theindependent - ciaa · price volatility mean that all forward contracts for electricity are...

TheIndependentPublished by CIAA - a Platinum Operations companyJuly 26th 2016 Issue 7www.ciaa.com.au

94 Old Port Wakefield Rd, TWO WELLS SA 5501 www.ciaa.com.au

IN THIS ISSUE

By MICHAEL LAMONT

There is no such thing as a secret in the livestock marketing

industry. So, it was no surprise to see the management heavyweights from the four selling agents at Dublin congregate at the yards after the completion of last week’s cattle sale.

It has been an open secret for weeks that there were moves afoot to rearrange the cattle selling at Dublin. There appears to be a fairly strong push from some quarters to change the selling to a Tuesday afternoon after the completion of the sheep and lamb sale.

There are plenty of plausible reasons to support the change, declining numbers moving through the sale at Dublin has been worrying agents, vendors and buyers for some time and a lot of opinions have been aired privately about why numbers have reduced and how to remedy the

situation.The pro change lobby have a

reasonably powerful argument, the immediate argument is that Naracoorte and Mount Gambier are able to conduct sales of 2,000 cattle and 20,000 lambs in a single day without any great deal of difficulty, transport from the more far flung regions of the state could be more easily co-ordinated if mixed loads of sheep, lambs and cattle could be delivered at Dublin on a Monday and because of the popularity of the Dublin lamb sale, there is a much larger array of buyers in situ and they would be able to operate on the cattle sale.

The anti-change group have just as many valid concerns surrounding change, just for changes sake. Dublin is a stronghold of small butcher competition, especially this time of year. There are a coterie of cattle feeders who are close to Dublin, who send small drafts of lightweight, grain fed yearlings to satisfy this small

butcher demand, from the butcher’s perspective, they are happy to satisfy their weekly requirements on a quiet Monday morning. As a pure logistical exercise the change would create many difficulties for Livestock Markets Ltd, staffing levels and the ability to retain or recruit staff would be limited.

My personal point of view is rather divided, I can see the argument for change as having a great deal of validity, however there are deeper concerns that bother me. It annoys the living daylights out of me that one of the best selling facilities in Australia is underutilised because there are agents of all hues advising their clientele (including a few little untruths) to sell elsewhere. I have been told face to face that the prices at Dublin are not as good as elsewhere, in part this is true but certainly not as a blanket rule.

Horses for courses should be the by-word in the marketing of cattle, not just changing the course!

The Dublin cattle debate gets serious!

Alice Springs Show Sale, Pg. 2

Australian Cattle Industry Projections - July 2016 Update

Pg. 4-5

http://www.ciaa.com.au


2


Upper Left: Eastern Young Cattle Indicator graphLower Left: Northern Trade Lamb Index graphBoth graphs indicate cents per kilogram carcase weightAll graphs and information courtesy of Meat & Livestock Australia’s National Livestock Reporting Service.

20152014 2016

It’s a joke, Joyce!A circus was touring throughout South Australia when they had an unfortunate staff loss when their lion tamer was devoured by his charges. The owner of the circus advertised immediately for a

replacement without much hope of finding anybody on short notice.Much to his delight he had two applicants and hurriedly arranged

interview times, the first applicant turned up and this young , strapping specimen displayed his prowess. He put the lions up on

stools and even had the recalcitrant pride jumping through hoops of fire in an impressive display. The relieved circus owner was about to offer the young man the job when the second applicant arrived and

caused him to hesitate. The second applicant was young, blonde and all too obviously a woman, she wore the traditional front buttoning

jacket favoured by circus performers and had a set of pins that made the circus owner drool. She was invited to enter the cage and display her lion taming prowess, her skills seem to lack the authority of the first applicant and they almost panicked when the biggest male lion

raced up to the female tamer in an aggressive manner. Instead of cowering before the ferocious beast, the girl simply tore open the front of her tunic and the lion began to lick her more like a kitten than a rampant king of the jungle. The circus owner was ecstatic,

the success of his circus was assured with such a show. He turned to the first applicant and said, “mate, do you think you could do that?”.

The first applicant replied with fervour, “get rid of that bloody lion and watch me!”

20152014 2016

Alice Springs Show Sale

Alice Springs pastoralists presented more than 2,500 weaner cattle at their annual store cattle sale which was held on Thursday, July 21st.

Generally, the presentation of the Hereford, Hereford/Angus and Santa/Droughtmaster cross cattle were milk and 2 tooths, and ranged in weights from 270-400kg. The majority of the cattle were in good fresh forward store condition - ideal cattle to be backgrounded or finished in a feedlot.

Strong demand from many South Australian agents and buyers and Eastern seaboard based feeders and

feedlotters pushed the top price Angus/Hereford cross steers weighing 350kg to $3.54c/kg liveweight.

This outstanding run of steers was presented by Lucy Creek Station - they were the largest vendor on the day penning just over 1,000 cattle. The top price steers sold to Jack Rowe of Princess Royal.

The Lucy Creek cattle were yarded by the Ruralco team and they had plenty of competition with most of the steers weighing 300-380kg and making, on average, $3.40c/kg. The buyers that snapped these up mostly came from SA - with Coolalie, Princess Royal, Korunye Park and Keringa feedlots taking about 200 each. SA graziers from Naracoorte, Murray Bridge and Port Lincoln secured another 400 cattle.

Teys Bros Charlton secured the heaviest pen of Santa cross steers on the day at $3.38c/kg and eastern states based agents GDL Dalby and Davidson and Cameron secured lines of steers at an average of $3.35c/kg.

Due to the good season in most parts of the Alice Springs pastoralists are retaining a lot of their heifers and, as such, there were not many heifers yarded. Heifers that were yarded still averaged $3.30c/kg for the best of them that weighed 320kg.

Another sale is to be held in Alice Springs on Thursday, July 28th - this will have a yarding of a few feedlot ready type cattle, but it will also have cows, heavy 4/6 tooth steers and bulls to be sold.

By WAYNE HALL


http://www.mla.com.au/Home


3

Adelaide 7 Day Weather ForecastTUE

July 26

Rain11/9

WEDJuly 27

THUJuly 28

FRIJuly 29

Partly Cloudy13/9

Cloudy14/8

Partly Cloudy15/8

SATJuly 30

Mostly Sunny17/11

SUNJuly 31

Sunny16/10

MONAugust 1

Rain15/8

Information courtesy of weather.com & willyweather.com.au

It's an ill-wind

Very unfortunately our state’s electricity prices are the

highest in the nation, but it did not need to be that way. South Australia has the highest and Victoria has the lowest prices of all states and both these states have privatised energy markets. The difference is the Victoria government has developed the right energy mix (primarily wind, solar, gas, coal) to meet demand under varying weather conditions. In SA we have an overabundance of wind farms which produce an excess of electricity all at the same time when it’s windy forcing prices down for a period of time. This might

seem good, but because it takes 24 hours to turn on and off a coal fired power station it can’t respond to the weather. This forced the Port Augusta power station to regularly operate below cost. Eventually it was forced to close taking with it a large chunk of our state’s base load supply. The problem we have now is that when it’s not windy we don’t have enough base load supply to meet demand and generation prices race upwards. This insecure supply and dramatic price volatility mean that all forward contracts for electricity are offered at very high prices.

Interconnection between states helps soften some of the spikes, but what ends up happening is that we import coal fired electricity from Victoria – so we haven’t saved the

environment and we’ve lost the jobs.Now of course we should pursue

renewable energy to reduce pollution, but until that energy can be stored on a very large scale so that we can use it when the wind is not blowing we must have the right range of options in place to meet demand at a fair price regardless of the weather. The Port Augusta power station won’t operate again, but the government must take steps to ensure no other base load supplier closes until wind energy can be stored. The best way to do this is to not approve more wind farms that put more electricity into the market at the same time as we already have more electricity than we can use.

Dan van Holst PellekaanMember for Stuart

By DAN VAN HOLST PELLEKAANDan's the Man

Left & Right: (centre) CIAA auctioneer Daniel Griffiths auctioneering the sheep at the South Australian Livestock Exchange on July 19th, 2016.


http://weather.com

http://www.willyweather.com.au

http://www.danvhp.com.au/


4

Australian Cattle Industry Projections - July 2016 Update

Halfway through 2016, the Australian cattle industry finds itself in the middle of conflicting forces. On the one hand, recent widespread rainfall has reinforced the expectation of tighter cattle availability over the coming 12 months, sparking fierce restocker competition that has led to a sudden surge in cattle prices. On the other hand, global beef prices have softened further from their record highs in 2015. This mid-year cattle market update aims to shed light on the cocktail of uncertainty.

The world cattle market remains in two different leagues. These are closely aligned with North American grainfed production and the grassfed systems used across most of the rest of the world.

On the one hand, Canadian and US indicative prices are significantly higher than their global counterparts, despite having softened from their highs in mid-2015 and production expectations for the remainder of the year suggest that the weakening market will continue.

At the same time, in A¢/kg lwt terms, the South American markets are strengthening on the back of improved market access for Brazil and Argentina and contracting supplies in Uruguay and Paraguay. While all of these markets have generally improved in recent months, they continue to lag those elsewhere in the world, largely as a result of weaker currencies.

Australia’s indicative pricing currently sits between the two regions. The Australian heavy steer indicator averaged 312¢/kg lwt during June, buoyed considerably by the rain induced tight cattle situation, and is likely to remain high for at least the winter months.

It is unlikely average Australian finished cattle prices will overtake the US and become the dearest cattle market amongst the major exporters, largely as a result of the greater trade exposure and significantly fewer grainfed cattle. But the very narrow gap may in fact continue to tighten, based on the diverging production situations in the respective markets, while weak currencies will keep South American cattle prices below Australian prices for the foreseeable future. While coming very close to US cattle prices may be deemed as a milestone for Australian producers, it could also be an indication that a ceiling has been reached.

Introduction

Australian cattle market prices in a global context



5

Australian beef and veal exports for the year to June have receded with production, and are down 18% year-on-year, at 528,599 tonnes swt. Encouragingly, the chilled (higher valued component) was down to a lesser extent than the frozen volumes, with the chilled volume at 144,947 tonnes swt, down 9% year-on-year.

The projected volume for 2016 remains just above 1 million tonnes swt, down 20% from the back-to-back record years, but still be the fourth highest volume on record. Looking beyond 2016, shipments will more than likely contract with production again in 2017, before slowly gaining momentum from there and reaching 1.17 million tonnes swt in 2021.

Of the primary markets for the year-to-date, the US has been slower compared to the same time last year, especially for frozen grassfed beef. Japan has also been challenged by competition with the US, although grainfed export volumes remain at reasonable levels. In Korea, shipments have held up extremely well, as the third KAFTA tariff cut is assisting the competitiveness of Australian product compared to the more expensive domestically produced Hanwoo beef.

China continues to demand a historically high proportion of Australian product, with industry suggesting the northern hemisphere summer should continue to drive imports. Competition in China is growing though and latest Global Trade Atlas data suggests May export volumes from Brazil to China were 20,286 tonnes swt, compared to Australia's 8,433 tonnes swt during the same month. The Brazilian volume has now totalled 168,900 tonnes swt since re-entry in June 2015, compared to Australia’s128,083 tonnes swt over that same period.

On the domestic market front, despite strong export demand combined with contracted beef availability, domestic utilisation is forecast to hold steady with last year. The large year-on-year decline in per capita consumption from 2014 to 2015 is not expected to be repeated in 2016 and 2017 but is still expected to move gradually lower over the forecast period. This is encouraging considering the domestic situation has been challenged by rising retail beef prices, which for the March quarter (latest data) were the highest on record in nominal terms, at $19.16/kg rwt.

The Australian cattle market is likely to remain supported for the remainder of 2016 as a result of the positive rainfall outlook, expectations of abundant feed availability during spring, strong restocker competition and no indications of a sudden strengthening of the A$. Producers need to be mindful, however, of the price adjustment that will eventually occur as a result of the lowering export prices, and eventual recovery in beef production in Australia. It is unclear exactly when this will happen, and to what extent prices will go down in the next cycle, but it is something that producers should be wary of while making longer term cattle investment decisions with restocking prices at such high levels.

Exports and the domestic market

Conclusion - Australian Cattle Market

Information taken from the Australian Cattle Industry Projections 2016 - July Update. Courtesy of Meat &

Livestock Australia



6Incorporating dual-purpose crops in

your pasture feedbase systemCSIRO researcher Dr Cesar Pinares-Patino presents part two of his findings from an MLA-funded, interlinked

research project which is looking at grazing dual-purpose wheat and canola. The goal is to increase sheepmeat production while reducing business risk in the high rainfall zone.

- Inclusion of dual-purpose wheat and canola in a grazing system reduces the autumn/winter feed gap during poor growing seasons- In good growing seasons, benefits from dual-purpose crops (DPC) come from higher grain production- The proportion of the ‘farm’ devoted to DPC (one-third) in the experiment now seems too high, because it is placing pressure on pasture availability/composition- The optimum proportion of farm area devoted to DPC needs further research, but probably should be no higher than about 15–20%, given present knowledge- Lack of rain post-sowing is the major risk when establishing DPC.

The facts on DPCs are well established - they can fill the winter feed gap and hence reduce supplementary feeding, with little penalty in grain yield and at the same time spell pastures for later grazing.

What is unknown, and being explored by the MLA funded research, is what is the optimal area to be sown to DPCs.“The introduction of DPC into a pasture-only livestock system will reduce the area of pasture available for grazing,

producing changes in the livestock carrying capacity of the whole farm," Dr Cesar Pinares-Patino said.These changes have been previously studied using experimental modelling (a study funded by GRDC) and more

recently measured directly in MLA-funded experiments using a fixed stocking rate at Canberra.The four-year system study at Canberra is being conducted with breeding Merino ewes and their weaners.“Dual-purpose canola and wheat in the system that incorporates cropping are contained in one-third of the total

farm area,” Cesar said.“The rotation is canola – wheat – first-year pasture – second-year pasture – canola, and so on.“The plots devoted to DPC cropping and permanent pastures are fixed from year to year and the stocking rate in

summer is 8.7 sheep/ha (4.35 ewes + 4.35 weaners per ha of total area).”

The experiment has confirmed previous findings from GRDC-funded research that there are clear advantages (e.g. filling winter feed gap, improved animal performance and higher gross returns) from having the extra feed and grain production that is provided by inclusion of DPC in the grazing system.

However, the experiment is also indicating there is an optimal amount of crop within a DPC-pasture farming system.

“Over the first three and half years of the study, pasture condition in the pasture-only system has been maintained, whereas pasture condition in the DPC system has deteriorated,” Cesar said.

“There is now low pasture cover and increased presence of weed species, with animals requiring more supplementary feeding during summer and autumn than animals in control treatment.

“These findings indicate the proportion of land devoted to the DPC in the experiment is higher than the optimum for this particular system because it is affecting the sustainable productivity of pastures.

“More research is needed, but given present knowledge, the optimum proportion of farm area devoted to DPC cropping should probably be no higher than about 15–20%.”

Cesar said the proportion of the farm devoted to DPC crops and the number of livestock that can be supported during summer – the most critical period of the year – are the two main management decisions determining the potential benefits and risks of incorporating DPC in the system.

Key Points

Key Points

Impact on Pastures

Information courtesy of Meat & Livestock Australia


7

SAL North West Tumby BayColin McFarlane - 0457 736 285

Rodwells WoolbrokingChris Vordermaier - 0488 043 304

*in conjunction with Elders Tumby Bay

I was born in Swan Hill, Victoria and I went to school in Ballarat for 7 years until coming home to the family

farm at Ultima, Victoria We sold the farm in 1990 and moved to Adelaide in 1991. In 1992 I moved to Mallala to get back to country living. I am married with 3 grown up daughters.

I started working with Dalgety Bennett Farms in 1991 at their wool store in Port Adelaide until moving to Cavan in 1992 to run their merchandise warehouse.

I continued doing this when Wesfarmers brought out Dalgetys in the mid 90’s.

After a 10 month stint at Jamestown in 1998, I returned to Cavan to manage Wesfarmers state warehouse.

In 2001 I left Wesfarmers and took up a role with Elders as a merchandise salesperson at Dry Creek.

In 2003 I moved to Roseworthy to continue with this role on the Adelaide Plains. In 2005 I moved to Balaklava to take on a dual role with merchandise and livestock, and I continued in this role until 2009 when I moved to Virginia to become Branch Manager at the Elders store there.

In 2011 I returned to Elders at Roseworthy to take up a role as a TSM on the Adelaide Plains and the Barossa finally working the area that I have a real love for – working with livestock.

In June 2015 I left Elders to continue my career in livestock and started my own business under the Platinum/CIAA banner as Jones Livestock - it has been a very exciting 8 months.

Profile - Richard Jones

http://www.collandranorth.com.au


8

Char-grilled Beef Skewers with Tomato Vinaigrette

Ingredients- 4 beef sirloin steaks- 2 red onions, cut into wedges- 1/3 cup olive oil- 3 tomatoes, peeled and chopped- 1 clove of garlic, peeled and chopped- a pinch each of sugar, salt and pepper- 1tbsp chopped parsley- 2tbsp red wine vinegar

Method1. Cut each sirloin steak into cubes, thread on to metal skewers with red onion wedges. Brush each skewer lightly with oil. Season with salt and pepper. Preheat the char-grill pan to hot before adding the meat.

2. Let the beef skewers cook on one side until moisture appears before you turn. Cook for 2-3 minutes on each side. Remove from the heat and cover loosely with foil, rest skewers for 3 minutes before serving.

3. Serve beef skewers with the warm tomato vinaigrette.To make the tomato vinaigrette: heat the oil in a small pan, add the tomatoes, garlic, sugar, salt, pepper and parsley. Cook over a high heat for one minute to just soften the tomatoes. Stir in red wine vinegar.

Recipe from beefandlamb.com.au

Market News & Reviews!

What a mixed bag of results for the past fortnight,

lamb prices have been up and down and have followed the supply and demand rule like an economics lecturer would be proud of. Price fluctuations of $20/head for heavyweight crossbred lambs over a period of a fortnight isn’t good for anybody, buyers and vendors would prefer a bit of stability to these volatile swings.

The one very encouraging sign in the lamb market was the emergence of some very good new season’s lambs, crossbred suckers ex Eudunda

in the CIAA catalogue sold to $158.00/head, a pleasing result for the agent and vendor.

Sheep prices have been strong as expected as the numbers dwindle and demand remains solid, shipping

wether orders for the end of July should further strengthen the mutton market.

The cattle market just keeps keeping on and on, there was a stage when it appeared as though domestic buyers had reached the limit of their

capacity to pay, then all of a sudden there is a rush to secure as many fat cattle as possible at gob-smacking prices. CIAA clients realised up to $3.94/kg for lightweight heifers and even older 2 tooth Shorthorn heifers

made a touch under $1,900/head.

The piece de resistance was the calf market at Dublin this week, me, nor anyone else present has ever seen buyers bid with such determination at

a normal sale, lightweight black baldy heifer calves to $760/head is a fair indication of the prevailing mood of the crowd.

The message is, if you have saleable cattle, now is the time to quit them!

By MICHAEL LAMONT

"one very encouraging sign in the lamb market was the emergence of some very good new season’s lambs"


http://beefandlamb.com.au

9


RIPPIN’ RESULTSRJ, LL & SJ Greenslade

Urania5 Angus cross steers to $3.67/kg averaged

$2,033.18 at the Southern Livestock Exchange, Mt Compass 20/7/16

CJM Trading NomineesBirdwood

46 steers to $3.79/kg averaged $1,885.45 at the Southern Livestock Exchange, Mt Compass

20/7/16

SP BlieschkeMelrose

1 Steer Calf $765/hd, 2 Bull Calves $685/hd, 4 Heifer Calves $760/head. South Australian

Livestock Exchange, Dublin 25/7/16

IB & MA WestbrookArthurton

20 crossbred lambs made $174 per head at the South Australian Livestock Exchange, Dublin

12/7/16

Schutz Family TrustEudunda

109 crossbred sucker lambs made $158 per head at the South Australian Livestock Exchange,

Dublin 19/7/16

MJ & CJ ReddingSandilands

6 Hereford steers to $3.67/kg averaged $1,596.78 at the Southern Livestock Exchange,

Mt Compass 20/7/16

Broughton Hills Pty LtdYacka

12 Angus/Angus x Hereford Heifers to $3.94/kg averaged $1,295.98 at the South Australian

Livestock Exchange, Dublin 25/7/16

BJ & DG WestbrookKadina


12/7/16

CR AndrewsMoonta


12/7/16

Bindmurra Pty LtdBlanchetown

61 wethers made $126 per head at the South Australian Livestock Exchange,

Dublin 19/7/16

Wardle Co(08) 86 362 351

Jeff Emms0408 803 427

Garry Willson0428 845 889

Willson Livestock

Jeff Emms0408 803 427

Lamont Livestock Michael Lamont0428 127 478

Mark Carter & Co Mark Carter0418 825 673




Platinum Livestock(08) 81 305 000


10

CIAA94 Old Port Wakefield RdTWO WELLS SA 5501Ph: (08) 85 203 131Fax: (08) 85 203 121

AdministrationKylie Kemp: 0409 304 186Marnie Burt: 0419 828 511Livestock ManagerTex O’Brien: 0418 835 156AuctioneersJeff Emms: 0408 803 427Peter Pinkerton: 0428 838 196Craig Barbary: 0428 817 811

www.ciaa.com.auwww.facebook.com/ciaalivestock

BURRAAndrew Butler0407 399 772GP Livestock

ONE TREE HILLGraham Phillips0408 802 280

GUMERACHAJeff Emms

0408 803 427KW Livestock

SPALDINGKeith Pluckrose0428 452 199

BALAKLAVA Peter Butterfield

0417 884 877

PARNDANA Terry May

0438 451 981Nathan Trethewey

0427 395 571

Keilem

ALL AREAS Tom Wardle

0418 810 363Craig Reschke0408 853 541Trevor Cleland0407 601 074

Tony Clark0427 363 161Julian Burke

0458 542 615Peter Wardle0458 484 422

EYRE PENINSULARichard Hill

0427 272 311Ben Dickenson0437 967 643Henry Zwar

0427 797 455Scott Masters0458 517 883

Willson Livestock

KADINAGarry Willson0428 845 889

Mark Carter & Co

ARDROSSANMark Carter

0418 825 673Luke Carter

0429 679 033

ALL AREASJonathan Spence

0427 084 951Rodney Dix

0429 818 490David Cox

0439 847 781Kym Lovelock0407 711 337Daniel Doecke0458 748 262Mark O’Leary0429 814 998Luke Schreiber0429 817 274Joe Scammell0429 112 664

Daniel Griffiths0437 486 771

YANKALILLA Greg Weber-Smith

0419 867 801John Rye

0407 547 205

KIMBABronte Kenchington

0457 740 220Colin McFarlane

0457 736 285Bradley Hier

0457 737 864Warren Brown0457 736 544

Nathan Johnson0457 735 449

ALL AREASWayne Hall

0477 064 407Craig Barbary0428 817 811Toby Cousins0429 068 964

Ben Dohnt0437 856 327Adam Bradley0428 838 285

Simon Rosenzweig0427 887 705

Matthew Pawley0458 423 513

STRATHALBYNTim Callery

0408 366 185Malcolm Collett0408 826 543

NARACOORTELaryn Gogel

0459 620 904Darryl Napper0429 640 234

Jones Livestock ServicesMALLALA

Richard Jones0448 071 505

WUDINNA Brian Durdin0428 272 922

Warren Beattie0428 899 004

Geoff Williams Livestock & RuralFLINDERS RANGES

Geoff Williams0407 797 357

The PhantomAs we flagged in the last

edition of “The Independent”, National Livestock Reporting Service reporter, Michael Lamont has finished supplying the reports from Dublin and Mount Compass markets.

There are no clues at this time as to the future plans for the “Country Hour” voice of the

markets but it seems assured he will remain in the industry in some capacity.

This revelation will be heartening news for some and a source of dismay and annoyance for many!

Thomas Foods International buyer, Phil Heinrich is out of action temporarily. Apparently

Phil was returning from an interstate holiday and suffered some respiratory and chest unease and wisely sought medical help.

A few stents and some attention from cardiac specialists arrested the problem and he is nearly as good as new, fortunately Phil was well enough aware of the problem that he could avoid any worse outcomes. A valuable lesson to all of us!

Mouthpiece Muzzled!

On the sick list!


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