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Cattle prices forecast to jump when drought breaks as farmers forced to sell breeding stock

Nathan Morris, Thursday January 9, 2020 - 14:04 EDT
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Mick Cosgrove's primary concern is not his future, but that of the younger farming families in the district. - ABC

The relentless drought is seeing more breeding female cattle sent to slaughter, with industry leaders warning of significant price increases when the long dry does break.

And with the Bureau of Meteorology not forecasting any improvement until March, those relying on cattle for cashflow are bracing for tough years ahead.

"As of this week we've sold 124 breeders out of 150. And their calves, 104 calves we've sold," said Mick Cosgrove, a cattle producer from Bell, three hours north-west of Brisbane.

The cost of keeping cattle during the drought has beaten most, and the nearby Dalby saleyards recently had their biggest yarding in a decade.

"There would be people's livelihoods being sold up at the moment, to make way for the lack of feed and water," auctioneer Peter Bird said.

Some pens of calves have been sold off for $10 a head, less than the saleyard fee.

"It's a forced sale, it's things we unfortunately have to do because of the weather," Mr Bird said.

In 2019, 58 per cent of all cattle slaughtered in Australia were female, up 10 per cent, according to Meat and Livestock Australia (MLA).

"When it comes to purchasing heifers to replace them, that's when it'll start to bite," Jondaryn cattle farmer Lloyd Janetzki said.

Most of the Western Downs has been drought declared since 2014, and alongside many others, Mr Janetzki has been prematurely offloading stock.

As breeding herds are sold off, the reality of the years to come is becoming clearer.

"It takes nine months to breed a calf, to get a calf on the ground, and for that calf to be a saleable item, you're looking at 18 months," Mr Bird said.

"So you know, straight away you've got 18 months to two years before you get back to production."

National herd back to 1990s levels

The drought has seen the national herd drop to around 25 million head, a level not seen since the 1990s.

"The national herd's in contraction, and we're expecting the national herd to drop 5 to 6 per cent this year, on top of another 5 to 6 per cent last year," MLA analyst Scott Tolmie said.

"So all up, over the last two years of this devastating drought there's been about a 10 per cent drop in the national herd."

In 65 years of farming on his property Spring Glen, Mr Cosgrove has never seen his place like this.

"We've had dry years before, but this is the worst I've seen," he said.

Getting $2 to $3 a kilo for their cows, the recent sale puts money in the Cosgroves' bank and reduces the herd, but they will still be hand-feeding daily.

"Everybody's really doing it tough. It's not only the farmers doing it tough, it's the businesses in the town, they're all doing it very tough," Mr Cosgrove said.

"I honestly don't know, if we don't get rain until March or April, it's going to be a real mess."

Beef prices expected to rise

The effects of the drought will be felt down the supply chain.

"Cattle prices don't always directly lead to retail price increases, but over time these things are pretty strongly related," Mr Tolmie said.

The impact of the dry on the cattle market is being watched closely by local butchers.

"It obviously makes the procurement of beef, lamb and other meat products harder to source," Toowoomba butcher John Yeo said.

"With no rain for such a long period of time, we're in sort of uncharted territory."

While the price of beef has not spiked, it has been increasing, and that looks set to continue.

"I'd say for the foreseeable future, probably the year after, there'll certainly be increases in the price of beef. Hopefully it's not going to go where it becomes a luxury service," Mr Yeo said.

"There'll probably be, it's hard to say, maybe a 20 per cent increase in the next 12 months for the price of beef."

"It could go up even higher the year after, then again, it all hinges on the drought."

Mr Cosgrove said that when it rained, Spring Glen was God's country.

"If we can keep these cattle alive, at least we'll have something to start with when the drought breaks," he said.


© ABC 2020

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