Saturday, December 2, 2023

Good grazing keeps cull cows out of works

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Farmers awash in good pasture covers outbid meat companies.
Data modelling by Figured shows the effect the fall in the forecast milk price will have on New Zealand dairy farm debt levels.
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Aged dairy cow grazing is in strong demand in the North Island as farmers with good pasture covers and surplus stocking room outbid the meat companies.

At recent North Island livestock sales, cull-for-age cows have made $1.65/kgLW, around $4.10/kg CW equivalent, when the meat company schedules are around $3.80/kg.

The cull cow processing figures in the North Island are lagging well behind last year’s as feed levels are high and farmers are under no pressure to consign to slaughter.

Dairy farmers in the north may be pushing on through May before drying off because the forecast milk price for this season is expected to be higher than next season’s, and they have the feed and warmer weather to keep milking.

The opposite was true in the South Island, where weekly kill figures have been 65% above last year through the first half of autumn, which was a covid-impacted period, AgriHQ senior analyst Mel Croad said.

The historical pattern in the south between week one in March and mid-April was 10,000 head a week, but this year those tallies reached close to 15,000.

Dry conditions and high empty rates may have contributed to the early rush, she said.

In the north, processors are beginning to warn that cull cow consignments should not be left too late.

“There is definitely a premium being paid for cows to be grazed over winter and sent to processing later in the year,” she said.

The South Island premium in the yards over the current slaughter schedules is higher than in the north. The SI schedule average is $3.45. The average price in the Canterbury yards was $1.73/kgLW.

Prices in the South Island yards are 25-30c/kgLW ahead of where they were last year.

NZ Farmers Livestock has sent out emails to farmers headed “Strong demand for paddock cows at the saleyards far exceeds works value and no waiting for space”.

Waikato agent Gareth Price said good pasture conditions have opened the door to grazing paddock cows over winter in the expectation that will deliver a margin from schedule prices for manufacturing cows in the spring, based on overseas lean beef demand.

“With a shortage of store cattle, boner cows are available now and buyers at Frankton are targeting Friesian, Friesian-cross dried off cows from 420 to 550kg LW.

“These are selling around $1.65/kg LW and would currently be end-of-season condition, around 37-39% yield.
“Grazing over winter may not put on a lot of weight but it will improve body condition to 43-45% yield and provide a useful return for the short-term option.”

Danny Hailes, general manager livestock and shareholder services at Alliance Group, confirmed the paddock cow trend.

“We are seeing a greater volume of cows being sold on a liveweight basis and grazed at this time of year due to the abundant feed, meaning lower volumes of cull cows available for processing currently.

“As a result, we are anticipating increased numbers of cull cows being booked in for processing over June and July.”

During the meat company season from October to September, the five-year average tally for cull cows is just over 1 million head. 

With the covid disruptions to processing last year, only 965,000 were killed and this year to April 15 the tally was 435,000.

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