Bull price averages heavily tied to strong cattle returns

A rising tide lifts all boats — at least that’s what Rayner Ag’s Alastair Rayner says of the current bull price explosion. Read his analysis.

Stellar bull averages — in the range of $14,000 to $16,000 — should not be unexpected and are relative to the strong prime and store cattle returns.

And while averages have lifted dramatically compared to last year, its lift is relative according to Rayner Ag principal Alastair Rayner.

A reset of values started in commercial cattle and now genetic suppliers were seeing big lifts, Mr Rayner said.

“There is a rough formula that shows you should expect to pay about 4.5 times the price of a heavy steer for a bull, and about seven to eight times the cost of a yearling or weaner,” Mr Rayner said.

“When weaners were making $1000, a bull was costing $7000 to $8000 so when weaners are making $2000, it follows that a bull is making $14,000 to $16,000.”

With bull averages skyrocketing, Mr Rayner said it was essential to be spending the bigger outlay on the right genetics.

“A proper assessment needs to be done, it needs to have Estimated Breeding Values and producers should not be tempted to try to find cheaper sources of genetics,” he said.

“Stay with the trusted breeders, because to spend $10,000 to $12,000 on a bull with no performance recording (EBVs) is madness.

“There are people who are stuck in the dark ages who will spend $3000 to $4000 on a bull and think they have done well but it is just false economy.”

Mr Rayner said the industry was seeing the impacts of the drought, where many stud breeders decreased their female herds, with fewer bulls produced.

There had also been commercial producers who had held on to their bulls a year longer than normal, increasing demand for sires this season, as well as those who were either going into breeding cattle or expanding their herds.

Mr Rayner said while some producers may feel they were outclassed when trying to secure bulls this year, it was important to still select sires which would boost herd improvement.

“Some people may get fixated on growth and want to be buying bulls that are in top five or 10 per cent of the breed, and they may make the most money,” he said.

“Instead, I would be focusing on the index values rather than worry about individual traits.

“If you choose bulls that are in the top 15 per cent say for the southern self replacing index, then you can go through and eliminate any that don’t meet your other criteria like birth weight, for example.”