Chris Howie offers his perspective on market trends and opportunities in coming weeks and months, drawing from his own observations and from a wide contact network of producers, agents, processors, industry associates and leaders developed during his extensive career as a livestock agent. Chris is Stockco’s Business Development Manager.

 

 

 

 

 

A RUN of forward lamb contract releases — including the first contracts for January and February — has been a real confidence boost for lamb traders recently.

Paul Leonard TFI National Small stock manager and his team have injected confidence for the backgrounders by looking outside the box to create continuity of supply. it was a great move at an industry level.

At StockCo we saw an immediate reaction with invoices for store lamb purchases. The TFI release was oversubscribed and filled within four days. This price allowed lamb traders to put some numbers together on the margins. With current store prices having visibility of the target pricing for delivery into January/Februrary adds another dimension to feeding lambs.

The season in many of the wetter southern areas has seen a delay on weight gain and yields in lambs and calves.

Feed is still fair to excellent, but the lack of sun really had a handbrake on livestock performance.

Sheep

Lamb yield has always been a topic at this time of the year. With scale systems, we all have the liveweight in front of us but with lambs this weight does not necessarily correlate to carcass in a year like this. Maturity, quality of ewes and sires, spread of rib, fat cover, ewe milk quantity, wool, time off feed before weighing, heat and the experience of the assessor all come into play

I overheard a conversation about lamb yields the other day and decided to follow up. All too often it is very easy for vendors and agents to fall into a blame conversation rather than gather some simple facts when lambs didn’t yield as well as expected.

Parts to consider before picking up the phone – Seasonally we started dry at lambing time, winter was cold and wet with no sun, worm burdens have been massive if not managed, grass didn’t have the punch it normally has. Genetics do play a big part. If we remember back 12 months ago our yields in the southern areas were also down because we had too much rank feed not suitable to lambs.

All of these factors create a shortfall on dressing percentages with lambs coming out of the winter not having hardened up. A processor I spoke to said even his buyers had missed their weights on the first suckers they had bought. One of his major suppliers weighing 6 loads rang and reduced to 1 load as the lambs just didn’t have enough in them.

Ewe values: Merino ewe sale quality across South Australia and the Riverina has been outstanding. In mid-October the market start to soften then hold in the $250-$280 range for fair to good quality 1.5 year olds. Feature lines continued to reap the rewards of quality and repeat buyers at $300-$400. Many of the 5.5 year-old ewes presented in outstanding condition and I would suggest comfortably weighing 85-95kg liveweight. Pricing on the matrons ranged from $170-$255, with most between $190-$225

Naracoorte blue ribbon 1^st X ewe sales

I had a quick chat to Richard Harvey from PPHS at Naracoorte. The Thursday 11 November sale is the feature first cross offering of 1.5 year-old ewes, with 18,000 booked to sell across all agents. Forecasting prices for this sale is always difficult, but Richard’s expectations are $450-$480 for the tops with the middle range ewes $380-$440. Those that need a bit more to get them in prime condition for joining around $300 – $350. I might have a sneaky schooner on a pen or 2 making over $500 considering the year on year quality and repeat buyers.

Thursday 18^th of November will see the 1^st x ewe lambs sale. Expectations are 35/36000 however numbers are yet to be finalised. Reasonable numbers of ewe lambs have been sold during October however the market has eased a bit and slowed these sales down a bit. Both of these sales are interfaced with AuctionsPlus.

Cattle

Comparing breeds and production programs

Before comparing different programs or breeds it is important to isolate each unit and look at the associated income, livestock production methodology and cost. Coconuts and peanuts, mangos and macadamias, Merino or composite etc. You can crunch the numbers till the cows come in for milking but each enterprise has its own cost base and work load to make it fire to its maximum potential. Changing from Merino to composite/shedders may sound like the right move because you have removed the shearing and fly factor but if you fail to ramp up your understanding of high-performance lambing machines you will very quickly have an “oh shit” moment. Your marking percentages are still the same but the wool clip is gone. We saw this happen 20 years ago when flocks were sold to start continuous cropping – overdrafts ballooned because the wool clip use to pay for the super. Understanding how to keep lambs and calves alive is the first step before thinking putting more on the ground will change the bank balance.

Cattle

Approaching weaner sales – all to soon the weaners sales will be upon us.

Robin Steen from PPHS, Naracoorte said Naracoorte and Mt Gambier weaner sales are ready to fire in early December. Their company had 500 weaners in last weeks store sales and saw prices on the 280 – 370kg steers at $2160 – $2260. The 200 – 250kg calves where comfortably making $8/kg liveweight.

Justin Keane Corcoran & Parker, Wangaratta said there was little impact on breeder numbers through his area following the drought. Limited feed in autumn and a wet winter has seen calves slow to start however feed is really starting to perform now with some sun. Quality will be good but not as heavy as last year. Justin said his agency will have similar numbers of local weaners to last year although previous sale performance has seen interest appearing from other areas to consign cattle which is an added bonus for buyers attending. Justin also commented that the cow market softened a little this week however this may also be due to a short week with Melbourne cup holiday.

Adam Mountjoy, South East Region Livestock Lead, Nutrien Ag Solutions With outstanding conditions and a kind winter in the North Eastern region of Victoria we anticipate high weights and excellent quality lines of weaners for our upcoming January weaner sales. Western Victorian producers have had a tougher time throughout the winter with a tight start however 40-80mm of rain in storm events this week has set up the western district for a perfect end to 2021 which should culminate into high weights and excellent conditions as we approach January. Markets are obviously brilliant at the moment with 250kg calves commanding $8 per kg plus, however with confidence high and the ability for cheap and easy weight gain from now onwards producers are content to hold and let their genetics perform to gain weight and value as January approaches

Matt Tinkler, Elders Zone Livestock Manager South (VIC/RIV) The majority of these sales will follow the traditional program commencing in the first two weeks of January in the North East and the Western District of Victoria.

The past two years have seen outstanding seasonal conditions throughout the Victorian cattle breeding regions. This has given breeders confidence to continue and in some cases expand their breeding programs. Forecast numbers for these weaner sales are on track to be similar to last year, however with the confidence of past seasons some producers are opting to retain and join some more heifers.

The majority of the calves offered will range between 300-450kg. The EU accredited and Grass-fed program suitable cattle being offered are well suited to the various processor assurance programs. Matt also mentioned they have been working with many producers to assist with weaning and vaccinating with Bovilis MH + IBR to further support the growing confidence and integrity of the industry.

Sales locations, dates and estimated numbers will be released in the coming weeks throughout print and social media platforms. All agents are only to happy to field any questions,

Market forecasting. The pricing dynamic has left many of us behind with values improving and contracts appearing in periods not seen before. To me the ECYI is just another trend indicator which I thought would be settling back to 900 – 930 cents by now. Even with a raft of information available from much smarter than me I have missed by 150 cents as the demand continues and the numbers shorten. The QLD southern downs flatback feeders 370kg – 500kg have held values at $4.80 – $4.90 for the last 3 weeks however in the last week they have jumped to $5.10 and the odd a bit higher. Commodity reporting company Argus Media has developed a flatback feeder report for the southern darling downs centred on Dalby. Argus flatback report.

Throwing my forecasting thoughts out the door I can only suggest continuing to utilise your feed, make every post a winner and enjoy the ride. Perhaps the numbers hole we have talked about for so many years is really here..

Electronic sale platforms are now part of main stream livestock marketing – COVID has embedded using computer based platforms into a vast array of commodity sales. Starting in the 80’s with the very first in the world, CALM (Computer Aided livestock Marketing) to now be some of the largest companies on the stock exchange. The original Auctions plus platform all those years ago had the potential to be Ebay with some forward thinking I suppose. Opportunity favours the brave and the A+ evolution continues with Angus Street at the wheel with volumes that 10 years ago would have been considered fantasy.

Volume provides safety for IT based platforms but innovation is moving very quickly to provide additional opportunity. New player Farmgate Auctions is developing its offering with a very easy online sale system. Recently joining with Farmbuy to expand their value proposition as another player in this important sale method for rural Australia.

Anthony and Gerda Glasson principles of Picarilli Merinos from Thargomindah were delighted by the solid support from buyers at the stud’s inaugural on property and online interfaced ram sale on 21 October with Farmgate.

Opportunities

• Use current prices to reduce the age of your cows and ewes.
• Merino lambs to trade into March April
• Adding extra weight with season in your favour
• Free up some working capital by cash flowing your livestock with StockCo
• Fine tune your livestock program and lift survivability of lambs and calves
• Continue to use forward pricing to lift your sale average

StockCo invoice trends for October. This shows a combined average invoice value from clients using the StockCo Breeder and Trading facilities from across Australia.