With grass in paddocks there is opportunity to grow cattle out, so producers must consider their options and forecasts for the future. A 20% is not completely out of the question, from January 2020 to March 2020, the average price on AuctionsPlus for weaner steers rose 49%, from $834/head to $1,241. However, this was in the peak of the “grass fever” buying that was seen after widespread rain fell across much of the Eastern States of Australia. Since then weaner steers have only risen 0.4% to average $1,242/head. So, a 20% rise is not expected, even with more rain on the radar, the massive growth in the market has already happened. Can the market fall 20%? This is also unlikely; producers are keen to rebuild their herds after prolong drought. The Australian herd is at a very low point so there is not an plethora of cattle about, and there is no pressure to sell from drought anymore, as many people have grass to feed cattle. Finally, COVID has impacted the retail end of cattle markets to a degree, however these markets are diverse enough to not see a market fall of 20%. So, taking the above factors into consideration, January 2021 will likely see a stable cattle market for producers to sell onto. Thus, the question remains whether the potential profits in January outweigh benefits from selling in October and the impact that will have on paddock management, animal health and business costs.
The other piece to the puzzle is another enterprise option. Producers who are set up can also look at running lambs could look at spreading risk through growing lambs out. Seen below in Figure 2. purchasing $130/head store lamb in Oct and growing out at 300g/day sold in early January at a current locked in rate of $6.60 (dw) can draw $37/head.
