Taking Stock: Reasons behind spring bull and ram sale season spending spree

We may not have seen the super high prices of 2021, but that averages have far exceeded expectations in the majority of cases, as buyers came with a mindset that they had to go harder than last year to secure seedstock.

In my mind, there was a far bit of overthinking the job and a perception created by fear that if you didn't turn up with 25 per cent more in your budget, you would miss out.

Sitting ringside at many sales this spring and talking to producers buying at these sales, they all had various reasons on how and why they were justifying their extra spending this year.

The old adage of selling 10 weaners or six bullocks to pay for your next bull has not been heard for 20 years, but it has been fashionably brought back this year as people look for reasons as to why they needed to pay what they paid.

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When you sit back and think about it, they are right, the mantra hasn't changed over the decades and the economics makes sense, with higher prices for commercial stock, driving the higher prices for seedstock.

It's the inflationary factors, like the buyers I have seen this year that usually attend some of the higher profile bull sales, advising they changed from a $30,000 budget to a $50,000 budget overnight because they thought they needed to.

These types of reactionary buyers have definitely inflated the market and created higher price trends.

I'll give you an example of a buyer who breeds weaners for a high profile weaner sale that spent $115,000 on two bulls. That same person runs 110 cows and I look at that operation and wonder how to justify that spending on a production system that is producing calves that might average $2000 on a good day in the current environment, selling say 75pc of the drop after retaining 25pc of the heifer portion.

In the lamb market, prices have been off the boil most of the year due to the wet weather and have picked up with the sucker run starting across the country, but as a whole, prices have been relatively stable across the year.

The wool market has fluctuated like it does and hasn't been pretty in patches, but yet Merino ram sales continue to break records and offer greater numbers.

So why have we seen higher prices at terminal ram sales, with a stable market and why have we seen record breaking Merino sales, when the wool market is still not at its peak.

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Nutrien NSW Stud Stock manager, John Settree, Dubbo, puts a lot of it down to the sell off during the drought and the change in philosophy for the rebuild process.

Buyers are looking at the chance to buy better bulls and rams and put them across their females to get better genetics gain during the rebuild process.

"You will see better female herds and flocks in the next two to three years off the back of these producers spending more money on bulls and rams, no doubt, " he said.

People used to spend $5000 to $8000 on bulls and now they are spending $20,000 to $30,000, and seeing the benefit in better genetics.

"These producers should be out looking at the better heifers and ewes they have in the paddock now and getting excited about joining them to these larger priced better bulls and rams, skipping further ahead in their genetic gains," he said.

Mr Settree said it was the concentration in poll genetics driving a lot of the movement in Merino prices along with the changes in the type of sheep being bred that help reduce the cost of production that has allowed more money for buyers to operate with.

"The shedding breeds offer you both maternal and terminal options and are benefiting from both markets at the moment, while the terminal breeds are benefiting from stud producers spending bigger money in new stud rams and producers are willing to go harder for the better genetics they now offer," he said.

The interesting fact behind these high averages seems to be from standing back and analysing the results that the programs that are investing in their genetics and marketing are the programs attracting the extra activity.

Looking at this from a marketing perspective, not just advertising, but as a holistic marketing perspective from advertising, catalogues, client contact, events, trials and competitions, the studs doing it well are the studs reaping the rewards.

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When I bring this back to the initial question around why producers are paying more for seedstock animals this year, it becomes clearer that the more people are putting in, the more a commercial producer is willing to outlay in return.

This could be from data input, technology, genetics, time with clients, shows, attending events and seminars or even just working on their own program at home to a more professional level.

I believe that the pandemic has truly created change in the seedstock industry, where stud producers are more confident in their direction, communication and marketing and this is flowing through to confidence in the buying market for commercial producers.

I can't put my finger on it, but 2022 has been a remarkable year in the studstock industry, across NSW and it has shaped a very positive ag industry off the back of the confidence.

The industry is in good shape and I believe these price highs will continue into the sale season in the new year.