Stock prices surge as rebuild begins

Stock prices surge as rebuild begins

Beef
FORWARD THINKING: Christine Comley, Ardno, Mount Gambier, and Thomas DeGaris & Clarkson's Hayden Lambert with some of the EU-accredited, PCAS-eligible Hereford steers that will be offered on AuctionsPlus tomorrow.

FORWARD THINKING: Christine Comley, Ardno, Mount Gambier, and Thomas DeGaris & Clarkson's Hayden Lambert with some of the EU-accredited, PCAS-eligible Hereford steers that will be offered on AuctionsPlus tomorrow.

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Insatiable eastern states demand has proven a windfall though for southern livestock sellers, although high prices are making it harder for those rebuilding flocks and herds.

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The drought is far from over in many pastoral areas of SA and western NSW, but for those starting to rebuild flocks and herds high livestock prices are making it harder to bounce back.

Insatiable eastern states demand has proven a windfall though for southern sellers with young Merino ewes making at least $100 more than 2019 and light steers soaring to $5.50/kg.

Elders Broken Hill, NSW, branch manager Ben Finch estimates in the past three years, about 80 per cent of the livestock in the area have been offloaded, but says a small percentage of properties, especially those with flood out country, were starting to recover.

"Some areas have feed that you couldn't buy enough cattle in Australia to eat but five kilometres away it is as bare as bare - it is just so patchy," he said.

In the past couple of months he has been in the market, including being volume buyer at the Naracoorte store cattle sale in April, taking nearly 200 young heifers averaging $3.67 a kilogram.

Related reading:Producers weigh up earlier calving to rebuild faster

He says they are adopting a range of strategies from providing agistment to short-term trades, but expects 2020 to be more of a breeding year than purchasing big numbers.

Mr Finch says access to cash to buy stock is a consideration, with financial products such as Stockco and Elders' new livestock trading facility important, but the biggest driver in decision-making was still seasonal outlook.

"It is not so much the worry of paying $5/kg for cattle but not having a plan B - we have a set period of time in which to do something with that animal while we know we have the feed in front of us," he said.

"It still worries people that a 600kg bullock could become a 500kg bullock in only six weeks if the feed disappears."

Mr Finch says some clients have been buying scanned-in-lamb ewes and station mated ewes and believes while prices are high there is still some upside in the sheep job in the next 12 to 24 months.

WA has been the main source of these ewes heading to Broken Hill, with several thousand a week being unloaded by Elders clients alone through May.

Related reading:Lamb production to fall as restocker demand lifts

He says the extra $15 to $20 freight is much less than the $40 to $50 premium needed to buy local ewes.

"As long as the truck is full it works, and a lot of time we are buying a bit of skin so they can get a return a bit quicker ," he said.

In the Eudunda area, which has been hit hard by drought, BM Livestock's Budgie Schiller says most producers are not in a position to begin restocking, especially with large kangaroo populations eating off any green pick.

But when they do begin, he says the high prices will "hold a lot of people back".

"It is a hard call - if and when we do get the rain, we are back to square one with the kangaroos and particularly if you are buying ewes for $200 to $300 you want plenty of feed and to be assured of carrying them on," he said.

He said those that had held onto core breeding stock would use these ewes to rebuild.

Price rise prompts southern sell-off

TDC's Hayden Lambert and Christine Comley, Ardno, Mount Gambier.

TDC's Hayden Lambert and Christine Comley, Ardno, Mount Gambier.

The flourishing cattle market and global political uncertainty are bringing many cattle onto the market which would normally be sold later in the year, according to Thomas DeGaris & Clarkson director Darren Maney.

But he says it is not just northern restockers that have driven the market up to sit at least $1 a kilogram liveweight higher than the same period in 2019, with major feedlotters also a driving force.

"Last week at Naracoorte (store cattle sale), a pen of 460kg Angus made $1968 before they put them on feed, so they must have the orders at the other end," he said.

"But we are hearing repeated reports that Australia has the dearest beef in the world, so you would be foolish to think today's prices will remain for the long-term."

One of his clients hoping to take advantage of buoyant prices is Ardno, Mount Gambier.

The Cleves and Comley families will offer 81 European Union-accredited Hereford and Angus steers on AuctionsPlus tomorrow (Friday).

"It is a good time to be in the beef industry," Ardno's Christine Comley said.

The majority of Ardno's steers are sold to Teys Charlton feedlot in Vic, with the family buying back the primal cuts for their award-winning restaurant, The Barn.

Buyers will have a rare opportunity to buy the youngest of the autumn 2019-drop Herefords weighing 332kg which were not sold earlier to the feedlot. Also on offer are two lines of spring 2019-drops.

TDC agent and AuctionsPlus assessor Hayden Lambert is expecting strong demand for the exceptionally well-bred cattle with an outstanding temperament.

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