Breeders and vendors of two-year-old beef bulls and their livestock agents will be full of optimism for the sales season ahead, based on high beef prices and good, widespread bull condition.
Six weeks of on-farm bull sales begin at the end of May with favourable indicators for demand and prices.
Export returns for beef since the start of the year are the highest ever recorded, slightly over $10/kg fob after processing and packing.
Shipping disruptions have redirected beef exports away from China and towards the United States, Southeast Asia and Europe, but all markets are showing strong demand signals.
Prime beef schedule prices are $6/kg in the North Island and $5.85/kg in the South Island, both about 16% higher than this time last year and 13% higher than the five-year average.
AgriHQ senior beef analyst Mel Croad said these price levels are at the top of the market, somewhat unexpected for this time of the season, and remarkably stable.
“Farmers who have been delayed in slaughtering consignments can take comfort in the stability of these high returns,” she said.
Normally beef schedules peak in November but this season they kept rising through December and January and have remained high.
Schedules are starting to reflect the benefit of a falling NZ dollar, which is another unexpected positive in times of high commodity prices.
PGG Wrightson national genetics manager and auctioneer Callum Stewart said the demand for bulls should result in repeats of the good prices paid last year.
“The returns for livestock are very favourable right now and buyers should be prepared to pay more for better genetics.
“The bull offerings we have seen look exceptional after the very good growing season in most regions.”
Carrfields stud stock agent Tom Suttor, in Hawke’s Bay, said top quality bulls will always sell and the East Coast has enjoyed a very good season.
“The old story; good lamb prices buy bulls.”
Farmers should be prepared to turnover their bulls at younger ages to bring in in sharper genetics.
“Farms with delayed slaughtering consignments can take comfort in price stability.”
Mel Croad
AgriHQ
The loss of sheep and beef farms to forestry was cutting into the demand volume for bulls but Angus and Hereford have held on well compared with some other breeds.
“All the signals are positive and I expect that bull sales will go well, with the ones I have seen in very good order.”
Croad said the export beef picture was as good as it gets before larger volumes coming to market from Australia in the second half of the year.
For the past 18 months Australian farmers have been rebuilding their herds and that country’s monthly export tonnages have consistently been 20,000 tonnes or 25% below the five-year averages.
“Perhaps the global shipping issues are underpinning these high commodity prices and we can’t say when things will change.
“Right now, this looks like the year that bull prices should be high.
“If buyers go for quality genetics, even if finished cattle prices come back a bit, they still will produce higher quality outputs.
“It is always the lower quality that is hard to sell when the market is weaker.”
