It is a world away, but ranching has similarities whether you are running cattle in Australia or Canada
It is high summer and we have had several days with hot northerly winds out of central Australia pushing the temperatures into the 40s, bringing pasture growth to a screeching halt. Many cattle producers have now weaned their calves and begun feeding supplemental hay or silage, all part of the annual work cycle for a Victorian cattle producer.
The weaned calves are heading for the livestock markets along with other yearlings and culls and it has been interesting to follow the Victorian cattle run and compare to my own livestock sales off of 4-Clover Ranch, Rocky Mountain House, Alta. a few years ago. Before delving into the current market I thought some statistics would be appropriate to put the Australian cattle industry in context
Some cattle statistics are similar between Australia and Canada — a growing herd in response to improved markets and the fallout from the 2011-12 drought in the U.S. Further to that here in Oz, an abundance of rain across much of Australia the last two years saw higher numbers of retained females resulting in a never-seen-before expansion of cattle numbers in almost all states. From 2010 to 2011 the herd expansion was a staggering 4.6 per cent to 28,809 million head.
Although the 2012 figures are not released yet it is anticipated that the number is now approaching 30 million head, the highest since 1976. Canada in comparison sits at 12.5 million head. With these numbers Australia is the world’s largest exporter of beef with annual exports of 1.5 million tonnes. India has an impressive export of water buffalo surpassing two million tonnes and could theoretically be the largest exporter of beef, if this species qualifies as beef.
While Canada in comparison exports 450,000 tonnes of beef, the percentage of production exported is similar to Australia — roughly 60 per cent.
Australia is also pursuing similar markets, with 23 per cent going to the U.S., 14 per cent to Korea and 39 per cent to Japan. The Asian markets opened up significantly following the 2003 BSE crisis in Canada and the U.S. Australia is extremely fortunate in never having had BSE, especially since the cattle are mainly grass-finished and reach a considerable age before slaughter compared to Canadian export beef, much of which is less than 30 months of age. Almost 10 years of lucrative exports might be coming to an end, as recent announcements of Japan negotiating to expand imports of U.S. and Canadian beef here the Australian cattle producer on edge.
There are two main species from which all cattle breeds worldwide have been developed — bos indicus and bos taurus. In the far north of Australia the vast acres of native grass plains and the hot humid climate are typically stocked with hybrids of the two, such as Australian Brangus, Australian Braford, Droughtmaster with Brahman influence or Santa Gertrudis. These are lower-quality cattle relative to the European breeds based on bos taurus, and are typically exported live to Asia and the Middle East. Indonesia is the main market, a significant one with 2011 numbers of around 700,000 head exported live.
The humane treatment of the animals during shipment on boats, carrying as many as 25,000 head, or during subsequent slaughter, came under scrutiny following some disturbing videos from Indonesian abattoirs released by PETA (People for the Ethical Treatment of Animals) back in 2011. The Australia government swiftly banned the live cattle export. The ban has now been lifted, which was a huge relief for the northern cattle stations, left with few marketing options during the ban.
While the live export is back on track there are also additional plans to expand the slaughter capacity of the Northern Territory and export processed meat rather than live cattle.
THE SALE PROCESS
Victoria is by far the most diverse state in Australia agriculturally and the higher rainfalls of 2011 and 2012 resulted in an increase in annual cropping, more so than growth in cattle production as seen in other states. Victoria is known for its sheep and our nearby town of Hamilton often has 50,000 to 60,000 lambs marketed in a week. Hamilton is actually known as the wool capital of the world, but declining markets for both wool and meat have pretty much halved the sheep numbers in this area with cattle remaining status quo.
The cattle industry is therefore well entrenched in Victoria, evidenced by a buzz of activity selling cattle from one corner of the state to the next over the last month. There are a lot of black cattle across Australia, likely a result of some well-designed “Angus” branding. Certainly black is “in” around these parts, with Hereford a popular second choice. According to Meat and Livestock Australia, 61.1 per cent of cattle were black in 2011, up from 45.1 per cent in 2000.
The actual livestock sales are quite different from a Canadian auction market. The first difference is the fact that the livestock sales yard is managed by the local municipality, with a market manager running the logistics of the yards. The sale of the cattle (and sheep/lambs) is also different in it being organized through a livestock agent. Landmark and Elders, which also provide other agricultural services such as supplies and agronomy, are two of the big names cattle producers can choose from. The agents organize specific sales of the livestock and handle all the necessary paperwork and documentation with respect to the mandatory livestock traceability program. The terminology of the cattle sold is a bit different also:
- Vealers (specific sales days for steers or heifers): straight off the cow at the age of six to eight months, typically destined for further grass gains.
- Weaners; (specific sales days for steers or heifers), short-kept calves 10 to 14 months old destined for further grass-based gains or feedlots.
- European calves (specific sales): This is a unique national program called the European Union Cattle Accreditation Scheme (EUCAS), guaranteeing full traceability of all animals through the National Livestock Identification System (NLIS), linking individual animal identification to a central database. EUCAS allows Australia to meet the European Union (EU) market requirements for beef by segregating cattle that have never been treated with hormones at any time.
- Yearlings: off grass and either destined for feedlot finishing or a slower grass finish.
- Bullocks: 3.5-to 4.5-year-old steers, grass-finished.
During the sale the agent’s auctioneers walk on a raised “catwalk” above the cattle with the owners/buyers on the ground floor across the pens. All details of the cattle and weights are posted by the individual pens and cattle are sold by the head, with a subsequent breakdown to a price per kg live for the day’s final report. There is therefore no opportunity for the pre-sort sales, which I was a big fan of when I sold cattle through the Daines Auction Market up in Innisfail, Alta. I think it would work here as well, just a significant change from their historic sales process and major changes philosophically and logistically.
It has been a very dry summer so far with virtually no rain for almost two months. It is raining at the moment though, a steady drumming on the metal roof for a few hours now as I write this article. It is a great relief for the many fire-stricken areas, but the dry spell has put pressure on the market.
Grain prices are also high and it was interesting to see the buyers’ reaction, which is very similar to what happens in Canada from time to time. The heavier cattle, requiring less feed to finish whether on grass or in the feedlot, brought a premium, often selling stronger than lighter-weight calves. Beef producers were generally pleased with 600- to 700-lb. steers selling for about $1/lb. down from a year ago by roughly 15 per cent. Bred heifers and cows traded well, $900 and $1,100 respectively, and with the beef industry looking reasonably bright towards the next few years, those buyers picking up 600-lb. heifer calves for just over $500 should do well bringing them back as bred heifers in a year’s time or keeping them as replacements on the farm. Likewise, those producers with good pasture management skills and good stockpiled grass at home will do well on the purchase of the lightweight calves.
It is a different perspective being a cattle producer in “the land down under” but there are some parallels to raising Alberta beef. †