Analyst Intel

28 May 2019

ACROSS THE RAILS: Store cattle but not lamb buyers wary

BySuz BremnerSuz Bremner

The weather lately will be putting people outside farming in good spirits, with endless sunny days and mild day temperatures keeping the winter wolf from the door.

While it makes for pleasant on-farm work conditions each day of clear blue skies brings mounting concern and murmurs of an autumn drought along the east coast are now becoming reality. In the Kaweka Ranges foothills, the last significant rainfall we had was in late February with only intermittent amounts since then. April recorded just 16mm and while that is localized to our area many others along the east coast of both islands are in the same boat.

The lack of rain is having varied effects on store markets. Store cattle have not had the easiest time this year and that adds insult to injury. Buyers are already approaching the market with caution with ongoing concerns about Mycoplasma bovis and tight margins made in previous years are now rolling out to constricted budgets for today’s cattle. Add tight feed levels because of very dry conditions causing a need to offload stock and you can see the dilemma. Demand for store cattle typically drops at this time of year anyway and in response the sales usually shut up shop, moving into winter mode as far as volume goes. However, some farmers need to offload and they have to meet the market set by a very limited buying bench. There is always an exception to every rule and in this case, it is the better-bred traditional cattle that seem to attract premium prices at any time.

Store lamb prices so far seem immune, with enough buyers to absorb them on a very competitive market despite good volumes. Lambing is sneaking up fast in the North Island and ewes must take priority, which means even short-term lambs are being offloaded to the yards as precious feed is reserved for the ewes. Buyers are not out of pocket though as auction prices are very competitive with processor values.