Store stock keeps moving out of the north

I went to the Wellsford sale last Tuesday to get a first hand feel for how farmers are reacting to and coping with the dry weather in the north where the east coast is particularly dry. While the store market is running hot throughout the country, beef prices at Wellsford were closer to $1.85 per kilo for rising 3 year old steers, about 10 cents below the rest of the North Island. Part of the reason for this was most local farmers were there just to have a look, because they didn’t have enough grass to be buying any replacements until after it rains. It’s a big change from two years ago, when Northland farms had plenty of feed to send to the Waikato to help farmers down there get through their drought.

There were agents from Waikato, Wairarapa, and other parts of the North Island at the sale to take advantage of the cheaper prices. Against the trend, a line of prime Charolais from Puhoi, weighing in at an average of 685 kg, sold for $1.91 to Warren MacLean in the Brynderwyns, where there’s still enough feed to carry them through to 450 kg carcase weight.

At the previous week’s weaner sales keen competition had seen most of the stock heading out of the north to Hunterville, Wanganui, King Country and Gisborne, continuing the trend that started back in November when it first got dry. It looks as if it will be May before some Northland buyers will be able to restock, although PGG Wrightson’s manager in North Auckland, Bernie McGahan, told me about three quarters of his farmers intended to restock sooner than that.

As long as the dry weather continues, a large proportion of store stock will move out of Northland, but good grass growth in the rest of the country is delaying the normal kill pattern – beef numbers are lagging behind last year and the five year average with farmers happy to put weight on; lambs are getting further behind the season’s forecast because of the effect of humid conditions on stock condition and the misguided belief prices will hold up further into the autumn despite the dollar.

The main problem arising from the decision to delay sending lambs for slaughter will be the serious backlog, when the kill finally gets under way. If the forecast is right, there will be an additional 1.3 million lambs to process compared with last year from March to September. Assuming the lambs don’t flow till April, there will be a shortage of processing capacity which will have at least two, possibly three, negative impacts – farmers won’t be able to get their lambs killed when they want, the price will drop sharply from the present $4.70 level, and quite likely the lambs will be too heavy for the export markets which will drive the prices even lower.

Meat plants in the north are full this week and will be able to keep going on cull cows that would normally go to the works in April, but are ready to go now. AFFCO are even talking about having to put on more beef capacity. However the local trade situation looks rather more serious, particularly into the winter, because of the lack of prime stock which can be finished in the area. The only option for the Auckland market will be to buy stock from areas further afield at a higher freight cost.

Further south some plants are on short time with Taylor Preston putting no kill up last Monday and Takapau’s night shift believed not to be working. The South Island plants are also working well below full capacity at present, so they anticipate the twin problems of too many suppliers seeking processing capacity at the same time and weights being heavier than ideal for the markets.

This season proves yet again two old truths: no two seasons are ever the same and processors can never predict when the stock will arrive. However this may be a good year for ewe lamb retention, especially where there’s enough grass.


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