P.T.I.C – Eight Points in Scrabble…Priceless in Cattle Herd Rebuild

While P.T.I and C might only bring eight points in scrabble, these four letters brought great value to the cattle markets during the past financial year. With producers looking to rebuild historically low herd numbers since the breaking of the drought in the first half of 2020, the effort in marketing, researching, and purchasing PTIC heifers and PTIC cows went to amazing levels through AuctionsPlus during the past year.

For the 2020-21 fiscal year, AuctionsPlus registered a huge surge in PTIC assessed and marketed breeding stock. Underpinned by breeders looking to maximise the value of suitable breeding stock, and accentuated by buyers looking to fast-track herd rebuilding, there was 99,993 head of PTIC heifers offered through AuctionsPlus – an increase of 190% on the corresponding period in 2019-20. This established PTIC heifers as the largest single category offered through Australia’s largest cattle market during the past financial year. Similarly, for PTIC cows, there was a 40% increase in the numbers offered through AuctionsPlus in the past fiscal year.

Given many producers desire to capitalise on the overall excellent seasonal conditions, while balancing long-term herd demographics, PTIC heifer prices averaged 34% higher in 2020-21, at $2,281/head, with a 73% clearance rate for the close to 100,000 head offered. While the age range of PTIC cows offered throughout the fiscal year was very broad, even within single lots offered, the average price for the year jumped 25%, to $2,180/head, with a 74% clearance rate.

Interestingly, the $101/head premium for PTIC heifers against PTIC cows for 2020-21 fiscal year can be interpreted in many ways, including the desire for producers to capture quality young breeding stock that can form the basis of a rebuilt breeding herd for most of the next decade. Given the very detailed assessment standards for PTIC cattle to be sold through AuctionsPlus, it appears as though many producers and agents undertook thorough research into the genetics being purchased, with some exceptional results for renowned bloodlines and targeted articles. Additionally, it was clear that the increased risk of calving PTIC heifers was offset, firstly, by the additional research undertaken by the buyers and agents, secondly, the ability to “fast-track” extra calves on the ground within the current market cycle, and thirdly, the long-term payback with purchasing young breeding stock.

Another clear feature of the PTIC market in 2020-21 was the confidence that many herd rebuilding producers displayed throughout the year. Producer confidence, especially into mid-2021, that the market would remain at its historically high level into 2022 helped to soften the impact of the initial purchase cost of the breeders. Looking at previous years, in 2019-20, which was predominantly drought, the premium was for PTIC cows over PTIC heifers, at only $22/head, while in 2018-19, the premium was almost non-existent, at only $9/head in the favour of PTIC heifers against cows.

In comparison, the heaviest AuctionsPlus young heifer category, 400kg+, registered only a 19% increase in prices for the 2020-21 year, averaging $1,786/head, with an 81% clearance rate for the 20,503 head offered during the twelve-month period.

Under the assumption that a portion of these heavy heifers will have been purchased for breeding purposes, the premium with PTIC heifers proves to be very interesting. The $495 annual average premium for PTIC heifers against the average heavy heifer may give an indication into the 2020-21 value of time (faster to calving), genetics and confirmation of pregnancy. In 2019-20, this premium was $68/head, and in the drought ravaged 2018-19, the premium was in favor of the heavy heifers by $54/head – no doubt reflecting the difficulty in finishing stock and absent risk premium for taking on future breeders throughout these years.

Selected 2020-21 results for PTIC heifers & PTIC Cows:

• 44 PTIC cows, Tumut NSW, sold to $4,020/head. 100% Angus, 5yrs old, average weight 671.2kg liveweight. Joined to Reiland, Rennylea & Landfall sires. Sold May 28, 2021.

• 18 PTIC heifers, Murringo NSW, sold to $4,010/head. 100% Simmental, 28-29 months old, average weight 651.1kg liveweight. Joined to Simmental bull. Sold June 11, 2021.

• 25 PTIC cows, Tyringham NSW, sold to $4,000/head. 100% Wagyu, 3-8yrs old, average weight 429.6kg liveweight. Joined to Wagyu bull. Sold March 19, 2021.

• 20 PTIC cows, Premer, NSW, sold to $3,675/head. 100% Poll Hereford, 5yrs old, average weight 745.6kg liveweight. Plantation Poll Hereford Cows. Sold March 5, 2021.

• 24 PTIC heifers, Glen Innes, NSW, sold to $3,500/head. 100% Angus, 17-18 months old, average weight 441.9kg liveweight. Eaglehawk Angus. Sold March 5, 2021.

• 20 PTIC heifers, Euroa, Victoria, sold to $3,410/head. 100% Angus, 26-27 months old, average weight 659.9kg liveweight. Joined to Coonamara bull. Sold November 13, 2020.

• 12 PTIC heifers, Mudgegonga, Victoria, sold to $3,350/head. 100% Hereford, 28-30 months old, average weight 612.8kg liveweight. Sold November 13, 2020.