Hereford producers are in a prime position to capitalise on current market premiums in certified grass-fed markets.
Processors are paying up to a dollar per kilo more for certified grass-fed cattle that meet the specifications of certain products and brands.
Herefords’ renowned doing-ability on grass and the seasonal turnaround across much of Australia offers a fantastic opportunity for producers to take advantage of these premium markets.
The contract grid released by JBS Australia at the beginning of May had prices hitting $7.00 per kilo in August for cattle eligible for the company’s Great Southern farm-assured certified grass-fed program.
Australian owned H.W Greenham & Sons has introduced Winter Base Price Agreements for cattle farmers supplying their Gippsland facility.
The Greenham Gippsland Winter Base Price Agreement was first presented to farmers in February this year and also offers $7.00 per kilo for cattle killed in August 2020.
Heightened demand for quality grass-fed cattle is purely supply based according to JBS Australia’s Southern Livestock Manager, Steve Chapman.
“The grass-fed cattle that are available of the right weight, style and finish are limited, there will be a lot more available in Spring, but less available until then,” Mr Chapman said.
The JBS Hereford Boss brand (a sub-brand of Great Southern) is also facing supply shortages.
“On weight we’ve had some very good Hereford cattle killed under Hereford Boss, but we’ve been challenged by numbers,” Mr Chapman said.
This is largely due to the Autumn break that is enabling producers to hold onto cattle for longer to make use of the abundance of feed and reach heavier weights.
While consumer demand for premium products is currently quite unpredictable, Mr Chapman says JBS is committed to sticking by their brands and will continue to purchase cattle.
“Demand is quite volatile at the moment; we are having more trouble shifting premium cuts due to closures of ‘white tablecloth’ restaurants.
“I’ve never seen [this situation] before in my life,” Mr Chapman said.
Despite the volatile market, processors’ commitment to their products and clients offers a good opportunity for producers to capitalise on high market prices.
While restaurant demand has dropped steeply, consumer demand for products deemed healthier or ‘cleaner’ has spiked amid COVID-19 concerns.
Grass-fed products have been growing in popularity in Australian domestic supermarkets, where overall beef demand has increased during COVID-19.
High demand for cattle has also seen prices driven upwards in the restocker and backgrounder markets with a line of 22 unmated Poll Hereford cows & calves from Mansfield, Victoria selling for the second top price of $3,020 on AuctionsPlus last week.
The 3-year-old cows weighed 579kgs and have 3-10 week old calves at foot weighing 103kgs.
A line of 48 Hereford steers offered by J & S Moreing in Bombala, NSW made the top heavy steer price on AuctionsPlus in the same week, selling for 393 cents per kilo.
The steers are 17-20 months old, weigh 420kgs and will cross the border to Baranawartha North in Victoria.
To round out a strong week for Herefords on AuctionsPlus, Woomargama Station sold 178 August/September 2019 drop Hereford steers averaging 239kg for $1252 or 524 cents per kilo on Friday May 1.
Further opportunities for Hereford producers lie in the current live heifer export orders, which are paying producers up to $1300 (plus GST) per head for Hereford heifers between 200 and 400 kilograms, aged between eight and 16 months.
According to Scott Altschwager of Elders the live export order is a good opportunity for Hereford breeders if they have marketable cattle available.
Similar to the grass-fed market, the export premium is also being driven by high demand for similar cattle as producers choose to retain more of their heifers as future breeders following the seasonal turn around.
“It’s pretty exciting at the moment for the Hereford breeder,” Mr. Altschwager said.
The 55th Annual Herefords Australia National Show and Sale (Wodonga) will be held next week with the sale taking place on AuctionsPlus on Thursday May 14 and online judging results being released from Friday May 8.