Nicole Wines Livestock: 2014

Australia exported 279,702 tonnes swt of beef to Japan during the recent 2013-14 fiscal year, which was down 6% from the previous year (data released by Department of Agriculture).There is very strong demand for Australian beef from the US, narrowing the gap between the first and second export destinations, but Japan’s demand for chilled products eventually sustained the volumes in the final month.

Beef exports to Japan during the month of June 2014 totalled 24,826 tonnes swt, which was down 2% from the same month in 2013, with a decline in frozen shipments (down 9% year-on-year, to 15,185 tonnes swt) being partially offset by an increase in chilled intake (11% higher at 9,641 tonnes swt)

Unlike most countries, Australia exports the majority of the red meat it produces. In 2012, 62% of the red meat produced was sent overseas (excluding goat meat and offal), valued at $6.3 billion.

Historically, Australia's red meat exports have been heavily weighted towards North Asian and North American markets. However in recent years, Australian exporters have been diversifying the mix of markets, with a stronger focus on markets in South Asia, Greater China and the Middle East.

Not only are the destinations of Australia's exports changing, but the composition is shifting too. MLA's latest Composition of Australian red meat exports Red Meat Market Report (published August 2012) highlights some of the key trends that were apparent in the August quarter of 2012.

These changes reflected the following: tighter grassfed cattle supplies following a widespread rain, which greatly impacted production, cautious buying in the United States, positive performance of the Japan fast-food sector on top of lower stocks in this market, and a continued decline in sheep meat production.

With June export statistics available, Australian beef exports to the US for the first half of 2014 passed 150,000 tonnes, the first time that this volume has been reached in this period since 2007. The 2013-14 financial year total was 265,000 tonnes, the largest financial year volume since 2008-09.

The source of this information is from the MLA (Meat& Livestock Australia) website.

An Agent's line-up of their Client's Cattle before the Sale

I went to a cattle auction and there were over 3,000 head sold. The sale facility was immaculate. Very clean, Pens had rubber floors, and a water system ran along the inside of the pens.

There was several bulls that sold, along with calves ranging from 300#er’s to 750# and yearlings along with canner cows the day I was there.

Breeds that are common that I saw were Black Angus, Angus/HerefordX, Hereford, Charolais, Murray Gray, Limmousin, Red mostly. They are muscular looking. There were some brangus also. Scottish Highlanders and belted Gallaway were seen frequently. The Holsteins are called Fresians- Not sure if they are the same or a breed of Holsteins, They look alike, but seem a bit different.

I asked one of the Auctioneers that was there, “I didn’t hear anything about natural cattle being sold?” and he replied “there wouldn’t have been any of the cattle implanted, so they were all natural” He explained that the cattle would be docked so much and the grocery stores wouldn’t buy the meat if they were implanted.

SELLER SIDE OF SELLING CATTLE IN AUSTRAILIA

Ranchers have a premise ID from the government and all cattle are RFID tagged, which will correspond back to the ranch. Ranchers do not brand their cattle, they are all ID’ed with EID tags. You would order the Alflex tags from the store and give them your premise ID number to order and this would cost you $3.50 from the store I went to.

At the Howards place they brought 15 steers/heifers to the sale barn that weighed an average of 350-450 Kilo’s or about 700#. It cost him around $900.00 to have someone come and take them to town which is about 100 miles away or took us about 1 ½ hours to get there up and down mountain roads, which are a mix of pavement and gravel. We passed through about five little gold mining towns on the way to the sale.

The cattle have to be at the sale by 9:00pm the night before the sale to be received by the Auctioneer agents.

Cattle are put into pens and not weighed until the next afternoon after the cattle are sold. That is right, the buyers are bidding on the livestock, without knowing the exact weight.

The Rancher's cattle go into one pen. It doesn’t matter if they brought three steers, one cow and four heifers. They all get checked in and will remain in that pen even when sold. They are not fed in these holding pens. If cattle are to be carried over a few days after the sale before the buyer picks them up, they go into grass Paddocks.

Expenses occurred to the rancher or seller is $10.00/ head to sell at sale barn, 4% commission charged by the Agent (Seller cannot sell to barn only through an agent) Trucking to the barn, $1.50/ head for Council (similar to our Beef Council) along with some different Levy’s and insurance expenses.

AGENTS/AUCTIONEERS

Remember, Sellers have to sell with an Agent and pay them 4% commission, they have no choice. They designate which Agent they will be selling with. I don’t believe there are any “Order Buyers” Or people who forward contract. Options for marketing look very limited compared to the US.

The sale that I was at had nine Agents, or Auctioneers that sell, at this particular barn. I'm not sure who owns the livestock barn facility, but nine groups of Auctioneers sell here. It would be similar to my company and eight others of my competition selling at the same place.

Every six months they draw straws to determine which Auctioneers will sell, and in what order, to continue on a rotation.

The Agents have to pay into the barns. They would have to wait for an agency to leave in order for a new one to buy in. These Agents pay .3% turn over fee to Sale barn and also, I believe, a membership fee.

The Roy White Emms Mooney company (EMS) has about 4-6 people, consisting of an auctioneer or two, a helper and a book keeper. The book keeper keeps track of all sales, and helpers mark sold cattle and sort them into pens.

The Auctioneer term “Shape Cattle” is a type of sorting, but they stay in the pen and just show paint marks. For instance, you will have a pen and notice there are different paint marks on the cattle. It is a requirement in some locations that prime cattle have a dentition indication mark prior to auction. This is normally done by the vendor or the stock agent.

Fat cattle auctions in New South Wales, Australia, identify the amount of teeth that prime animals have in the form of sprayed marks along the back. Thus two tooth cattle are marked on the wither, four tooth on the middle of the back and six tooth on their high bone (near their tail). Milk and eight tooth cattle are not marked.

A lot of these cattle that I watched sell were 800# just coming off grass and went to slaughter, not to a feedlot to finish. They consider the 700-900# cattle finished. They said they don’t eat big size steaks like we do in the states.

Agents and Book Keepers working the Sale.

SYSTEM OF SELLING

So you have the Mooney Auctioneer up and he has all the cattle in a row of pens that he got consigned here.

The company is on the cat walk in front of the pen with a portable microphone and speaker set up along with a bookkeeper next to them, a spotter and a guy with a paint stick. The auctioneers had pre sorted the cattle the night before with the paint marks on the hips, mid back, shoulders. So the auctioneer will start out selling all the cattle without marks, which might be alike steers of one color.

Remember, the buyers don’t know what these steers weigh until the end of the sale. The buyers are sitting on the fence bidding on only a few that I noticed, there were maybe four main buyers.

Then when they get the bid, they could say that they only want three of the six, and they will have to start the bidding over and sell the remaining three. They proceed to the next marked cattle, which may be a cow or heifers, that are marked differently.

For example, they are marked with pink paint if they went to multiple buyers, so a pen with no pink marks went to one buyer and a pen with two different marks went to three different buyers (no marks, one pink dot and two pink dots represent different buyers). If one buyer buys the whole pen, but then he/she wants two of those cattle to go to a different pen for their different orders, they are marked for the separate pens but also for that same buyer. The book keeper has to enter the prices into the computer and record who the buyer was.

Below is a video I took at the sale barn of the sale itself.

SYSTEM OF THE SALE

Cattle arrive, the auctioneer’s wand the EID tags and record them into a computer system by their EID numbers, and then the Auctioneers shape the cattle.

The board when you walk into the sale will list all the Auctioneers with the number of head they are selling that day and will have a total number.

It is pre-determined which auctioneer starts and the order they are going to sell. The book keeper has a list of Ranchers EID tags and a spot to write down what price they get.

When the pens of cattle are sold there is someone from the sale barn that walks around with a reader to read the animals that are marked different like the different buyers or the different pens that the buyer needed penned separately. Then the sale barn has people on horseback to get the animals out of the pens to weigh, such as all cattle without marks in a pen will go to the big scale while the ear tags are read prior, and the computer tells the person who the buyer was and what pen the cattle need to go in.

The cattle that are marked go into a tub and are scanned in the chute. This system is hydraulic ran by the computer or with a hand held remote to open and close the pens. They will leave the chute and the pen, and then the horses take them to a bigger pen. Paddocks are used when cattle need to stay overnight- none of the pens have feed in them.