Hopes hinge on rain as livestock prices pummelled

The fortunes of rural Australia hang on crucial spring rain as the nation’s farmers face some of the biggest headwinds in years.

The fortunes of rural Australia hang on crucial spring rain as the nation’s farmers face some of the biggest headwinds in years.

While the outlook for cropping remains strong for those who have snagged a season, it’s a dramatically different situation for livestock with lambs, sheep and cattle prices all buckling under a weight of numbers.

Friday marks the first day of spring which experts say will point to a real test for producers following a dream run of three years of improved seasonal conditions, record commodity prices and low interest rates.

While pockets of Victoria and southern NSW are enjoying a good season other regions such as East Gippsland and much of northern, central and western NSW as well as southern Queensland are drying rapidly.

Now there are fears stock from those areas will overwhelm an already stretched market for both sheep and cattle, forcing prices down even further.

Nutrien southern livestock operations manager Ron Rutledge said the market was suffering from a hangover of stock from last season, and poor seasonal conditions would only exacerbate this.

He said producers needed to set realistic reserves when selling if they wanted to quit stock.

“For some stock like Merino wethers, that could be as little as $1/kg or maybe even less,” Mr Rutledge said. “Processors are doing a fantastic job trying to process everything but there’s just a flood of stock.”

The current seasonal outlook paints a picture of mixed fortunes for the grains and cropping sector.

Those located north of Dubbo NSW say the season is fast cutting out due to lack of rain.

In contrast, in the Riverina and much of Victoria, crops are described as magnificent with excellent soil moisture.

Quambatook farmer Brett Hosking said many farmers in his state were feeling surprisingly good about the season.

“A lot of farmers went into this year feeling like it was going to be a pretty challenging year,” Mr Hosking said.

“There were a lot of warnings about El Nino, even a major El Nino, there was a lot of doom and gloom.

“I think for Victorian farmers. in particular, we are feeling quite blessed.”

Agronomist and farmer Don Kirkpatrick, at Mangoplah NSW, said crops in his region had benefited from handy rain.

“Canola is pretty much in full flower everywhere now, and the crop looks good,” Mr Kirkpatrick said.

Prices were also holding up well, he said, and while values weren’t at the extreme highs of last year, returns from $674 to $735 a tonne for canola-fuelled optimism.

“Anything more than $600 for canola is good,” he said.

Australia is on track to produce one of its biggest canola crops.

Southern Australia is expected to contribute heavily to Australia’s third-largest canola crop on record, according to the Australian Oilseeds Federation.

Cropper Greg Gall of Goorambat said he couldn’t ask for a much better season.

“We are now at the pointy end of the season, and we still have plenty of (soil) moisture,” he said.

But not all of eastern Australia has been so lucky.

Greg Gall, with his grandson Bodie, 9, Goorambat. Picture: Yuri Kouzmin

Queensland farmer Andrew Earle, of Thallon, only planted about 5 per cent of the 16,000 hectares of wheat he would normally get in the ground, and estimated that 400,000 hectares lay barren in the northwest corner of NSW and southern Queensland.

It is the fourth “wipe-out” year he has experienced in his career, after 1994, 2002 and 2018.

Mr Earle estimated the poor season could wipe 3.5 million tonnes from the region’s winter crop considering complete misses and reduced yields.

He said staring at empty paddocks was an “incredibly challenging” time both mentally and financially.

Compounding the issue is that many of the area’s grain farmers also run sheep, with Mr Earle “drought-feeding” 5500 head.

“Producers nearby sold some lighter stock at the Dubbo saleyards and the return to them was $5 a head last week,” he said.

“We are spending money on very expensive feed for animals that are not worth a lot of money now, but potentially will be when drought breaks. And it’s indefinite, you don’t know when the rain will come.”

The repeated predictions of El Nino are also impacting on the livestock market, with some producers fearful of restocking.

Last week’s Wodonga store sale was described as solid, but competition was flat with little spirited bidding as buyers are cautious about restocking.

This has helped force the Eastern Young Cattle Indicator down to just 499c/kg carcass weight early this week — a massive 542c/kg lower than this time last year. It dropped 29c/kg in the past week alone.

And in sheep markets, prices as low as $2 have already been seen while large drafts of Merino wethers offered on Auctionsplus last week failed to attract a bid.

Meanwhile the dry conditions have already raised concerns about bushfires this summer, months ahead of potential problems.

The Australasian Fire Authorities Council seasonal bushfire outlook found a “higher than normal” potential for bushfires in far east Gippsland, especially along the coastline and in bushland where vegetation was unburnt or only lightly damaged by the 2019-20 fires.

It also said that “elevated grass fuel loads will likely cure earlier than most years” in agricultural areas in the state’s northwest and present “an elevated risk until harvest occurs”.