Weaner market on bull's run

Store weaners hit 261 cents a kilogram at Boyanup last Wednesday and industry sources say prices look set to continue well into the new year.

Large drafts of cattle have left WA in the last three months headed across the border where the demand for cattle is currently exceeding supply.

This, grouped with competition from live exporters and local grazier and lotfeeder support, has pushed store cattle prices to levels unseen for many years.

And with rain continuing to fall across NSW and Victoria this week, more and more crops could go unharvested, prompting those producers to look at ways of recouping some costs by turning livestock onto them. The question is - where will those livestock come from?

In a stark contrast to store cattle sales in November, where eastern States buyers dominated much of the bidding, the last two Boyanup sales have seen a noticeable drop-off of buying support from across the border.

But their earlier competition added to live export and local feedlot and grazier competition has seen WA prices now reach eastern States levels, making it almost unviable for trucking across the border.

At a sale in Wodonga last Thursday, 250-kilogram calves made $600 or 240c/kg, while heavier (370-380kg) calves sold for $760-$770 a head.

Prices at Boyanup for lighter cattle have consistently been sitting around the 220c/kg to 240c/kg mark.

Albury livestock agent, Michael Unthank, said while there was still strong demand for cattle in Victoria and NSW, prices in WA would probably prevent eastern States graziers heading to the east to buy weaners.

"You guys have caught up with us pricewise now and the gap is pretty much closed," Mr Unthank said.

"Demand is still very strong, but I am not sure where the cattle are going to come from.

"We had a sale last Thursday where 2000 cattle were yarded and such was the demand we probably could have sold 10 times that many."

Mr Unthank said best weaners (370-380kg) at that sale made $760-$770 a head, while lighter, rougher calves of 250kg were making $600.

He said the massive amount of rain had caused pastures to become waterlogged and a lot of them were turning rank and rotten.

"Having said that, there are still some areas that have a large amount of good feed and added to this, some graingrowers have given up even putting the header into crops - they are just too wet," he said.

"I don't think cattle prices will go much higher than where they are at now though, the peak has been reached over here."

Elders western zone livestock manager, Paul Mahony, said on a local level, inquiry for feeder cattle was still very strong from the live export and lotfeeding sectors, for both steers and heifers mainly in the 230kg-350kg range.

Mr Mahony said higher saleyard prices, particularly for weaner cattle, had put the WA market more on par with the east, but demand was still coming from across the border.

"The demand from the east is still very much there and we've just started to see a strengthening in inquiry for pregnancy-tested-in-calf (PTIC) cattle," Mr Mahony said.

"There's certainly good strong inquiry from the eastern States on the same types of cattle that are in high demand from the live exporters and feeders locally, but there is also quite a diverse range of inquiry coming from the east."

Mr Mahony said weaner cattle numbers were falling rapidly as a result of large sales at Mt Barker and Boyanup, and the impact would be felt in the period after Christmas.

While he was reluctant to suggest that the drop in numbers would see a further increase in saleyard prices, Mr Mahony said he believed prices would stay around their current levels.

"I think prices are very good now and the market will stay buoyant and strong," he said.

"The current prices of weaner cattle has shifted an emphasis back on producers breeding cattle with confidence, rather than running dry cattle.

"That's good for the industry, because you've got to have your breeders."

National Farmers Federation (NFF) president, Jock Laurie, said mixed farmers on the east coast might turn to livestock as a means of earning an income should water-damaged crops prove to be unharvestable.

Mr Laurie said all options needed to be assessed.

"Livestock are in short supply because of the impact of the drought, and it's going to take a while to get the numbers back up," he said.

"Already a million sheep have come over from WA, which is enduring a drought, and the focus now turns to cattle."

Mr Laurie said it may be an opportunity to get some return on failed crops.

"Any opportunities that are there, people in livestock will take into consideration," he said.

"If people can't get on their crops, maybe there is a chance there to utilise the grain that is there through feeding it to livestock - they'll have to make that decision once the rain has cleared up."

Mr Laurie said the sheep meat industry was buoyant, and along with positive signs in the cattle and wool sectors, it meant that the livestock complex as a whole was in a good position.

The rain means livestock producers will have access to dryland pastures virtually throughout the summer in areas that traditionally relied on feeding grain.

Grain crop stubbles will also be another strong source of feed.

Bridgetown cattle producer and chairman of the Producers' Roundtable, Mike Introvigne, said the cattle shortage would hit WA harder in autumn and winter.

"I am just not sure where the cattle are going to come from in those winter months, and I would think the processors are going to struggle to run at anywhere near full capacity," Mr Introvigne said.

"At the moment contract prices for grain-fed cattle are not high enough and there are some lotfeeders who are holding off signing contracts until they get a price increase."