Spring is a busy and bustling time in the cattle industry, as bull sales begin to wrap up and producers’ minds turn to joining regimes.The herd rebuild is continuing and producers are looking to increase the number of females joined, with the number of females in AuctionsPlus Eastern States sales in recent months contracting. It has also increased the demand for unjoined heifers, as producers weigh-up their options for bolstering their breeding herd.
In the previous MarketPulse article we highlighted the value of ‘time saved’ regarding rebuilding purchases and the significant premiums achieved by PTIC heifers over heavy heifers, due to having a calf on the ground earlier and therefore receiving a return on the initial investment sooner. Analysis of AuctionsPlus commercial cattle prices has revealed this premium has diminished and producers have shown a preference for ready-to-join heavy heifers. In Figure 1, it is evident that the average PTIC heifer price has declined significantly from its peak in January, while the average 400kg+ heifer price has remained high – reducing the premium between the two from about $800 in January to $200 in August 2022 (Figure 2).
One of the reasons behind the reduced margin is that producers are prioritising quality, genetics, and the use of their “new” bulls for Spring joining. This also demonstrates confidence in the season ahead, with producers’ seemingly comfortable looking well into 2023 to grow out and expand breeding operations and overall herd numbers.
Discussions with various producers has confirmed they are taking the opportunity to increase the number of females to join this Spring. Not only to increase numbers in the long-term, but to increase the return on their investment in bulls and potentially re-sell the heifers as PTIC in February/March 2023. There are several motivations behind this strategy:
1. Improved utilisation of excess Spring feed