A shortage of prime cattle is pushing prices up at the sale yards, as farmers carefully monitor the market.
With plenty of urgency for finished cattle in the South Island, strong demand for a diminished supply of cattle is underpinning the current week-on-week lift in prices.
At this time of the year, local trade is usually driving the beef market but this winter the exporters are giving the local butchers a run for their money in the sale yards, AgriHQ Livestock Insight analyst Nicola Dennis says.
After an advanced prime kill this season, because of the lack of feed that saw farmers offloading stock early, cattle are now hard to find.
“Most vendors have already cleared out due to the feed concerns,” Dennis said.
“A few who were planning on holding out until spring have been enticed to hit the offload button by rising beef prices and persistent muddy conditions.
“Those with crops ahead of them are prepared to wait for spring when prices promise to be even stronger.”
North Island beef farm gate prices remain firm, with indicators mainly steady.
“There’s a few more cattle around in the North Island,” she said.
PGG Wrightson South Canterbury livestock manager Joe Higgins says farmers are watching the market and sale yard tallies are higher than usual for this time of the year, as they divert killable stock to the yards.
“There’s a very definite shortage of prime cattle at the moment and the sale yards are virtually dominated by traders buying on behalf of processors,” Higgins said.
“Farmers are keeping a close eye on the markets and agents know the sale yards is currently where the stronger market is and advising farmers to go to the more competitive environment with their uncontracted cattle rather than sell in the paddock.”
A large percentage of the big yardings at Temuka are dairy cross cattle.
He expects buoyancy in the market will continue through the next four to six weeks.
“Basically, processors are filling the plants with what they can get their hands on until the spring lambs come on,” he said.
Against the backdrop of limited supply, steer prices firmed at Temuka this week to the highest level since 2019, with most good yielding lines of beef and beef-cross over 520 kilograms consistently priced at $3.20-$3.30/kg.
Canterbury Park was also a sellers’ market as buyers competed and pushed prices higher.
While a smaller yarding than Temuka, there was little to separate the better-quality steers and heifers over 510kg that fetched $3.43-$3.53/kg.
Meanwhile, there is an upward swing in store cattle prices as beef schedules rise.
The R2 cattle remain the flavour of the month, but there has been some renewed interest in yearling steers from buyers hoping to beat the spring market.
“There is still plenty more upside to come for yearling stock which remains undervalued relative to beef schedules,” she said.
“When pasture levels graduate from sheep-length to cattle-length, we could see some real heat in this market.”
Dennis says most regions are struggling to find supplementary feed to purchase so this could put hay and baleage harvesting, rather than store cattle purchasing, at the forefront of everyone’s minds.
Rabobank beef analyst Genevieve Steven says strong demand, particularly from China, in addition to less market competition from Australia, has culminated in the elevated farm gate pricing in New Zealand.
Rabobank anticipates that beef pricing will remain strong through to September off the back of continued demand from the US and China.
Steven says limitations of beef exports from Argentina into China also provide an upside for pricing and demand for NZ beef.
The US cow cull is tracking well ahead of normal, with demand remaining strong for beef.
She says it’s expected US domestic pricing will appreciate over the coming years and could further help to strengthen demand and pricing for NZ beef, particularly while the Australian beef herd rebuilds.
