NZ calf prices hit record high as demand soars amid supply shortage

The average price in the traditional breeds sale was $920 a head, well up on the average in 2015 of $712 a head. Photo / Dairy NZ
The average price in the traditional breeds sale was $920 a head, well up on the average in 2015 of $712 a head. Photo / Dairy NZ

Prices for weaned calves at the start of the new sales season in New Zealand are hitting record highs amid increased demand and lower supply.

Sales of six-month-old weaner steers and heifers this month at Stortford Lodge in Hastings, an early benchmark ahead of the peak sales period in April, rose between 17 and 29 per cent on 2015, which was itself at record levels, according to AgriHQ. Weaner sales generally finish early May.

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Farmers who shed stock ahead of summer last year on concern about the impact of a dry El Nino weather pattern were now seeking to restock as rain in many areas through January stimulated pasture growth. Meanwhile, farmers who had previously provided grazing support to the dairy industry are now looking for other sources of income such as fattening weaners as dairy farmers look to rein on costs.

Cow numbers are also declining, with industry body Beef + Lamb New Zealand forecasting the national breeding cow herd fell below 1 million for the first time last year. That led to fewer weaner calves being born last spring with early estimates forecasting a drop of 50,000 head to 1.043 million, according to AgriHQ's 'Weaner Fair Outlook 2016' report.

"There is just so much demand for the cattle," said AgriHQ analyst Mel Croad, who authored the report. "There's a very tight window of opportunity for buyers to secure the cattle they are after and at the moment we are seeing that those good quality beef cattle are being highly demanded and breaking new ground in terms of prices."

The first two Stortford Lodge fairs in early March mustered just over 1,250 head, close to 200 head down on 2015 volumes. Some 49 percent of the 445 steers made more than $1,000 a head, with a top price of $1,125 for a line of 280kg South Devon cross. That compares with the corresponding sale in 2015 when the highest exotic steer price was $940 a head, which Croad said was "phenomenal" growth.

The average exotic steer price in the first sale of 2016 was $892 a head, up from $765 a head last year despite weights being back 12kg on last year.

The 2015 Stortford Lodge weaner prices were the strongest and reflected strong gains made from the 2014 season.

At the traditional steer fair the following day, 41 per cent of the 737 head surpassed the $1,000 head mark, with the top price of $1,170 a head going to a line of 280kg Angus and Angus-Hereford steers. That compared with a top price last year of $905 a head for 297kg Angus steers, AgriHQ said.

The average price in the traditional breeds sale was $920 a head, well up on the average in 2015 of $712 a head.

"The 2015 Stortford Lodge weaner prices were the strongest and reflected strong gains made from the 2014 season," Croad said. "But following the prices achieved in the early March fairs this year, the record books are being rewritten, as demand far outweighs supply."

The higher prices may mean margins will be squeezed for farmers wishing to fatten the weaners before selling them for slaughter at about 18 months old, although the solid outlook for beef is underpinning the market, she said.

Still, the record prices may yet lure more calves to the market, she said.

- BusinessDesk

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