Taking Stock: Why are people only spending $4000 on bulls?

Now producers are having to pay at least double to get themselves into the market, and while many can see it as an investment into their program to gain better returns, others still want to pay $4000 or lower.

As 2021 drew to a close we saw bulls commonly kicking at $6000, while others had a $10,000 buy-in price with $2000 bids non-negotiable as the fast-paced auctions powered along.

Sale averages have grown by 30 per cent or higher, with some seeing incredible growth of 50pc. And while much of this aligns with the current commercial market and is driven by a good seasonal outlook, it should be where the stud industry is heading as seedstock producers gain premiums and begin to be reap the benefits of genetic progress.

This trend has followed us into 2022 with recent sales across the country already making headlines with robust top prices and averages.

It should not be surprising that we are seeing growth in averages, especially with the genetic gain and exceptionally large investments that stud producers are currently making, not to mention how animals are changing.

I mean if seedstock business are investing in leading genetics, utilising reproduction technologies, collecting more data and up-taking agtech, they are giving themselves every opportunity to better their end product, bring it to market and ensure quality that the commercial buyer, and everyone throughout the supply chain, can benefit from.

In the scheme of things, with cull bulls making on average 350 cents a kilogram, and returning up to $3000, it should be a given that the base price for a bull at many sales is not the $4000 we were previously seeing but $6000 or more.

People are being reminded of what they could get from cull bulls as the auctioneers are calling for the next bid, saying "you'll trade in your old sires at $3000" and "it is only an extra weaner in this market".

It may ruffle some feathers, but why do some people still only want to pay $3000 to $4000 for their next sire when they are getting just below that for weaners or that price or more for a single cow/calf unit. Is it fair?

The cost to get a bull to sale is also increasing, with added breed requirements and testing, labour, animal health administrations and marketing just some other things that need to be factored into the advertised or base price of bulls.

When commercial producers are establishing a budget of how much they are to spend on their new commercial sires, the old wives' tale used to say "the value of eight to 10 calves".

In this cattle market, $2000 by eight or 10 calves would mean $16,000-$20,000. This doubles the price of what people would have usually budgeted.

With that spending money you could have previously secured the high seller, yet now it buys you a bull at the average or just above.

This increased initial outlay will likely pay dividends in the gains made at the other end in the quality of weaners or replacement females, and we all know the importance of having a strong maternal base as the backbone of your operation.

Though, this does not always happen overnight, you can't use a record-breaking bull then expect better in every circumstance.

Our breeding programs and philosophies are all different, and some only want to get the cheapest bull they can focusing on quantity, while others may put more selection pressure on quality and seeking out the ideal bulls to suit their needs.

Neither is wrong, but it's hard to see some stud producers being asked "do you have a bull at $4000?" or hearing "I paid $3000 last time I bought a sire from you (three years ago)" in the current market.

With people paying more for bulls, there has been talk that they must collect them now. Given some say it is for insurance, others are looking at trying to market semen and it makes me wonder if this is actually verified? Or have you bought an expensive bull in your eyes, but an average bull in the industry's eyes.

The price of bulls will always be relative to the commercial market they are selling in, so there will be highs and lows, but I hope to see base prices continue to align with the market and producers accept this and be willing to pay.

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