TL;DR: This winter, beef bull prices are expected to stay steady, but clearance rates may drop due to financial pressures on farmers. Cattle farmers will buy cautiously, focusing on essential spending and genetics. Despite challenges, high-quality bulls will still sell well. Breeders and buyers understand the financial difficulties and aim to make smart, long-term decisions.
Market Outlook
This winter, the average prices for two-year-old beef bulls are expected to remain steady compared to last year. However, PGG Wrightson’s national genetics manager, Callum Stewart, anticipates softer clearance rates. The beef bull market will likely feel the strain of the industry’s financial difficulties.
“Almost everyone on the farm is facing tough times with rising costs and static or falling returns,” Stewart noted.
Buying Caution
Commercial cattle farmers will be cautious when purchasing bulls. They aim to make every dollar count, focusing on essential spending.
Stewart added, “While there will be no compromise on genetics, some farmers may reduce bull numbers, similar to the trend seen with ram sales.”
Influence of Sheep Market
The sheep market’s downturn is likely to affect beef bull purchases this winter.
Bruce Orr, a veteran Carrfields stud stock agent, said, “The lamb price greatly influences what sheep and beef farmers will pay for bulls and how many they will buy. We’ve been saying for years that bull numbers on offer exceed demand—this might be the season it happens.”
Impact of Forestry
Orr highlighted the loss of beef farms to forestry, especially noticeable during his months on the east coast.
Condition of Sale Bulls
NZ Farmers Livestock agent Brent Bougen reported an outstanding growing season in Waikato and King Country, resulting in high-quality sale bulls. “Good bulls will continue to sell well. I have seen many excellent bulls in my travels,” Bougen said.
Weaner Prices
He added that good weaner prices for steers and heifers might boost confidence in bull sales. “We have to be optimistic,” Bougen said.
Stable Cow Numbers
Stewart mentioned that the loss of cattle land to forestry was a significant factor in 2023. This year, however, cow numbers have stabilised, possibly even increased.
Meeting Market Demands
Stewart believes breeders who have limited bull numbers and focused on demanded genetics will meet market expectations. “Breeders who have read these signals should find the market satisfactory,” he said.
Genetic Objectives
Most buyers will prioritise three to five genetic goals, such as increasing profitability through carcass weight traits and performance. Good selections made at upcoming sales will benefit future generations. “Genetics is the major influence on your herd,” Stewart emphasised.
Long-term Consequences
“The progeny from a bull purchased now will be born over the next three years, slaughtered over the next four, and female progeny will be used for breeding over the next decade. Selection decisions have long-term impacts and will pay off over time,” Stewart explained.
Competition and Quality
From the buyers’ perspective, high-quality bulls and increased competition among breeders are positive. “As long as the quality is high, competition is good news,” Stewart said.
Regional Differences
PGG Wrightson’s auctioneer, Cam Heggie, reported that bulls in King Country and Waikato are looking superb, while some breeders in Northland need rain before their sales. Catalogues show 10-15% fewer lots in some cases.
Breeders’ Understanding
Breeders understand the financial challenges farmers face. Heggie noted, “Bull breeders are beef farmers too, and they understand the financial factors at play this year.”
In summary, while the market for beef bulls this winter faces challenges, careful selection and meeting genetic demands can lead to positive outcomes for both breeders and buyers.
