The Temuka sale yards is the home of cull dairy cows and it was packed to capacity this week, as a record yarding of nearly 1200 head were penned. Despite the spike in supply, they were met by plenty of buying interest and, as a perfect storm was created, the market lifted 12c/kg.
The main culprit of the significant increase in volume was offloads from dairy farms as June 1 fast approaches and PGG Wrightson dairy livestock manager Barry Fox was on-hand as the influx hit.
“Many farmers have been taking advantage of the high milk payouts and carried on milking higher numbers while they could,” Fox said.
“Also, we saw a wash-out from herd sales as Moving Day is not far away and that meant farmers were making their final selections for herds.”
While a small percentage of the cattle were penned the previous night, most came in on the Monday sale day and arrived from 7.30am to 10.30am. Typically, lines are drafted down and pens of two or three head are common, but in order to fit in all the stock, line sizes of seven to eight were required.
The total yarding was 1370 head, yet cows accounted for 87% of that tally.
While the throughput of cull dairy cows is high at this time of year, it was the sudden influx that was the surprise.
“The volume of cows coming into the yards is very similar each year, but this year we have seen a few more head due to tight space at the processors, and farmers have waited to sell and that has caused the bottleneck we have now,” he said.
“We had quite a few come through in February, but it has been relatively quiet until the last few weeks. It will simply extend the kill season, which was going to be the case anyway as the processors work through the backlog.”
Regarding the strong market, Fox said it was a welcome anomaly.
“There is now contract pricing out for July to August and that has given buyers some clarity to budget on,” he said.
“And it looks good – $4.80-$5.50/kg CW for manufacturing cow is great. We also had buyers who are already signed up to these contracts, who are taking the opportunity to put cows away in paddocks until the contract period kicks in. To be fair though, the market did go the opposite way to what we expected so it was a great result.”
The auction pricing itself was very simple – heavier lines or those in better condition were able to reach $1.66-$1.70/kg, though most sold for $1.60-$1.65/kg.
All sold in excess of $1.50/kg and Friesian and Friesian-cross cows averaged out at $1.62/kg, up 12c/kg on the previous week.
At that level there is already a price advantage of 26-35c/kg on 2021, with lighter cows the benefactors of the higher increase.
Cull dairy cows sold at Temuka on average make a premium over other yards and at North Island yards with significant supply values of $1.35-$1.45/kg have been common.
Looking ahead to the next sale, Fox was unsure about what to expect.
“We will know by the Friday before where numbers will be at. But with so much demand, if the cull cows are still around they should be coming through the yards. Time will tell,” he said.
This article was written by AgriHQ analyst Suz Bremner. Suz leads the AgriHQ LivestockEye team, including data collectors who are tasked with being on the ground at sale yards throughout the country. Read more about the yards AgriHQ covers in their LivestockEye reports here
