Thursday, April 25, 2024

ACROSS THE RAILS: Many layers to strong Friesian bull market

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Four years ago, M bovis shook up our beef and dairy-beef industry. It had a significant impact on the number of dairy and dairy-beef calves reared as herds had to be killed, and other young stock also suffered the same fate. The calf rearing industry was changed forever it seems and four years on the repercussions are still being seen in the lack of two-year Friesian bulls available, though that is just the tip of the iceberg.
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Four years ago, M bovis shook up our beef and dairy-beef industry. It had a significant impact on the number of dairy and dairy-beef calves reared as herds had to be killed, and other young stock also suffered the same fate. The calf rearing industry was changed forever it seems and four years on the repercussions are still being seen in the lack of two-year Friesian bulls available, though that is just the tip of the iceberg.

A shortage of calves reared is really starting to hit home now and a very low supply of two-year Friesian bulls is causing ructions in the marketplace. Couple that with drought forcing some to be killed at lower weights and we have reached a situation where Friesian bulls are a hot commodity, for which there is no short-term fix.

Currently, North and South Island schedule prices are $6.20-$6.30/kgCW and $5.85-$6.00/kgCW respectively. The flow-on effect of those strong prices and low supply has meant that at auction Friesian bulls that fall in the popular range of 420-520kg have been trading at $3.25-$3.35/kg, though some have gone higher. Any lines that tick the boxes on tally size, lack of horns and condition, for example, are subjected to bidding from several different corners. On top of those farmers buying bulls to finish, an extra layer of demand is added from dairy farmers looking for service bulls, which mainly adds more competition to the heavier-end bulls. 

Looking back at AgriHQ historical data for September, this year’s average two-year Friesian bull price is 76c/kg up on 10 years ago, 27c/kg on the five-year average and 43c/kg on last year’s, which was relative to much lower schedule of $5.15/kgCW in the South Island and $5.60/kgCW in the North Island.

In the short term, auction prices are expected to at least hold at the current record levels, if not continue to improve, especially as more regions hit maximum spring grass growth. And if buyers want to stay in the market, they may need to be prepared to do battle with flexible budgets to secure what they need.

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