Stahl.
Already supplies of vealer calves for slaughter have disappeared over the range to paddocks in the west, with store prices in the mid 700s no match for a consignment order.
The domestic market has rallied to support the beef industry, with consumers willing to pay double what they shelled out last year but in the past month that trend has softened, said Mr Stahl, with a flood of secondary cuts coming onto the market and driving wholesale prices down.
"There is already a contraction in the processing sector with shifts cut and there will possibly be more to come," he said.
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