THERE was a mixture of hope and apprehension among buyers at the opening of this year's weaner sales at Colac, Hamilton and Casterton this week.
The apprehension was understandable.
Prime cattle prices have fallen sharply in the past 12 months.
Finished yearling steers, 350kg liveweight, which were making 165-170c/kg a year ago, are now being quoted at 150c/kg, down 10 per cent.
And bullock prices are faring poorer, down 15 per cent on last year's weak prices hit by the global financial crisis.
Most of the woes stem from the strength of the Australian dollar, which has risen 40 per cent in 12 months to about US91c.
South Gippsland grass finishers who assembled in the saleyard cafeteria prior to the Colac sale this week were bemoaning the situation.
"There are no margins in it anymore," said Milton Heywood, from Sandy Point, whose latest prices for finished bullocks barely topped $900.
He was in Colac to buy replacements, which even at prices of $550-$600 plus transport, plus 18-24 months on grass, vindicated the "no margin" comment.
"You can't run a lolly shop if you haven't got lollies to sell" was what was driving these buyers.
On the positive side there are several facts to back their hopes.
The Australian dollar seems to have hit a ceiling despite some economists predicting that it will rise to parity with the US dollar.
The Asian economies are reportedly beginning to pick up.
That could boost returns from the premium Japanese and Korean beef markets.
Locally there are two or three good trends, at least for beef producers.
Feed grain prices are down 25 per cent on a year ago.
Feed barley, which was being quoted on-farm at $175 a tonne a year ago, is now available at less than $135 a tonne.
That will be helpful to lotfeeders, should the export market shows signs of a resurrection.
Lamb prices are on a high and showing no signs of abating as sheep numbers run tight.
High prices lamb should begin to provide increased retail opportunities for domestic beef.
But the real positive for lift in beef prices could come from the cattle supply.
Two years ago the national beef herd was 25.4 million head, of which more than half was in Queensland and the Northern Territory. At last count, in June last year, the herd was down to 24.5 million.
Meat and Livestock Australia is soon to deliver its first 2010 estimates. Just where it will be in June this year is hard to say now, although the speculation is that after Queensland and northern NSW have been hit hard by floods and drought, the herd could fall to as low as 23 million.
In Victoria, which is still trying to recover from a decade of drought, cattle numbers are at a low, which explains why the yardings at the current series of weaner sales are down 5-10 per cent on last year.
In East Gippsland, beset by its own regional drought, the fall is expected to be considerably greater, which doesn't augur well for mountain-calf sale yardings in March. The trend to jump on the prime lamb bandwagon is another factor set to curtail beef supply.
The South Gippsland hope in beef may well be justified.
