They follow near-record high prices during the winter sales of rising two-year bulls throughout the country.
Underpinned by very strong international demand for quality prime beef cuts and the ongoing genetic gains in the beef herd, everyone is expecting yearling bull prices to remain very firm through the remaining North Island sales and into the South Island season over the next month or so.
More yearlings are expected to be offered this year, reflecting more heifers being mated and breeders taking the opportunity to make extra cash from the buoyant market, PGG Wrightson national livestock genetics manager Callum Stewart said.
Commercial beef and dairy farmers are increasingly keen to buy yearling bulls to mate with heifer cows though some will be bought at the cheaper yearling prices and held for stud duties as two-year-olds.
The rising two-year prices have been very high and out of the range of some farmers.
There’s no sign of the market easing back yet though South Canterbury-based PGW agent Jonty Hyslop said it will be hard to guarantee prices keeping going higher.
“It will be terrific if we get those increases down here but we shouldn’t just be expecting it.”
Prime beef product prices remain very healthy and the outlook is positive.
Excellent pasture growth through the South Island will also encourage buyers for the sale season just starting, he said.
Stewart said the market is dictated by the international meat market and the global environment and they are expected to be favourable for a while yet.
The serious drought affecting Australian beef production is helping New Zealand beef prices.
The strong market coincided with a lot of quality genetics work on the national beef herd in recent years reaching a pay-off period.
Angus breeders Alan and Michelle Dalziell are planning to sell about 20 yearlings from their Atahua Angus Stud near Feilding over the next few weeks, leaving another 40 or so to carry through to their main rising two-year sale next winter.
Michelle Dalziell has noted the good early season prices.
“There’s a strong, encouraging feel to the market.”
They have a good base of repeat-buyers, mainly commercial farmers, who they keep in regular contact with through weaner fairs and farm visits to keep up to date with market demand and be able to adjust their breeding programme if required.
“It’s important that we support them and it’s all quite positive. The weaners have been selling well for the commercial guys and they’re happy with the type we’re breeding.”
Alan Dalziell follows a consistent, no-fads breeding strategy with strict guidelines to achieve a balance between the genetic qualities and the structural traits buyers can see in front of them such as long, deep body and good legs and feet. There is no single trait to identify the ideal bull, he said.
About half the Atahua yearling bulls this year are being sold to a local dairy farmer. There’s been a move in the dairy sector towards more breeding for meat, to add another income stream, either to sell-on calves for finishing or the farmer finishing them himself as an alternative to bobby calf processing.
Hyslop said dairy farmers around the country might also be stepping up their prime beef buying, seeing it as a way of reducing the risk of Mycoplasma bovis getting into their herds.
The dairy buying will strengthen the lower end of the market.
According to the PGW team, features of the beef sector include:
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Good sentiment from the strong two-year-old sales in May and June;
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Good sales at the early yearling bull sales;
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A strong global market for high-quality protein with a robust outlook;
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Prime NZ beef cuts are quickly in the market so inventory isn’t building up;
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Increased understanding of the need for high quality beef genetics among both commercial and dairy farmers;
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Commercial farmers quickly seeing the benefit of fresh genetics and replacing bulls much earlier than previously and;
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Increased demand for yearlings because of the high two-year prices, especially for farmers looking to buy more than one bull.
Modern genetics allow for shorter gestation periods and lower birth weights for easy calving, especially for heifers, and calves then achieve a buyer’s target growth levels around the 200-day, 400-day and 600-day periods.
After what he described as the fantastic prices for two-year bulls during the winter, Stewart expects another reasonable year ahead.
Demand for prime beef will continue to rise as people around the world become wealthier and are willing to pay for higher-quality protein products.
A price correction has to be expected at some point but strong sentiment now is consistent across the regions.
“What we’re seeing is that if a farmer misses out at one sale they will go to another sale the next day.”
Atahua Angus is famous for selling the record-price Australasian bull in 1992, when Atahua Legacy fetched a huge $155,000 at auction.
It was a period when people were looking for bigger animals and Legacy came along at the right time, Michelle Dalziell said.
It was also the time when investor syndicates were starting up and the auction just took off.
Atahua Legacy was used as a sire as a yearling and his sons were also used at the stud but the Atahua cows are a much more moderate size now.
“That’s what is wanted on the hill country,” she said.
