Demand for young cattle outstrips breeders

Demand for young cattle outstrips breeders

Sales
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Grass operators are looking for cows with a calf at foot or young cattle to trade.

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LAST Friday's East Coast AuctionsPlus sales offered 13,900 weaners and yearlings but only 4200 older cattle, predominately breeder types.

My initial response to the relatively low number of breeder types was to assume this was supply driven and that people were simply hanging on to breeding stock in order to rebuild numbers in drought depleted herds.

Turns out that is only partly right.

As Winton agent Tom Brodie explained, pregnant females are being held back at the moment but not for reasons of intentional herd rebuilding.

On the contrary.

In Tom's region buyers don't want pregnant females at present.

Grass operators are looking for cows with a calf at foot or young cattle to trade.

Also, feedlot demand is particularly strong and tending to outweigh the calfy heifer proposition.

In consequence, the supply side is very much a price driven affair.

People are now hanging onto the calfy types that they didn't particularly want to hold and instead are sifting through their cattle to find as many feeders and light cattle as possible to take advantage of the extreme money on offer.

A big part of the reason for this seemingly counter-intuitive trend is the season.

While there has been a good start, it is still very patchy.

Tom's own place received 235mm on one side of the property but only 60mm on the other.

The latter was just enough to get a bit of Flinders and Button grass going but subsequent 40 degree days have virtually burnt it off.

Unfortunately there are a lot of areas similarly affected and that translates into uncertainty as to what the season is going to be like.

Tom said the calfy cow/heifer market up there was usually best around July through to October.

At that stage they know what feed is ahead of them. They also know the outcome of their own preg testing and whether they need more breeders.

Also, a lot of people are now reasonably stocked up because of last year's weather events.

All things considered, there's not a lot of demand locally at the moment for calfy cows or heifers.

That led to just a handful of breeder cattle on the AuctionsPlus store sale last week for all of central-western and northern Queensland.

People are now hanging onto the calfy types that they didn't particularly want to hold and instead are sifting through their cattle to find as many feeders and light cattle as possible to take advantage of the extreme money on offer.

One mixed run of Droughtmaster cross heifers at Longreach, some with young calves and the rest PTIC, were passed-in at $1110/head.

A line of Droughtmaster cross cows and calves from Winton sold for $1810/head.

Some mixed quality, mixed age, Droughtmaster type cows at Richmond PTIC to Santa bulls were passed in at 283-288c/kg and a better line of predominately younger, vendor-bred Droughtmaster cows at Hughenden joined to Droughtmaster bulls since mid-January sold for 249c/kg.

In contrast there were 25 lots in the accompanying weaner/yearling cattle sale across the same region and all were sold.

A line of Droughtmaster feeder heifers at Winton sold for 357c/kg or $1370 per head and they still have a $100 taxi fare to get them to the feedlot in NSW.

Some lighter backgrounder heifers also at Winton sold for $1190/head or 378c/kg.

Little Angus/Brahman cross steers at Hughenden weighing under 200kg sold for a massive $850/head equivalent to 430c/kg.

However while young cattle and feeder types are clearly setting the pace it does not mean that good breeder lines are completely out of the picture.

Further south and particularly where winter calving is the norm, PTIC females are a different proposition at this time of year.

A good example is the line of quality, 20 to 22-month-old Angus heifers at Tenterfield tested six to eight months in-calf which sold on Friday for $2350/head or 495c/kg.

A similar outstanding result was the $2800/head for a little line of three-year-old Simmental heifers with first calves at foot in the Kilcoy district.

This should augur well for brothers James and Paul Hewetson at Mallanganee, NSW (pictured above) who are relinquishing their three-year-old cows PTIC to Lucrana Simmental bulls and 30-month-old Hereford heifers PTIC to a Yugilbar Santa bull at the Special Breeder and Store Sale at Casino on Friday.

Critical time for South Korea

AUSTRALIA's meat export prospects took another hit on Sunday when South Korean President Moon Jae-in raised the country's alert level in response to the snowballing coronavirus outbreak.

This empowers the government to lock down cities and restrict the movement of people.

Raising the alert level is seen as an acknowledgement that the virus is poised to spin out of control in South Korea after the number of cases jumped to 763 in a just a few days.

Until now South Korea has been reluctant to act because of the potential adverse effect it would have on the economy.

In that regard the next few days will be critical.

If it fails to contain the virus it may follow China into an economic meltdown and effectively be cut off from the rest of the world.

South Korea is already suffering economically because of a sharp drop in exports to China, its biggest trading partner.

If they occur, lockdowns and movement restrictions could be expected to have a massive impact on the foodservice sector as happened in China with reverberations back through the cold-chain to export countries such as Australia.

In the meantime with nothing moving in China, the disconnect between beef prices confronting Australian processors and the price of cattle continues to widen.

90CL blended cow (Aust/NZ Lean, FOB US East Coast) which dropped from $US235/cwt to $US227 a fortnight ago dropped another $US5/cwt last week to $US222.

In the US, Steiner commented that prices overseas packers rejected a fortnight ago became offer prices last week but US importers and end-users were generally a step ahead in continuing to lower their bids so securing a hard bid was proving difficult.

Grid rates are largely unchanged but cows in physical markets continue to come back in price.

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