News

Chris Howie: Biosecurity wake up call

Stockco business development manager Chris Howie., July 6, 2022

THE Varroa mite incursion (search on the internet for more info) in bees is a prime example of what an FMD notification will do to our livestock industry. The government has activated its plan and beekeepers are already having hives destroyed in the Newcastle area. In turn the Newcastle population are being asked to notify any feral swarms they are aware of. Treating bees as small livestock you can very quickly see the complexity of controlling an exotic outbreak with the potential to destroy an industry. A bee standstill is in place right on the time when hives are transferred to orchards for pollination so the knock-on effect magnifies the impact.

Chris Howie offers his perspective on market trends and opportunities 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.

Once inside country an exotic disease control is only as strong as the weakest link. As we have seen in Indonesia the notification quickly raced through social media and many small farmers moved livestock to try and beat any government control protocols. This in turn accelerated the spread to the level it is now – we cannot let this happen in Australia.

Livestock measurement

The recent article Changing the metric to aid improvement on farm in Beef Central really appealed to me. I have been pushing for years the need for producers to measure livestock turnoff in kilograms. This in turn allows productivity levers and switches to be flicked – starting with genetics all the way through feed conversion to target marketing. With interest rates starting to rise this methodology becomes more important than ever and it is a great time of the year in the south to start your base line information collection.

Sheep and Lambs

We have hit the time of year where lamb pricing volatility appears. Just when many thought the prices may start to lift a correction of about 40 cents per kg appeared at the end of June. It seems this year we have numerous moving parts in the livestock industry impacting price that are well out of producer or agent control. Staff shortage creating processing and export difficulties, non-performance in a wet spring with lambs held till autumn, numbers being held until the new tax year, slowed weight gains because of continued wet, scheduled processor maintenance shutdowns and the raft of normal hurdles.

A major influence has been the lack of bagged lamb orders which in the past have absorbed 100’s of 1000’s of 14 – 16 kg off type lambs. COVID and limited airfreight saw this very important component over the previous 10 years evaporate and is yet to re-emerge. These are now feeding back into the lamb supply creating an out of season supply.

Mick Curtis, NE Victoria livestock for Rodwells gave me a bit of an update on pricing whilst having a spot of leave. Early contracts are being delivered at $8.20 – $8.40. Spot market is ranging from $7.40 to $8.00 with quality and type important. Secondary types and those with too much wool range from $6.50 – $7.50. Mick said the lambing % are good in his patch and early suckers from August on will have a lot of quality.

Reading the play is always difficult around June because many producers only have one sell off per year. In most cases thinking about why something happens doesn’t come front of mind until you are nearly ready to sell. Again this falls back to a lack of setting a marketing strategy well in advance. My thoughts on lamb are we have another 3 weeks of this supply and pricing window and then it will reset on new season supply and quality.

The forward contracts offered two months ago by processors to secure supply into winter may not have appealed to some, but many did take the opportunity. Looking at the current grid levels they are very happy with the results. However with the spot market price being impacted by the issues noted above and a significant amount of processor supply already locked in the price was always destined to have a bit of a check.

Will this check happen next year you ask? I suggest it will on the back of a much larger lamb marking than we have seen in over 5 years. When it happens will be determined by a dry spring or a green spring. In a normal year it happens in March /April because the season dictates you must sell.

What about late July onwards? Draft early and draft hard on the tops of your sucker lambs. Get your CFA ewes shorn and gone remembering last year a lot of “old girls” were kept to get another lamb – Most of these wont handle another lap due to age and teeth.

Lamb burger – for years we have heard about beef burgers but I was excited to see this new add put up by TFI US to celebrate National Onion Ring day on FB. I reckon this burger would be an absolute winner in Australia.

Goats

Having covered a big piece of the Australian goat breeding pastoral areas in June I will state simply “When it gets dry there will be plenty” The feral population is very health with goats in excellent order, kids everywhere and no reason to come to watering points and be trapped in areas like the Flinders ranges. I fully expect goat to be in strong demand with the various investments being made however come summer the supply and demand pricing will kick in putting a brake on the long period of excellent prices.

Speaking to Gus Foote Nutrien Charleville – who I consider the best free range goat agent in Australia. “The female demand is driven by Western NSW & WQLD with young nannies ranging from $100 – $130 however demand stops very quickly when it gets dry. Current rates for smaller skin on goats are around $9 with the heavier skin off at $8.70.” Gus went onto say “it is the summer overseas and we normally see goat prices ease now and start to strengthen around October when the soup, stew and curry season starts.” Although he agrees this years supply of light young goats when they appear will put pricing pressure on. One thing Gus did point out was the growing domestic demand for lighter backgrounding billies. Recently he sold a good run of 23kg liveweight models into the south at $130 to be fed on for metropolitan supply.

Cattle

It has taken a while but we are now seeing the EYCI slide following the feeder values down. The good part is this has been a gradual winding off not a cliff drop. Secondary cattle are starting to take quality discounts in saleyards and A+ with weight gain opportunity now becoming a real focus versus how many head you can buy.

The recent supermarket strategy reset for beef has also put a ripple through confidence on those feeding into supplementary contracts. More grass cattle are being purchased which is a no brainer with the amount of grass and crop available. I can not see many issues with this model in the near future however when grass becomes short into summer quality can struggle which will see a supply hole appear from feeders and a reliance on boxed product.

PTIC heifers have seen the biggest change with the $2200 models settling back to $1700 – $1800. July is always the time in the south to hunt value for money females (Sheep and cattle) or plainer animals that can stack weight in the spring.

Feedlot supply A week is a short time in livestock. Last week there was a 3 – 5 week waiting window for feeder entry with prices easing to $5.05 – $5.25 in Southern Queensland. This unseasonal rain has seen some feedlots already ringing clients and agents to see what is available – swings and roundabouts.

Alice Springs show sale

With the increase in regional airfares I decided to drive to Alice Springs for the Show sale. The season from Port Augusta to Alice is fantastic with fat cattle and sheep all the way. The country looks soft with an abundance of herbage and grass. A great couple of days catching up with agents, producers, feedlotters, processors, carriers and even the winner of the Finke desert race David Walsh – Motor bike.

Sale Report just under 4000. All cattle presented in good forward store to forward condition with plenty of frame. Drafting presentation by the conducting agents Elders, Red Centre Rural, GDL, ProStock and Eagleson & Co was outstanding

Buyer support from NT, SA, QLD, NSW and the first A+ interface for this feature sale.

Feedlots represented were TFI, Princess Royal, Conargo, HB Rural, Coolalie, Scott Creek agency.

Several large pastoral orders in play with Elders Katherine & Alice Springs, GDL Dalby and Sandover Pastoral Co. A large crowd with many orders not activated as prices were consistently above the current feeder and backgrounding rates in the east.

Staff

Over the last couple of months the volume of discussion about availability of staff has become much louder. From producer, agent, feedlot, processor, and all parts of the supply chain finding good staff has become an issue. One feedlot I spoke too has capped its numbers significantly under its capacity because of staff availability.

As a suggestion to any potential employer in our industry, make sure you explain what the career pathway looks like if a potential job seeker is using the job you are offering as a starting point. Times have changed and many want to know what success looks like before becoming engaged in the job itself. For those looking for a job for themselves or their kids – have an idea of where you want to end up before applying, it makes the interview a lot easier.

Mid year tip – Negative price movements. Getting caught chasing a falling market down always ends poorly. Whether you are a producer or an Agent be decisive in your decision. If the market is slipping or the weather has turned hot and windy don’t value on today’s rate. Set your price on where it will be in 5 or 7 days time – especially if the stock need to go. Many have lost a lot of money because they wanted that extra $5 or $10.

Opportunities

  • Don’t let interest rate and easing prices scare you – work out the margins
  • PTIC and SIL Females are good buying now
  • Start setting up for the August supply period
  • Get your trading facility in place – lots of opportunity this spring
  • Buy ewes early and feed hay – you have plenty and its cheap
  • Measure performance – Others are.
  • Get some money on Geelong

 

 

 

 

 

HAVE YOUR SAY

Your email address will not be published.

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

Get Sheep Central's news headlines emailed to you -
FREE!