Drought and disruption caused by the lockdown pushed prices down at least $300/head.
New Zealand Farmers Livestock Waikato agent Bill Sweeny said while values did fall buyers have returned to the market and are prepared to pay better money for quality cattle.
In January he sold herds averaging $1600-$1800 and a couple of exceptional herds at $2000 a head.
If the top herds had sold when prices fell they might have only made $1700, he said.
“The very top herd might have dropped $200 and your poorer quality herds probably around $400 and your average one about $300.”
Earlier in the season heifers were selling for $1550 on average, dropping to $1200. But buyers have recently returned to the market seeking good quality cattle and are prepared to pay better money, he said.
“The market had hit a bottom but, if anything, it’s turned and come back up.”
He recently ran a clearing sale on an extremely good herd of cattle near Whakatane, which averaged just under $2000.
“The heifers averaged $1740 and the yearlings $1100. It went very well but it was a very good herd of cows.”
Sweeny said the fall was in large part caused by the drought but the recovery in parts of Waikato has refuelled demand. The lack of farm sales has also affected the herd market, he said.
“If you get a lot of farm sales you tend to get a lot of activity. Farm sales were limited this year and it’s one of the poorer years for farm turnovers.”
PGG Wrightson national dairy manager Jamie Cunningham said most cows are sold on forward contracts.
Those cows are contracted as early as December right through to the end of the milking season for on-farm delivery on June 1.
While cow prices did drop and were challenging during lockdown that coincided with a general trend of cow prices sliding
“Every year the cows that are sold at the end typically are the cows that are of lesser quality or are last-minute sale decisions,” he said.
The market for people to buy cows and farm them through the autumn was starved because of the North Island drought.
“Yes, there are some herds of late that have been sold for $1200-$1300 but there were some earlier herds that sold for some very good prices.”
“Our national cow price throughout the season that we budget year on year and trade on a monthly basis, we’ve not actually seen a vast difference there, probably only $50/head difference.”
One area that did stimulate the market was the export of dairy cattle to China.
“That has held our market up very well and has been extremely beneficial for famers to generate some cashflow.”
He said values ranged from $1100-$2000 with the average mixed-age cow selling for $1500. Demand from buyers is starting to drop off now.
“We are not seeing a vast difference in the number of cows traded from this year to last year. It still seems to be pretty consistent.”
“On the price front if you look at a 12-month average we have seen very little movement.”
He expects clearing sales to struggle because of the lack of feed on hand.
About 70% of cows from his clients were sold pre lockdown, which did present challenges in travelling to farms because of the restrictions.
While farmers could inspect herds there was a lack of appetite to do this because of the pandemic, he said.
“If you’re looking at selling your herd when you’re a sharemilker, it’s when you’re looking to cash out and for them it’s quite a bit of money (lost).”
