By John Bowman, Livestock Extension Officer, Leongatha
PRIME market prices and store market prices are at an all-time high. So can you make a profit from a cattle trading enterprise?
Let’s look at some of the components of a cattle trading business and consider some of the options.
Over recent years steer traders have had the advantage where there was a slow constant climb in the prime market price.
They were then in a position to take advantage of the store market price easing during mid-winter or the end of summer.
However this hasn’t been the case this year as the prices have remained high.
Currently any kilogram of live weight that you are able to put onto an animal will attain a high price in the current prime market; the difficulty is replacing that animal once it is sold.
The old adage of buying in the same market as you have recently sold in is often spoken about to ensure you have a margin between the finished animal sold and the new lighter animal purchased.
Purchasing stock that are in forward store condition that will finish earlier than backward store animals gives a quicker turnaround time and is recommended by some traders.
Others prefer buying a younger, smaller animal which has the potential to grow out and gain more weight over a longer period.
Heifers may be a good buying option due to a shortage of breeding females resulting from the extra slaughter numbers in recent months.
There is also the option of joining heifers and offering them as springing heifers or cows with calves at foot next spring, but this is a longer term option.
A shorter term option is to purchase light weight cull beef cows from the “chopper market” and add extra kilograms of live weight, then return these cows to the prime market pre-Christmas or early next year.
It is surprising how quickly these beef culls freshen up on good spring pastures.
Light weight cows bought in at $2.20/kg of live weight and finished beef cows at $2.60/kg of live weight based on current day prices, presents a possible margin opportunity.
You could do the same sums on well-bred steers yourself and compare the two options.
Other options are:
• to fully feed the cattle you already have at home and grow them out at a higher weight gain.
• cut some silage and hay to utilise excess feed.
• shorn store lambs will be coming on the market soon and they could finish in six to 10 weeks depending on purchase weight and will give a quick turn around and the conversion of excess spring pasture into saleable lamb live weight will be quite efficient.
Key tips to consider:
• do your sums to make sure there is a proper margin.
• seek sound market advice, and keep your local stock agent in the loop.
• cost out the options to ensure you have a margin from the transaction.
• keep the stocking rate low to gain more kilograms per animal in the shortest possible time.