The drought will break.
The only thing I cannot tell you, is when. One has to prepare now for what you want and need to do to get back to profitability on farm. Some have most likely considered marketing the property when the feed is abundant and water is plentiful.
Still preparation is paramount so now is the time to consider repairs and maintenance to fencing and the like as there could be a number of local farm owners considering the same option. Abundant choice can determine price.
For those intending to restock, there are a number of considerations to take into account. Stock numbers are depleted or non-existent, money is tight and surpluses have been eroded with feeding costs and spirits are low.
When this season finally breaks the prices of all categories of livestock will rise substantially, history tells us that. The national herd is at its lowest level in decades and the demand for our product has never been greater.
Your property is a kilo factory, you get paid for the kilos of product you produce and you have to take immediate advantage of that feed.
Money now is cheap, compared to previous restocking periods and the likelihood of lower interest in coming months is strong.- Brendan Wade
Regional and rural bankers are good people who are approachable and want to lend money to keep their clients viable. Money now is cheap, compared to previous restocking periods and the likelihood of lower interest in coming months is strong. Present your "get back to business" plan. Be it for quick turnover livestock trading or the herd rebuild.
Involve your local agent. Tell them what your intentions are, what you want to do. They have contacts. Establish your own contacts to secure livestock. Large pastoral companies liquidate stock each and every year regardless of the season so get yourself in a position to secure suitable lines of livestock for your operation.
This is longer term and if you don't need to be cash flow positive quickly, than you have time. You will find replacement breeders. Australia is a big paddock. You will most likely not get the quality of the article you sold, but with improving genetics across most herds, you may be surprised with the quality available. You will have to be prepared to purchase cast for age breeders to start with or heifers that are culled from a herd for various reasons. The reason could be excess numbers so the quality will be of a high standard and not all cull heifers are seconds.
You have to target a market and whatever you purchase in the first instance has to have a market where you want to end up. Producers in North Queensland are currently restocking with lighter steers and heifers destined for the live export industry when they reach the required weight categories.
Short term livestock trading will give producers an entry level into the supply chain. If you haven't already got an "in" you will soon get one. Grass-fed finishers, feedlotters, wholesalers and retailers along with the larger meat processors will be scrambling for suitable livestock for their operations.
They don't have an option, they have to deliver to their customers each and every week.
Yep, you can look to take on agistment or a profit share on the amount of kilo's your property provides on weight gain to the livestock owned by a third party.
Remember the third party is making money out of your asset, so make sure you are not the one who makes the least amount of any suitable viable agreement.
Have a signed and fully executed agreement.
Remember the fundamentals of our red meat industry are strong and look to be sustainable.
We have a great product that's is highly regarded around the world. It's safe and green and enjoyable.
Our customers want more, stay involved the rewards will be there.
- Brendan Wade was a livestock marketing agent for over 30 years and is a former National President and State Chairman of the Australian Livestock & Property Agents.
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