Year: 2021

The property boom – what it means for farmers

Posted on by Caitlin Dearden

Victoria, and the wider country in general, is currently experiencing a boom in rural property values.

Favourable conditions for both livestock and grains across most production regions has contributed to increasing prices for agricultural land. Good seasons accompanied by good prices tend to be a rare occurrence in agriculture, but for now it appears the stars are aligned for producers.

2020, generally speaking, was a good year in terms of domestic agriculture. Winter crop yields were good and prices held, thanks to demand for grain from other parts of the world. Throughout the first year of the COVID pandemic, the Australian agricultural industry managed to stay strong – demonstrating supply chain resilience in the face of disruptions to both demand and supply elsewhere in the world. Overseas demand for grain, lamb and beef exports kept prices high, with Australian produce able to fill some of the gaps created through disruption to other supply chains. This situation has led to an increase in confidence locally, and over the last six months lamb prices have gone through the roof – in some areas, almost doubling on a per-acre return basis.

All of this growth is great news if you’re thinking about selling your farm – you’re selling into a hot market. However, for younger farmers starting out – and even mid-level farmers who are already somewhat established – these high land-prices are limiting their ability to expand and grow their business. Even if they’re able to access the capital required to make a property purchase, the challenge of sourcing sufficient working capital to operate still remains. For new entrants or expanding livestock producers, StockCo can assist as a source of funding for your herd or flock.

StockCo’s approach to providing finance is different to conventional agricultural lending. Often, producers find themselves financially constrained due to insufficient equity in real estate to access additional funding. StockCo finance is secured by the livestock itself, which for many producers means access to the funding they need to expand their operation, without impacting their relationship or leverage with their existing farm financier. This innovative approach allows StockCo facilities to sit alongside other finance arrangements, whilst providing valuable capital to grow productive capacity.

Regional Round-Up

Posted on by Caitlin Dearden

Welcome to the very first instalment of our regional round-up – StockCo’s monthly chance for you to find out exactly what’s going on in the livestock industry across Australia.

National overview – Chris Howie
Victoria and New South Wales are currently in a great feed position – if another rain rolls through they’ll have a green summer. Queensland, on the other hand, could do with more rain in parts, and South Australia and Western Australia have seen rain ruin a lot of dry feed. This means they’ll be looking at feeding earlier than usual. Overall the national outlook is very positive compared to this time last year, when lots of areas were still enduring three years of drought.Due to limited supply, cattle pricing is currently at an all-time record high, with sheep and lamb holding at about normal levels and predicted to move upwards in the next six weeks. We’re seeing an increase in producers realising how much equity is tied up in their livestock – they can use that money to pay their debt down or manage new projects within their business. This is a great opportunity for producers – and in general, it’s an optimistic time for the industry.

 

Queensland – Angus Creedon
The predicted La Nina deluge is resulting in a real mix of conditions across Queensland right now, and on the whole the state is quite dry.  Queensland does tend to get rain into March and April, however, so we’re still hopeful for more.Right now, some areas are receiving great rains and are buying stock, whereas others are seeing patchier results and having to sell.New South Wales is taking stock into that part of the world – and that demand means cattle prices are still great, as currently the national herd is still the lowest it’s been since the 60s.Finally, we’re really looking forward to Beef Week 2021 in Rockhampton in May – it’s going to be a great chance to catch up with customers and friends across the industry.

 

NSW – Toby Hammond
Right now in NSW the weather conditions are very favourable, with lots of rainfall in late January and early February, and farmers are now hoping for rain in March to set them up for a really good autumn. Cattle and lamb prices are both holding strong, so those with grass and livestock are in a good position.Currently producers are planting their winter grazing crops – meaning there’s potential for trade further down the track, when the crops are established. Overall it’s a really positive time for producers in New South Wales, and we’re very optimistic about the coming months.

 

Victoria – Michael Phelan
Here in Victoria, there’s a lot of supplementary feeding going on – the summer rainfall has been a mixed bag but generally good, and overall it’s been a mild summer in which some areas have been able to ease up on giving stock extra feed. This bodes well for the sowing of crops in April.As most Victorian producers move out of drought we’re going well, with a particular boom across the east coast. The pricing of the cattle market is red-hot – it’s a great time for sellers as weaner sales are at record levels, but excess feed means people are buying and putting stock out to paddock, which makes it a jittery time as they hold on to stock. Overall, though, the fundamentals are good, with rain up north helping to boost low stock numbers.

Right now there’s a great demand for lamb – the market’s not flooded and prices are at good levels, and there’s money to be made if stock’s managed right. There are big opportunities at the moment to buy pregnant ewes for lambing down in autumn, as well as PTIC heifers, and in general it’s a positive time here in Victoria.

 

The current sheep-breeding market – why now’s the time to act

Posted on by Caitlin Dearden

After multiple years of drought conditions, the current La Nina weather system has given Australian sheep owners a much-needed reprieve.

As the country comes out of drought, farmers – particularly across Australia’s east coast – find themselves coming into a much more favourable season, with plenty of grass available for livestock to utilise. This in turn has led to a very competitive re-stocker market, resulting in high female sheep prices – and producers are now faced with the challenging decision of when or if to buy.

But with these favourable conditions comes the problematic issue of affordability and cashflow management. A lot of drought-hit producers had to reduce their sheep numbers in order to remain viable, and many now find themselves with limited capital on hand to reinvest. Additionally, many producers had money tied up in purchasing fodder to help their existing animals survive the drought – a situation that now further compounds the issue. In what’s currently a hugely competitive market, with large numbers of farmers wanting to rebuild their flock, many are struggling to find the initial outlay that lets them invest whilst the outlook is promising.

With replacement ewe prices varying anywhere from $350-$400+/hd, the thought of spending that amount can be a daunting one – particularly when, over the past 12 months, the lamb and mutton market has seen a considerable amount of volatility that casts doubt on whether these prices are justifiable. A productive ewe has to raise a lamb or twins to compensate for those that don’t, and a sudden shift in carcass values could mean the difference between making the right call or owning some very expensive animals.

It’s this situation that’s led to many farmers approaching StockCo about our breeder finance offering – a product that means they can avoid having to outlay a large sum of money to get themselves into a line of ewes. Instead, breeder finance enables them to spread the cost of the sheep – or cattle, where relevant – over a number of years, as well as offering a chance to free up additional funds to spend elsewhere in business, such as on infrastructure expansion or other farm improvements. After what’s been a challenging period for producers across the country, the signs ahead are finally promising – as long as the finance is in place to help farmers take full advantage of the conditions.