A COMMENT from an agent at Wodonga last week neatly summed up the performance of livestock markets this year.
Talk: Rodwells agent Neville Colville, Ross Davis of RJ Davis pastoral co and Matt Way manager at Wolbunya have a chat at the Hamilton sale.
It also explained why the latest Indonesian live cattle drama will have little impact on the looming New Year calf sales.
"There is nothing like the optimism of a farmer, especially when there is green grass around," the agent said as he watched young store cattle continue to make impressive money last week.
Producers themselves have been the underlying strength of both cattle and lamb prices this season as ongoing rain has kept paddock feed fresh and created the two-fold effect of slowing sales of slaughter animals and driving restocker demand for stores.
Evidence of this can be seen in the Eastern Young Cattle Indicator, which is now sitting at a record December average of 413.75c/kg carcass weight.
This price is higher than the winter peak of 398c/kg carcass weight, and shows the impact farmers have had on cattle values this spring and early summer because of the season.
Likewise, the lamb market has been able to glide through to Christmas without its traditional spring price slump, because of a combination of fewer kill numbers and restockers pushing-up values through the lighter weight ranges.
National Livestock Reporting Service figures reveal nearly 250,000 fewer lambs were slaughtered in the past three months than in the same period last year.
At the same time, the percentage of lambs sold to restockers from all the major weekly prime markets has increased substantially on 12 months ago.
The unusual livestock trends of recent months do raise questions about next year, and the possibility of a delayed build-up of cattle and lamb supplies that could affect prices.
It was hinted at last week at Wodonga, where JBS Swift was a major buyer of older and heavier steers suitable for lotfeeding.
The suggestion was that recent rain had slowed the supply of feeder cattle from the south, forcing Swift into the auction system - but that "two weeks of hot weather could easily change the situation".
"We know there is a lot of cattle out there with weight this season, we just need some hot weather to force them out," said one buyer.
It has also been suggested that lamb values will hit a hurdle once the summer turns hot and shorn lambs start being sold in volume numbers.
The other looming issue for livestock in 2012 is politics and market access.
The live cattle trade hit the headlines again late last week with news that the Indonesian government would slash the number of animals, and boxed beef, being sent from Australia.
While the move is being talked about in terms of Indonesia wanting to protect its own cattle industry and achieve self sufficiency with its meat supply, there is little doubt there is an element of pay-back for Australia banning exports earlier this year because of animal welfare concerns.
The other, potentially more damaging issue for southern beef producers is Japan's decision to relax its import protocols for beef from America and allow US cattle aged up to 30 months to enter its food chain.
It is unclear when the new rules will be implemented, but the result will be much greater competition from US beef in Japan, the likely result being fewer beef exports from Australia at potentially lower values.
But in the short-term, the season and farmer confidence are expected to override future market issues...
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http://www.weeklytimesnow.com.au/article/2011/12/21/421941_cattle.html
Source: farmonline.com.au
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