Organic Cattle: Is the Grass Greener?

Across the agricultural sector there has been considerable growth in the organic market fueled by rising consumer demand and awareness. For the first six months so far in 2021, AuctionsPlus organic cattle throughput has increased by 214% year-on-year, to 6,655 head - with total cattle throughput down 3% for the same period.

The increased organic listings have been largely underpinned by widespread grass availability and elevated restocker demand, with producers provided the flexibility in production to meet organic requirements. Given the ability for the online platform to clearly identify and market organic lines, demand has also been much stronger, with organic cattle registering 99% and 87% clearance rates in 2020 and 2021, compared to ‘conventional’ cattle offerings which saw 83% and 85% clearance, respectively.

Table 1: Throughput of Organic cattle listings on AuctionsPlus 2015-2021

Dating back to early 2015, the online supplies of organic cattle through AuctionsPlus has been heavily influenced by the seasonal conditions. From 2017 to early 2020, supply was curtailed by widespread drought, as pasture availability and organic feed was difficult and costly to secure, leading many producers to forgo the additional assessment criteria.

Table 2: Average c/kg liveweight of steers and organic steers sold on AuctionsPlus in 2021.

AuctionsPlus data from commercial sales in 2021 was used to capture average prices of steers sold online - examining the price differences between organic and conventional steers. Of cattle sold through AuctionsPlus in 2021, organic steers in the 280-330kg weight range have returned on average 36c/kg more than non-organic steers. Small price advantages were also noticed in organic steers weighing between 200-280kgs and heavy steers over 400kgs.

Feeder steers weighing 330-400kg differed however, with non-organic steers returning 4c/kg higher than organic steers. However, in the context of the current cattle market, as restockers continue to recover numbers following prolonged drought, the differentiating price points for organic cattle sold through the platform could be weakened, given the very high demand and scramble for young steers across the market.

Figure 1: State breakdown of organic cattle offered on AuctionsPlus in 2021

So far in 2021, Queensland has accounted for 73% of the total organic offering, with Victoria and NSW making up 16% and 9%, respectively. The stock category breakdown for the same period comprises of 53% weaner and yearling steers, 38% weaner and yearling heifers and 8% cows and calves.

Interestingly, the breed breakdown for organic cattle is broadly distributed, with Angus and Hereford cattle each accounting for 10% of AuctionsPlus listing, while Angus cross breeds and Angus composites comprising of 25% and 20% of the offering, respectively. On the purchasing side, Queensland continued to dominate the organic market with Southern and Western Queensland securing 35% and 18% of the offering, respectfully, followed by higher rainfall areas of NSW.

2021 YTD Top Organic Cattle Purchasing regions:

Figure 2: Breakdown of organic cattle purchased from respective states.