Huge numbers of stock at Australia’s largest saleyards defies talk of cattle shortage
Fierce competition from cattle buyers has seen records tumble at the Roma saleyards, Australia’s largest selling centre.
More than 10,600 head of cattle were yarded on Tuesday, with large lines of weaner steers and heifers doubling the numbers of the previous week.
A large consignment of 500 Angus-cross steers from Injune sold to a high of $4.08 per kilogram, returning more than $1,200 per head.
Heifers from the same vendors topped at $4.04 per kilogram, with buyers coming from as far as South Australia to secure the stock.
Strong prices eclipse expectations
Roma-based livestock agent Brad Neven said the result defied expectations.
“The market is on fire, very strong.”
“Four years of drought and major sell-off has done this. It’s created a critical shortage of suitable cattle.”
Heavier feeder steers to 500kg made up to $3.50 per kilogram.
“It’s a re-stockers nightmare … there’s very limited numbers of young breeder types being sold,” Mr Neven said.
“There’s going to be some dollars at the top end of the market if you want to buy the better end of the breeders.”
Fellow agent Cyril Close described the sale as a “one-hit-wonder” because the sector had continually been talking about an industry-wide shortage of cattle.
He said the cattle had been sourced from around the district, adding that the really big lines of above 200 head of cattle really set Roma apart from other saleyards.
“There’s a bit of rain around and crops are out of the ground — not being fed yet but not far off it — and there’s a good outlook for spring,” Mr Close said.
He said while there was such strong competition, it would push profit margins to the limit.
“They’re going to compete on those and, I suppose, take what comes out the other end, but we know there’s probably a bit of burnout the other end, at this stage.
Lot feeders and processors feel margin squeeze
Cattle marketer James McLean from Allied Beef in Toowoomba said it was a “fascinating” time for the industry.
“It’s a very exciting for breeders; cattle traders and lot feeders certainly find times like this a lot more difficult,” he said.
“The individual participants in the industry have to maximise the opportunities when they are presented.”
“I think we’ve got some good times in front of us, [it’s just] whether the market can sustain the premiums that are being paid today over and above global markets.”
Processors are also feeling the pinch, with the high Australian dollar adding to further cost pressures in an industry that is predominately export focussed.
The benchmark Eastern Young Cattle Indicator has continued to soar to record highs in recent weeks, reaching $6.60 per kilogram carcase weight on Monday.
Article published on ABC Rural 5/7/16, find the article here>