Wednesday, April 24, 2024

Eastern farmers offload to meet El Niño

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Weather system already blowing through the saleyards as farmers plan for a long dry summer.
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It feels very much like the east coast of the North Island has jumped out of the pool and into the fire as a potentially long dry summer lies ahead. After such a wet start to the year, pastures are drier now than they have been in a long time, and, ironically, rain is needed. 

El Niño has been officially announced, though it was obvious that the country was on a slippery slope to that weather system. 

Eastern and lower North Island farmers have been quick to respond after learning from past experience and the store cattle markets have come alive as annual spring trading combines with many farmers pushing the offload button.

Saleyards in the firing line of El Niño have been busier than normal. In the week starting September 11, 4500 store cattle went through Stortford Lodge, Feilding and Wairoa alone. Wairoa had not held a spring cattle sale since 2019 but an influx of entries and a capacity yarding at their usual destination of Stortford Lodge meant that the need was met. 

The following week there was a big offering at Stortford Lodge again, bucking the usual trend of large fortnightly sales. Feilding also shut its books on Tuesday for the upcoming Friday sale as tallies flew past 2000-head. 

In contrast, volume at saleyards on the western side of the North Island and into the South Island are much closer to normal or below, which is both a sign of limited need to offload as well as fewer dairy-beef cattle to trade. 

The first two weeks of September were good for North Island store cattle sellers as buyers rolled up their sleeves and got stuck in. For yearling traditional steers, weights on average were similar to last year at 273kg and though the strong dollar value results couldn’t be met, the market was still very pleasing at an average of $3.78/kg. 

That level fell comfortably within the range for prices paid since 2016 when prices took a sharp incline and have remained there. Yearling dairy-beef steers bettered last year’s average price of $3.47/kg for 257kg, to $3.53/kg for the same weight. This class was the only one to do so and reflected the lower volume of stock available. 

The 2-year steer market followed the same trend as the younger traditional steers. The extreme price levels of a $3.60/kg average for 2-year traditional steers last year could not be matched, but the $3.39/kg achieved was very respectable in the first two weeks of the month. An average of $3.19/kg was achieved for 2-year dairy-beef steers. 

Trading in the South Island is a few weeks behind the north and for the first two weeks prices for 2-year traditional steers, and yearling and 2-year dairy-beef steers, have been 14-24c/kg on average behind North Island levels. The biggest deficit is for yearling traditional steers, which are 42c/kg behind, though there will be plenty more in the South Island to come through the system yet.

However, the latest sale at Stortford Lodge is not included in this data and there was a noted correction to the market as local farmers offload in preparation for a dry summer and therefore local demand was also limited. The success of that sale relied heavily on outside support and it was there, from Waikato, King Country and Manawatū, but without the local demand to underpin prices did come back. 

Two-year traditional steers eased on average 14c/kg and yearlings steers 17c/kg, though lighter lines dropped more significantly. And it looks like that downward trend will continue as the influx of cattle to eastern North Island yards continues. 

Western saleyards in the North Island are in more of a comfortable trading pattern as they benefit from an El Niño weather pattern. Last year’s spring market will be near-on impossible to beat as it was the strongest on record but at Frankton, 2-year dairy-beef steers did start September able to match them but have now settled at an average of $3.15-$3.20/kg, which is on par with 2021 levels. 

Yearling dairy-beef steers followed a similar pattern, starting strong and settling at an average of $3.49-$3.57/kg. It is likely that this market will be able to maintain those levels given potentially lower supply and good growth. 

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