I am back up on 4 Clover Ranch near Rocky Mountain House, Alta., having arrived a week ago and getting our custom grazing operation going with cow-calf pairs trucked in as this is written.
Meanwhile back at our Alcheringa Pastoral (Australia), Helen happily reported that our steer sale in late May had gone well. We opted for the special “store cattle sale” held at the Hamilton Livestock Exchange in southwest Victoria, which had brought in about 2,600 head for the sale.
We bought the steers through our livestock agent in September 2015 and couldn’t have bought at a higher price. We hit a price spike just perfectly and as the feeder market subsequently softened and fat cattle dropped across North America we were, needless to say, on edge with how we might do on the steers down the road.
The reason why cattle prices fluctuate is always hard to pinpoint but the drop in feeder cattle was primarily due to the effects of El Niño. Winter precipitation is crucial for all Australian graziers as the summers typically yield very little rain and growth in the pastures. The spring and summer of 2015-16 were the driest since 2009. Meteorologists claim the next driest was back in the 1940s, when there was marked destocking across the country with early-weaned calves and cull cows heading to town.
As well, the Australian dollar climbed to the high 70s reducing the competiveness of Australian beef going into the softening market of North America.
Making the best of it
We had purchased the steers and had to make the best of it as we began grazing across the paddocks. The extremely dry winter and spring caused the grasses to head prematurely and while the feed value of the stressed grasses might have been above normal due to the lack of rain, it was clear that supplementing the dry standing feed needed consideration. This was done using urea/molasses blocks with 30 per cent protein improving rumen function on the fibrous feed.
As we neared the end of summer in late March with cooler days and less evaporation, more frequent showers gave the pastures a lift. I have mentioned before that grazing during the hot Australian summer has been a steep learning curve for us but we are picking up on a few strategies.
Most pasture species go dormant and have much-reduced palatability during summer such as the ryegrasses and the popular phalaris (similar to reed canary grass). They are tremendous winter and spring performers, but once headed it is hard to get the cattle to eat them. For that reason we added Venus alfalfa and Choice chicory in our forage mix when the pastures were seeded down. These varieties are more summer active and can add significantly to the feed value of the overall stand. Similarly we selected the orchardgrass variety Savvy and perennial ryegrass One50 for the improved summer and autumn growth relative to other varieties.
The choices helped the cattle performance immensely on the second rotation from March onward.
Then the rains came
As autumn approached, rain fell across many parts of Australia from far northern Queensland all the way down through New South Wales into Victoria. Farmers were rejoicing the announcement that El Niño was a thing of the past and that in fact it would be followed by a weak La Niña.
The remote outback cattle country where Queensland, New South Wales and South Australia join up received record rainfalls. With very little cattle on hand, the cattle station began restocking. On outback trips of the past we have witnessed firsthand the explosive growth the dry, red centre of Australia can produce when it rains. The big cattle stations are very responsive when this happens and will travel great distances to buy cattle.
The restocking is often done regardless of outside factors such as the softening beef market of North America and reduced export to China. Beef production is their game and a barren cattle station is not an option. Historically the price of Australian finished cattle has always been tied to the North American market. While it was slow to catch up with the processors rubbing their hands and taking full advantage of this during the last two to years, we are finally nearing the historic 80 per cent level of the U.S. price.
We sold our 900-lb. steers for $1.48/lb. and made roughly $400 on each. Despite the nervous beginning it was a good outcome. Helen will soon arrive here on 4 Clover Ranch for the Canadian summer. Our livestock agent back in Australia will be on the lookout for steers for us come September and the drama will begin again.
Kim Juul Nielsen provides an Australian perspective from time to time. Kim and Helen grow grass during the Australian summer at Alcheringa Pastoral in the South West of the state of Victoria, Australia and during the Canadian summer up on 4-Clover Ranch, Rocky Mountain House, Alberta. He can be reached at [email protected]
This article first appeared in the July 19, 2016 issue of Grainews