Weekly Genetics Review: What’s Driving Record Prices This Spring?

Many adjectives have been used in recent weeks to describe the results of bull sales in the spring of 2022 so far, including “excellent”, “exceptional”, “exciting” and “amazing”.

However you choose to describe the results, there is no doubt that bull sales in NSW and South Queensland in July and early August surpassed expectations previously believed prices might be “close to last year’s records.” come’.

Given the recent deterioration in the stock and slaughter markets, the question many observers and producers are asking is the drivers behind the rise in averages this year, and whether it can be sustained in the coming weeks of sales as the focus begins to shift north .

There have been plenty of bull sales in the past three weeks that, against all odds, have averaged 10-30 percent higher in average prices than last year – and many have sold more bulls this year, to boot.

All the headlines from the past week were: Texas Angus near Warialda, where 209 bulls were harvested last week, averaging $28,055. That was a record average for all varieties for each sale, surpassing the previous record of NCC Red Brahmins back in 2017 ($26,000).

The result in Texas was $7088 higher than last year’s already high average – an incredible 34 percent increase from last year, with another 15 percent more bulls.

Knowla Vee a similar pattern followed a few days later. Eighty-two Angus bulls averaged $26,512 – an incredible $9456 or 55 percent higher than last year.

Dozens of other recent sales have followed a similar trend, albeit perhaps not as extreme. One of the first sales in Queensland for the season, Seifert Belmont Redsaveraged $18,494 for 90 bulls last week — easily a record for a Belmont Red Bull sale — and about $5647 or 44 percent higher than last year’s result.

Beef Central spoke to a number of leading seed agents in NSW and Qld for their insight into recent sales trends and the drivers behind them.

Ryan Morris, a stud agent with Ray White GTSM in Albury NSW described the recent sale as exciting and a reflection of longer term confidence in the livestock market.

“There is no doubt that commercial livestock farmers, rather than seed breeders, determine these results for all sales,” he said.

“There are a few factors that come into play. First, there are the prices being offered for commercial livestock over the past year, which are really driving the momentum. But more importantly, commercial producers are really looking for better livestock in their own programs.”

“We’re talking about ‘start where you want to end’ and there’s no doubt that many commercial producers want better livestock to make sure the livestock they produce is as valuable as possible. I think most of these sales really reflect that focus as producers are looking for the right bulls for their programs.”

Lincoln McKinlay

This view is reflected further north in NSW by the ancestor specialist of Elders Lincoln McKinlay.

Speaking to Beef Central after a sale on the Northern Tablelands this week, he said the market was driven by commercial producers eager to maintain or improve the genetic base of their breeder.

“There are certainly a lot of producers who are very focused on not taking a step back with their genetics,” he said. “This means that in many cases they are ramping up and paying a little more for bulls this year, but by making their sums, the benefits of the extra spending are well and truly recouped in better performance and value of the bulls.” offspring.”

Examples of this momentum were seen this week, when several commercial ranchers earned an average of more than $26,000 for lines of herd bulls purchased from prominent Angus sales.

Colby Ede

The added value and determination to get the most potential out of their livestock was also noted by Nutrien’s Colby Edewhich is the region leading the livestock in the northeast, located in Toowoomba.

“We really see a lot of producers who are focused on their carcass feedback – for example from a 100-day feeding program and the data they are now getting is much more focused on securing the right livestock.

“It’s probably a bit higher overall for most sales, but I think there’s a level of competition where people are determined to chase the bulls they need to get the extra performance out of their livestock.”

Like Lincoln McKinlay & Ryan Morris, Colby noted that commercial producers want to support and purchase bulls from seed breeders with a strong reputation for producing commercially relevant and proven livestock.

“We see commercial producers really trying to tailor their programs to the breeders who provide predictability in their livestock, commercial relevance and success.”

Counter-intuitive, but lag factor

Given the broader commercial environment, with cattle prices falling both online and in brick-and-mortar sales, as well as growing concerns many in the industry have about FMD and LSD, the rise in averages across most bull sales this spring seems counterintuitive to many.

When asked, however, Ryan Morris noted that bull sales trends are often about six months behind the commercial livestock market.

There are still many producers who have had a very strong 2021/22 fiscal year, and this stems from their bull decisions. And while the commercial market is back, it’s still incredibly strong, especially when you look back at what was made two or three years ago.”

Colby Ede sees strong sales as a confidence boost across the industry.

“Some things stood out for some people, like FMD, but then you see that strong sales, driven by commercial producers and it’s boosting the whole industry. It will tend to flow into the upcoming sales and there will be competition as people strive to get the bulls they want,” he said.

Heifers experience strong demand

An increasingly noticeable trend is the strong interest in the supply of registered heifers that are part of some sales. Many of these heifers go into commercial programs to be mated with bulls for the purpose of breeding replacement herd bulls on the farm.

“There is no doubt that there are now many producers who buy two or three bulls at the average of sales, and then push for the sale of a bull with a higher price to use them to breed their own replacement herd bulls,” remarked Colby Ede. This is a trend also noted by Lincoln McKinlay.

While on the surface this is a strategy that some producers may see as a method of getting bulls for breeding at a lower price, it is worth noting that finding superior bulls and developing consistency in bull teams take more than one generation to achieve.

As one of the three agents noted, “You can’t underestimate the effort the seed breeders have put in. That is why they are rewarded with such a strong commercial demand for relevant livestock.”

As this year’s spring sales enter the second part of the season, it appears that the averages will remain on track to be above last year.

But where this year’s breed averages (results published on Beef Central each November) are likely to land is less certain, though.

In the opinion of the brokers interviewed, it is possible that the averages may decline slightly as sales move further north. What is more certain is that demand for bulls will continue to be driven by targeted commercial producers, determined to ensure their livestock is best placed to meet market demand.

Alastair Rayner is the director of RaynerAg, an agricultural advisory service in NSW. RaynerAg is affiliated with BJA Stock & Station Agents. He regularly inventories and sells cattle for clients and also attends bull sales to support client purchases. Alastair offers pre-sale selections and classifications for seed producers in NSW, Qld and Victoria. You can contact him here or through his website www.raynerag.com.au

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