The market for reared Friesian bull calves has come back $40-$50 per head, according to Te Awamutu calf rearer Mark Bocock.
This is the result of less competition in the market brought about as North Island farmers continue to recover from the drought.
Some farmers are unable to take any calves they would usually take, while others will only take them at the right price.
At the same time, his on-farm costs for rearing the calves had creeped up by an estimated $10/head.
“The margins are getting skinny all the time,” he said.
Meal and wage costs had lifted, while milk powder prices were unchanged. He had dropped the price he was paying for the calves on collection by $35-$40 to try and make up some of that loss.
“You have to make sure there’s enough skin in the game for everybody,” he said.
It was a balancing act. The farmers he purchased the calves from had to get a fair price, there had to be enough return in it for him to justify rearing the calf and the farmer buying the reared calf had to get a quality product at a fair price.
Bocock sources the bulk of the 3600 calves from around 60 farms, picking up calves twice a week from regular buyers, rather than local sale yards.
This system allows him to control the stock flow coming on-farm.
He and wife Michelle rear mostly Friesian bull calves, around 1000 beef calves, and 1200 autumn-born calves.
The calves are reared until 100kg. Most of the calves are pre-ordered and are sent all over the North Island to farms in southern Hawke’s Bay and Northland.
While Bocock had forward contracts to fill, giving him certainty this year, there were fewer contracts available, which was why he is rearing 1000 fewer animals this season.
Outside the Hawke’s Bay, other regions were faring better.
“The outlook is quite good but buyers are being a little bit cautious and a lot of cut their orders back a bit,” he said.
Some farmers who would usually take 250 weaners were taking 200 instead.
Marketing the calves to the people who usually buy them as weaners has been his biggest challenge so far this season because of the variable demand.
Despite the struggles, he is confident they will be in financial black by the end of this season thanks to the economies of scale.
He says it was also noticeable that a lot of smaller rearers had pulled out this year.
They would have looked at their financials over the past few years and realised they were making nothing.
He says this could mean fewer numbers of reared stock available for sale.
At the sale yards, he says the lack of interest in the market meant calves that in previous years would have been reared were being sold as bobbies for the petfood industry.
“There won’t be as many quality calves coming through as last year for the market, but Hawke’s Bay won’t be able to take as many stock as well at least for another year or two,” he said.
Sale prices at the yards had been “all over the place” for calves. Some days there were plenty of buyers and other days, there were none.
Quality calves sold were fair, but anything not marked or smaller got hammered, selling for pet food.
He says he recently saw white headed calves sell for $15 that in other years would have been reared.
For some farmers, it was more economical to sell Friesian bull calves to bobby calf collectors rather than risk taking the cattle to the yards and being hammered on the price, once cartage and all of the other costs had been factored in.
“They need north of $60-$70 on average at the sale and they are not getting it,” he said.
On the positive side, the mild winter had made for very pleasing calving conditions.
“The weather for calf rearing has been really good and we’ve been ticking along happily enough,” he said.
This was on the back of good mating conditions, which saw calves become available early for on-farm collection.
