There was a significant spike in the use of beef semen by dairy farmers during mating last year, with LIC and CRV Ambreed reporting farmers had doubled the use of beef semen.
The significant lift in demand for beef semen is continuing this season, CRV Ambreed sales and marketing manager Mathew Macfie says.
“We have upped our stocks this year, and are nearly selling out already.”
Dairy farmers were under pressure to find some relief to their negative cashflows and were looking at more strategic breeding decisio
ns, he said.
“Dairy farmers are looking for ways to supplement cashflow and incomes and are thinking differently.”
Rather than using bulls or beef semen to tail off at the end of mating, farmers were using high-quality semen over the top 30% of cows in the herd, moderate genetics over the middle cows and beef semen over the lower performers in the herd.
“It’s precision genetics – using the right genetics in the right animals.”
The lack of cashflow was affecting their buying decisions and farmers were delaying a lot of their breeding decisions.
It was up to breeding companies to deliver the best products and tools to help farmers make the best decisions, he said.
The increased use of beef semen by the dairy industry would bring a lift in the number of calves in the market this year. However, it’s expected there will still be strong demand because there is a shortage of store beef cattle on the ground.
There had been strong prices for early sales of four-day-old dairy-beef calves and Friesian bulls this season and 100kg calf contracts were on par with last year, AgriHQ sheep and beef senior analyst Mel Croad said.
Top four-day-old Friesian bulls had sold at Reporoa for $215/head, while at Stratford and Bay of Plenty sales calves had sold for $150-$200/head, which were stronger prices than last year.
Contracts for 100kg calves landed from the South Island had been signed at $420, which was a competitive price and could be an indicator there would be more calves around this year, or more people intending to rear calves, Croad said.
Future prices during the season would depend on rainfall and demand from the United States, she said.
The weather was dictating onfarm decisions and as a result there were more variables as to how the market would track.
Areas of Hawke’s Bay, for example, still had a shortage of feed and a lot of farmers who would normally contract 100kg calves for finishing hadn’t done so.
Many would be waiting on spring growth before buying calves, Croad said.
Another big driver of store demand over the last year had been from dairy support farmers who were buying more beef cattle, because the income from dairy grazing and growing crops for dairy farmers had dried up.
They had heavily jumped into the store cattle market which had underpinned store cattle prices and could stay in the market. Later in the season prices would be impacted by what was happening in the US, Croad said.
US farmers had been rebuilding their herds in the past couple of years and had kept prices high for imported beef, but their autumn kill in October was expected to be a lot bigger than in previous years.
That would bring more lean beef into the market from their own suppliers and could limit the amount of imported beef required.
Once the US kill gets underway, if it’s enough to meet their market needs, there would be pressure on imported beef prices which could cause a drop in NZ farmgate prices, she said.
NZ supplies between 49% and 52% of its beef to the US, mostly lean beef including dairy cows, Friesian bulls and finishing bulls.
“It’s a big driver of prices back here purely because of the volume we send up there.
“The only good thing on our side at the moment is Australia is also right in the grips of rebuilding their herd and they’ve seen a massive drop-off in their own slaughter rates, which is really limiting the volume of imported beef into the US. So that’s going to help us, but just for how long is a bit of an unknown.”
