WE'VE had near-record prices for old cull cows and extreme returns for young weaners.
But they still aren't being reflected in the value of breeding females at store cattle sales.
Two herd dispersals in North East Victoria last week provided the market with a genuine test of buyer demand for lines of well-bred breeding cattle.
While the results were solid, they could hardly be rated as exceptional.
The Ashwood Park commercial Red Angus herd, pregnancy tested in calf to Charolais bulls for a February calving, sold from $1260 to $1700 at the Yea store sale last week, with the herd averaging $1480.
These cows had, arguably, one of the best performance records of any commercial beef herd in southern Australia, having produced weaners that had topped the annual Yea calf sales in January for the past seven years.
The other dispersal last week was the Black Magic Angus herd sold at Euroa, with the pregnancy tested in calf March calving cows selling to $1600 and averaging
In relation to the prices other young store cattle are commanding and the outlook for grinding beef, these breeding cows still appear to be value buying.
With store buyers paying well above 200c/kg for mixed-sex weaners, a herd of beef cows can easily generate a return of $750-plus for 9 to 10-month-old calves.
But probably the strongest reason store breeding cows appear under-valued is the shortage of cow-beef and the level of global demand for hamburger mince, which makes the change-over cost for a young breeder very reasonable.
Meat and Livestock Australia's national indicator price for a medium cow being sold for slaughter is 152c/kg - about 10 per cent higher than a year ago.
In dollar-a-head terms, an average beef cow is worth $800 to kill, with the better framed and conditioned types easily making $1000 plus.
As Yea agent Chris Pollard, Landmark, said last week: "You can replace old cows for PTIC females for not much change-over."
It is difficult to argue that case with other store cattle, one example being young steers that are selling for $800-plus at a time when feeder cattle and grass-fed bullocks are struggling to average much more than $1000 before costs are taken into account.
Market signals also suggest grinding beef will be the stellar market performer next year due to tight supplies of slaughter cows in Australia and the US, where herd rebuilding is also tipped to get under way after extensive drought.
In every month this year, exporters have struggled to fill cow kill quotas in Australia.
Figures show the female cattle slaughter is 12 per cent down (for January to October) when compared with the same period last year.
In round figures, it means about 370,000 fewer cows have gone through abattoirs in the past 10 months.
MLA data shows the low cow kill was evidence that producers are retaining their breeding stock and herd rebuilding after years of drought.
But if there is such strong intent among producers to replace female numbers, surely prices for well-bred store cows should be stronger?
So what is the problem in Victoria?
The issues raised last week when talking to vendors and agents were: cash-flow and the availability of funding to pay for replacement breeding stock; and the lifestyle element that has become so entrenched in southern farming and which favours low maintenance stock such as steers over cows and calves.
Duncan Newcomen, manager of Ashwood Park, said although it could be argued breeding females were under-valued, buyers still had to be able to fund the cost of putting more cows into production.
"They probably are (under-valued) but there is a limit to what people can pay and I don't think there is the cash-flow around like people think," he said.
Mr Pollard said the strongest orders they had were for 20 to 40 steers, rather than for breeding cows.
This reflected changing land-use in the south, with the profit making ability of cattle a secondary consideration in many cases.
"There is a heck of a lot of 100 to 200 acre properties around now that just want a few steers to eat grass, they don't want the work involved with cows and calves even though there is potentially a lot more money in it," he said.
