Farmers return to their comfort zone as saleyards re-open after Covid-19

Sheep crowd the front paddocks awaiting transport for their turn at the recently re-opened saleyards. Photo / Bevan Conley A_080620WCBRCRat09.JPG

Farmers are back in their comfort zone with the return of weekly livestock auctions in the saleyards.

Independent livestock agent, market commentator and Whanganui farmer David Cotton was slightly surprised but delighted the livestock market was back up and running full steam so soon.

"You have to take your hat off and congratulate the stock agents at the major saleyards around the country for just how quickly and efficiently they got back up and running," Cotton said.

"Huge numbers of livestock have been processed at the saleyards over the last couple of weeks and, although I'm a known critic of the lack of efficiency and cost to the farming industry of selling through saleyards, I have to say saleyards seem to be the farmers' happy place to trade.

"An agent that told me the other day he had cattle quoted to him two weeks into lockdown at $100 a head more than his purchasers were prepared to pay.

"The vendor laughed and turned down the offers but sold them at the saleyards two weeks ago at the same price he turned down - the vendor just shrugged his shoulders saying 'well, that must be the market price'.

"The saleyards seems to give both vendor and purchaser confidence that the market price is the price, good or bad."

Meanwhile, the cattle market is well back on last year, with the kill price on prime stock back 40 cents/kg.

"The liveweight price has taken a hammering and is back 30 to 50 cents on 2019," Cotton said.

"This is seeing some vendors sell cattle at less than they paid last year for them and there is a major variation in the liveweight price being paid versus the kill price in percentage terms.

"Take two-year heifers that kill on a $5/kg schedule – that's $2.50 liveweight. The store heifer market is selling at $2/kg-$2.20/kg - what a bargain for purchasers.

"The sheep market is also far lower than this time last year, although holding up far better in terms of price paid for store lambs versus killing price.

"The mutton price is strong with at kill price close to $5/kg and this underpins the value of the in-lamb ewes now hitting the market with one line of scanned in-lamb 4-year-old ewes carrying twins making $220 last Friday (Feilding)."

He said the huge improvement in prices paid since lockdown was due to the rain in Hawke's Bay but was mostly due to the saleyards working at full capacity again.

"If you think being a livestock agent has been hard over the last few weeks, ringing vendors with their cattle price, think of the poor wool rep ringing clients with the sale price of lambswool. It's $1.10/kg to $1.30/kg, I'm told. Hopefully, the record-low interest rates will be helping a few farmers out."

The weather was also a key factor.

"In our neck of the woods it has been dry underfoot, good ground temperatures, with only just enough rain to keep the grass moving. At home, I have kept a rain gauge for 25 years. We have received 750mm of rain for the last 11 months and would normally average over 1000mm.

"So we are 250mm under the average. I remember June 20, 2015, when over 300mm fell in one month and the destruction it caused.

"The million-dollar question for all those farmers that had to offload livestock over the last eight weeks must be 'what will happen in the spring when Hawke's Bay return to the livestock market?' – prices will soar," Cotton predicted.