News

Jan 23, 2023

Chris Howie, StockCo’s National Business Development Manager outlines the current market and potential trade opportunities.

Now is the time to seize buying opportunities and focus on the supply window 4 – 8 months down the track.

Over the last 4 months we have seen considerable price volatility within the sheep and lamb market. Much of this was a direct result of considerable rain and flood conditions in key supply areas during October and November condensing the sale period and impacting performance.

Cattle however, held their ground on pricing until mid-December when we had a significant price reset that was much larger than most expected. This took us back to the values of 2 years ago.

When prices take a hit it is easy to focus on the fall instead of looking at the trade opportunity. The delayed harvest has resulted in stubbles unutilised and with areas drying out there is a significant body of feed available. The feed value is not top notch, but it is definitely good enough to grasp the buying opportunities currently available and carry good value purchases into the lower supply period mid-year.

Beef pricing is significantly impacted by the US drought and the oversupply of cheap, good quality beef onto the international market. Once the US drought breaks, with some areas experiencing good rain lately, this supply run only lasts for about another 130 days. Much the same as what happened at the end of our last drought. This in turn should see a rise in international demand with a positive impact on pricing.

Lambs really struggled last year with many not finished or lacking weight. It is the first time we have seen store lambs making less per kilo than finished lambs for a long time. This creates a margin from day one if you plan positive weight gain when feeding. Good pasture or grain ration are now delivering significant trading upside. Be mindful there will be a run of heavy lambs from mid February to early April which is about 6 weeks later than a normal year. After that we will enter the time of year when tractors start to roll and supply decreases.

Mutton (and goat) have taken the biggest hiding. As a base commodity meat when the higher quality products fall in value the inventory of these 2 meat types quickly becomes overpriced and very hard to sell.

The extended COVID shut down in China is impossible to measure but it has had a significant impact on international meat trading outcomes that fall all the way back to the producer. The recent easing will progressively start to see consumption rise which hopefully aligns to higher demand.

What are the opportunities to consider?

• Steers 300 – 400kg are selling between $1,400 – $1,700. Many are very well weaned and offer great value.
• Lambs
  • 1st and 2nd cross lambs are very buyable between $100 – $130. Most have plenty of weight and are ready to go.
  • Merino wether lambs are the big opportunity if you are prepared to work. Pastoral shearing is upon us and large lines will present for sale February onwards. The carcass / wool combination gives a great trade return in the winter.
• Mutton is under value at present and putting old ewes out onto rough feed is another great wool / carcass trade (make sure they have good mouths)
• Mid-range cow and calf units have eased in value with NSW not having rain for 6 weeks. Well worth a look.

At StockCo we speak to producers and agents all over Australia about seasonal conditions and opportunities to buy. Our Regional Livestock Managers are happy to have a chat at any time about lifting your limit or a new facility*.

General Advice Warning
The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.

*Subject to StockCo’s eligibility criteria.