As we cruised through spring and this season’s crop of calves were hitting the ground, it was hard to believe that forecasters’ warnings of a dry summer caused by El Niño would come to pass.
In hindsight, the excess of feed was also a warning. As many will say, nature always provides and if there is surplus at one point, you will need it later.
It was February 9 when the first beef calves from Seddon started heading north to the Feilding saleyards. Larger groups made the trip in the following two weeks. This was just the start of the trend that saw multiple, early, uncalendared sales throughout the South Island held to relieve the pressure.
These early sales often produce strong results and Joe Higgins, Mid South Canterbury Livestock Manager for PGG Wrightson, expected it to only be downhill from there, especially as the dry held on.
It has been a pleasant surprise, then, to see the market rebound slightly through the middle of the season.
It would be fair to assume that the early sales would have poached numbers from further sales to produce an overall similar number of calves. This has not eventuated, and Higgins puts this down to the dry, too.
For those who would usually hold onto calves through winter and sell on the spring market, a lack of feed has wiped this from the plans.
“There seemed to be more heifers come out too” Higgins said, “because they don’t have the feed to cart them through.”
While this is the main driver, in a tough economic climate the need for some cashflow also contributed.
Looking at Coalgate, Canterbury Park and Temuka, the current running total plus last years’ tallies for the two High Country calf sales to come, the final number will look something like 18,500-head just at these three yards. This is 4000-head above last year’s total.
It is worth noting that some normal vendors of the Coalgate High Country calf sale sold earlier due to the dry conditions.
The beauty of the beef cow is that even under trying conditions she is good at feeding her calves. There has been some decline in the average weight in the yards, but this is to be expected, especially in comparison to the good growing season last year.
Higgins noted that this was particularly noticeable at the top end of well-known annual consignments. He pointed out that by the same token “we can’t expect weights to keep going up each year either”.
Looking at Angus steers and heifers as a benchmark, average weights for steers are back just 5kg to 220kg and heifers slightly more at 197kg, 10kg lighter.
All these extra calves hitting the market in a tough season for grass was never going to have a positive impact on returns. Across the South Island, Angus steer calves have averaged $813, or $3.70/kg. This is back $82 and 28c/kg on last year.
In the heifer camp, the average return is $579, which is back a massive $115 on last year and shows the impact of increased supply. On a per kilogram basis, this comes out at $2.94/kg, back 42c/kg on 2023.
A lot of this comes down to demand, and where it is coming from.
There has been some buying power from Southland, though on a small scale. An Invercargill-based buyer took a selection of calves home from Canterbury Park last week.
It is common knowledge that North Island buyers have played a very active role in calf sales, more so than in previous years. The contrast in schedules, feed and moisture between the north and the south is the driver for this.
Last Wednesday at Temuka’s Fairlie Basin sale there were three North Island buyers underpinning the market. While price is a major factor, Higgins commented that “they seem to like our calves for whatever reason”.
The consensus among vendors and agents is that they are very grateful for this support and without it our South Island beef breeders would be hurting, significantly more than they already are.
This article was written by AgriHQ analyst Fiona Quarrie. Subscribe to AgriHQ reports here.
