Dairy heifers for China
DAIRY cattle sales, both domestic and export, remain strong but the industry has been warned that the good price-run for export cattle to China may not last.
Dairy heifer prices have significantly increased in the past two years as a result of strong demand from China, as well as Pakistan and Russia.
Elders general manager of meat and livestock trade Hamish Browning said though global demand for dairy heifers remained firm, current pricing could not continue if markets such as China cut back orders.
"The common feedback from our customers in China is that pricing has gone over the top and they are unable to make money with the price they are paying for dairy heifers at the moment," he said.
Elders is currently paying about $1200 for 8-month-old to 17mo unjoined Holstein-Friesian heifers between 200 kilograms and 400kg liveweight.
Previously it had been as high as $1500-$1600 for 'China-ready' cattle.
Mr Browning said some correction in price would be needed, which would hopefully not be too dramatic for producers.
"We'll see a correction of up to $200 a head but it comes down to whether other exporters respond to the feedback from overseas and whether we can go back and buy cattle after we write contracts with our customers," he said.
"I, for one, want to make sure we still see a strong return for dairy producers for the effort they put in and the quality product they produce.
"However, a correction is needed for the confidence of our customers in China."
While prices for the export job look shaky, interstate demand has been strong, particularly in Victoria and New South Wales.
Mr Browning said that in the 12 months leading up to March, export sales dropped by 6 per cent as more cattle were being sold domestically.
Dairy Livestock Services agent Brian Haebich said he had seen a lot of demand from interstate, particularly from places such as Moxey Farms in Forbes, NSW, where he had five B-double loads of cattle due to go over within the next week.
Source: farmonline.com.au