South-east SA livestock market review
As we approach winter, Elders livestock sales manager (south-east) Laryn Gogel takes a look back on the past year and how various livestock markets have been affected by seasonal changes, demand and of course Covid.
It’s been a dry summer and prolonged autumn in the south of South Australia.
The lower region sustained by sufficient rainfall to paint it green, while the mid to upper south-east and Murray Lands / Mallee are quietly awaiting the elusive break.
Despite this, we are well-positioned, with the cattle market in uncharted waters with regard to the current trends and commodity price. It’s not difficult to find a cattle breeder in a crowd at present – they are the one with the widest smile!
A change in the weather
Season 2020 saw the breaking of a long harsh drought for most of the eastern state regions that had been ravaged by mother nature’s extremes.
The major cattle area of South Australia, the south-east, was blessed with an average and mild winter, followed by a great spring. This was ideal for all farming pursuits, none more so than the finishing of cattle.
While rain grows grass, grass grows kilos on cattle, and we were privileged to experience some tremendous yardings of calves that graced the races through the weaners sales of the south during the summer selling season.
Price barriers have been expanded and a new norm was created for cattle driven by supply, demand and quality. There has been strong interest and competition at our sales from the eastern states.
Competition for young cattle has been high. This has extended to breeding females with young heifers realising similar prices to their steer brothers. Pregnant or calved females have also been hot property with records and extreme prices achieved.
The national cattle herd of 24.6 million in 2020 is estimated to grow by five per cent in season 2021 to around 25.9 million, even though our national kill has a more than 50 per cent ratio of female cattle.
This continued appetite by processors for quality cattle has seen a continued rise in hook prices for slaughter cattle through autumn, as they clamber to fill kills and keep up to global demand for our unique and clean green Aussie beef.
With such a demand from grassfed environments and this product specifically targeted for slaughter, our feedlot customers are frantically sourcing feed for cattle for their domestic and 100+ day fed product.
The national registered feedlot capacity stands at 1.45 million head (Queensland is the principal feeder of cattle). There are currently 1 million cattle on feed. These numbers show we are dramatically behind potential capacity, so with a long winter to come, competition will remain strong.
Given all this, you’d expect to see record highs. The Eastern Young Cattle Indicator (EYCI) has achieved a record of 900 cents (901.75 on 15 April). The question is – are they are sustainable? Experienced punters suggest falls are imminent.
It’s often said that if you ask for sunshine you get rain. Generally hay is best made when the sun shines. For all cattle producers, now is that sunny period to make hay. With a depleted cow herd and competition across all commodities from numerous sectors, most could not ask for more.
Sellers: select your target market and be vigilant in producing the product that best suits that market utilising the best science of breeding and feeding.
Buyers: be conscious of what you wish to achieve from your program and seek good council to realise the potential of your investment.
In the end, we are rebuilding a national cattle herd that produces a unique globally recognised product during one of the most exciting times this generation of farmers have experienced in agriculture.
For expert advice on maximising return on your herd, talk to your local Elders livestock production advisor.