By Michael McManus, AuctionsPlus Market Insights
The pastoral regions of Australia are vastly different to the rest of Australia in terms of environment. As such, North Queensland, the Northern Territory, and the north of Western Australia tend to operate in their own markets. The often hot, extreme and challenging climatic conditions are ideal for hardy Bos Indicus breeds, marketed for the most part into feedlots and live export. However, consistently in response to recent rain in many regions of Eastern Australia has been encouraging and the demand to re-stock immense. Which in turn see’s the online marketplace providing an alternative market, with great success. Restored confidence has encouraged market competition, driving prices to record highs and presenting pastoral regions with the opportunity to take advantage of conditions and inject cash flow back into their operations.
The AuctionsPlus Market Insights team (AMI) team has investigated sale data from 2014 to showcase the opportunities of listing pastoral area cattle online when demand in the Eastern States is high, and prices are in record position. The data shows that FY16/17 was the last time substantial numbers of pastoral cattle were listed online, with just over 80,000 head listed in FY17 from Western Australia, Northern Territory and Northern Queensland. Similarities can be drawn with FY20, with just shy of 70,000 head listed and still 3 months remaining in the financial year. It is therefore evident that market conditions are similar, albeit prices significantly higher and online selling is being utilized to capitalize on opportunities.
Stephen Vohland from Ray White Richmond said that “AuctionsPlus presents an excellent sale channel for lighter cattle which don’t meet grid requirements and instead of being discounted, vendors can access premiums selling online where restocker competition is high”. Stephen went on to say “The flexibility of the online market is one of its key strengths” and that “having the ability to dictate delivery dates and points, whilst also having control over the price allows for producers to remain in control of their stock at all times and reach full market potential”.
Figure 2 highlights the interstate purchasing of stock listed from pastoral regions. What’s more, there is also considerable opportunity in other markets when the conditions are right. Just shy off 20% of all 350 – 450kg pastoral stock offered online was purchased by feedlot buyers between 2014 – 2020, showcasing that vendors with feedlot suitable cattle can utilize AuctionsPlus to supply feedlots.
Ash Naclerio from StockPlace Marketing at Richmond, QLD see’s the feedlots as an opportunity “A lot more feedlot activity in the north earlier in the year compared to other years”. A late wet season has also impacted his business’s decisions, “We didn't receive storms in November & December, only seeing it break in early Feb which has shortened our growing period. Due to this we have less grass and higher weed and herbage content which won't last the year. Couple the season with record breaking prices it was a good opportunity for clients to step into the market and generate some cash flow with good returns”.
Looking forward Ash see’s many opportunities for his clients, “Going forward marketing livestock online in the north is growing a solid reputation, we are seeing a changing of the guard with a younger generation coming through. The ability to market to a national database is very appealing coupled with record high prices certainly has definitely peaked a lot of peoples interest and we will continue to do so more and more”.
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