Markets

Rain will be key to cow value lift: agents

By Dairy News

There’s opportunity in current cow values for those who have feed, according to a cow leasing and agricultural finance company boss.

This comes as livestock agents continue to report tough selling conditions, as farmers in northern Victoria battle either expensive or no irrigation water as well as rising costs, while farmers in southern regions have been reluctant to purchase, awaiting the season break.

CowBank managing director Rod Banks said there’s “upside” now as good cows were selling at a discount, in some cases between $500 to $700, on previous levels.

The reduced values correlate with high supply and lack of demand as dry conditions bite, forcing feed costs to skyrocket and many farmers out of the industry.

This has meant demand for cattle has been quiet, but Mr Banks said, for those who have feed, the numbers stack-up.

“One client completed a budget which meant 200 additional cows into their herd would deliver another $50 000 income at a cost of $16000, each cow worth $800 each,” he said.

“There’s big opportunity, upside to cow values,” he said.

“We’ve been parking cows with clients, a couple of hundred cows, and then you think you can buy good cows for $1000 to $1200 that would normally be $1500 to $1700.”

He said there was some interest in purchasing farms with the people looking to buy the herds attached to the farm. Mr Banks said this would only increase into the future as the farmgate milk price outlook was positive.

“The learning out of this period, farmers who are going the best are those who have not cut, they’ve kept feeding their cows and haven’t lost cow condition,” he said. “They might be milking 10 to 15 per cent less, so less numbers but the same production per cow.”

Flanagan Marketing Services’ Lawrie Flanagan said the rain will make all the difference to cow demand.

“It has been hard enough to sell cows at the moment, prices are $1100 to $1400, and anything a little off-the-pace or a little older (is cheaper),” he said. “The chopper market has been keeping values up, (a good framed Friesian) has been selling $800, $900 or $1000, (so replacement cows) are not much more than chopper price really.”

Charles Stewart agent at Camperdown Malcolm Hallyburton said there wasn’t much demand as local farmers didn’t have feed and everyone was waiting on rain.

“Grass would turn everything around, but farmers are also sitting back to see what the milk price does when it comes out,” he said.

Charles Stewart and Dairy Livestock Services conducted a dispersal at Colac in April where 41 heifers and cows averaged $1568. The mixed-age and condition offering had various calving dates from April to October. The sale clearance was 73 per cent.