“One or two sales struggled a bit but it was a generally outstanding season and prices were in front of expectations,” PGG Wrightson genetics specialist and auctioneer Cam Heggie said.
“Why, I don’t really know. I thought it might have gone the other way with land use changes and stock numbers down.”
Poverty Bay breeder and commercial farmer Sam Hain wasn’t so surprised prices were higher on average but was surprised at the very high clearances because of the changing land use to forestry in some areas and lower stock numbers.
Both men attributed the strong season to farmers having plenty of cash because of the high lamb returns this season, reflecting the old saying that when lambs are up farmers buy good bulls.
Hain, head of Federated Farmers Poverty Bay-Wairoa meat and wool, said it’s been one of the best earnings years on record and that boosted both prices and clearances.
Heggie thinks farmers accept the need to pay for the best genetics to improve their herds.
“It looks like we’ve reached new levels.
“In the old days the commercial guys were paying $6000 to $8000 for a bull and now it’s in the $10,000 to $12,000 range. For the studs it was $60,000 to $70,000 and now it’s $70,000 to $80,000.”
A good sign for the industry is that two of the best priced Angus bulls of the season, selling at $85,000 and $86,000, scored highly on both phenotype and genotype – that is looks and stature and the breeding data.
“It’s not just a high EBV and not just a strong traditional bull. The data and the strong bull-type have now merged a bit.”
Breeders are aiming to achieve both and a couple of studs look to have found it.
In the latest round of sales prominent studs paid good money for bulls from other studs.
That is a sign top bulls are harder to find and people are prepared to pay for them, Heggie said.
That applies just as much to commercial farmers who are the people setting the prices for the sector.
Though average prices were higher this year for most vendors and his own average for Hereford bulls was up $1400 on a full clearance, Hain noticed one significant change from previous years at a number of the bigger sales where higher prices were paid at the top end but lower prices later on, rather than being consistently strong throughout.
“You might have had a top at $15,000 and then a lot at $5000 or $6000, whereas last year there would have been most at $9000 to $12,000.”
An explanation, in his own region at least, was the high number of bulls put up for sale and once buyers had met their requirements the market dropped.
“There was some good shopping for those who waited and also the chance for some to buy one more bull.”
After very good weather in the region bulls were exceptionally well presented, Hain said.
Heggie said it was still a painful exercise in some areas to pay high money for genetics but overall there is an acceptance they have to pay more now to make more later from an improved herd.
There has been some talk about how far prices can rise before meeting resistance.
“You need the commercial guys there to do the buying and they’re setting the price.
“If a stud wants a bull it will just go and buy it,but where you’ve got 60 in the sale then the commercial farmers will be buying 50 of them.”
He’s hoping the price strength might be part of a structural change for the sector.
Angus and Hereford continue to dominate the sale tallies and returns. They’ve built up strong brands over a long time and it was a bit of a struggle for the newer or minor breeds to catch up, he said.
