Alternative markets explored at NT field day

Marketing options for beef producers in the Northern Territory was the focus of the Hayfield Station Field Day held between Dunmarra and Elliott last week.

Understandably, given the current market pressures faced by northern beef producers with the current constrictions in live trade into Indonesia, the theme of the field day drew considerable interest, with producers in attendancefrom across a wide area of the NT.

The event was organised by the NT Department of Primary Industry and Fisheries.

Dr Steve Petty

The first speaker, Dr Steve Petty, provided some thoughts on the principles of profitable marketing in the current climate.

Dr Petty, director of Northern Development Company, said as most of the cost of a steer was the cost of producing a weaner, in order to maximise returns, producers should lift their average sale weight to be as near as possible to the 350kg maximum accepted by the Indonesian live export market.

Currently the average sale weight of feeder steers out of Darwin was around 280kg, he said.

Some of the strategies he highlighted included agistment on properties with wet season access, differential supplementation strategies, and careful drafting and weighing to optimise the timing of sales.

Dr Petty said most NT properties would need to aim for a minimum sale price of $600 for a feeder steer in order to make a reasonable profit on that animal. Two following speakers, Troy Setter and Val Dyer, agreed with this rule-of-thumb.

Dr Petty also highlighted that live exporting to Indonesia was not the northern beef industry’s only market option, suggesting that producers should consider exporting to other countries such as Egypt or the Philippines, and evaluating backgrounding and lotfeeding options in Queensland.

In the latter case, he suggested that businesses consider retained-ownership of animals until point of slaughter, in order to maximise returns.

Mort & Co’s Ben Maher

Ben Maher, private client manager with Mort & Co, a large southern Queensland feedlot operator, described the company’s ability to provide another marketing option to northern producers via retained ownership of cattle on feed. Mort & Co provides custom feeding services and could then market the finished cattle into appropriate forward contracts on the producer’s behalf.

When considering alternative marketing options, it was important that producers did their own sums and took into consideration transportation costs and the genetic potential of their cattle.

For producers whose turnoff suited the Mort & Co model, increased turnover and additional margins could be achieved as well as a different outlet for their cattle, he said.

AACo’s Troy Setter

Australian Agricultural Co’s chief operating officer, Troy Setter, delivered a positive and revealing presentation about the marketing options AA Co had explored over the past 12 months.

He explained that while the company required regular planned income from sales, it also needed to be flexible and adaptable to market changes and currency fluctuations.

He detailed the extensive enterprises and businesses which make up AA Co’s supply chain, including using a number of different breeds in their composite breeding systems, live export, lotfeeding and branded boxed beef. He said it was all about managing risk, managing margins and making sure all of AA Co’s eggs were not in one basket.

One of the biggest drivers to improved productivity and profitability in the AA Co business had come from the development of AA Co’s composite cattle.

He presented a positive view on the future for the northern beef industry, citing the projected population increases in south-east Asian neighbour countries, making the industry well-positioned to continue to supply these markets.

He acknowledged, however, that the next few years were likely to be tough for northern producers heavily exposed to Indonesian live export.

Final field day speaker, Val Dyer from Hayfield Station, provided an insight into the workings of her family’s cattle business.  Hayfield carries 15,000 to 20,000 head of cattle on 2750sq km of country, with a further 2000sq km of undeveloped country.

The Dyers have grown the business sustainably and conservatively through mostly self-funded development since purchasing the property in 1974.

Their current major goal is planning for succession.  They run a high grade Brahman herd and believe that supplying a consistent line of high quality cattle and ensuring good delivery outcomes are essential.

The Dyers’ current target markets are Egypt and domestic breeder sales. While Hayfield also supplies the Indonesian feeder steer and heifer market, they retain some steers under 320kg for an additional season to suit the heavier markets such as Egypt, the Philippines and Brunei.

Other selling strategies employed at Hayfield include breeder heifers sold locally and to south-east Asia, PTIC cows, PTE cows, cow-and-calf sales, and ox and bulls sold to southern processors.

Overall, the feedback from the Hayfield Station Field Day was very positive, with many of the participants requesting more information about the subject matter.

A follow-up webinar will be held focusing on HGPs on Thursday, November 8, for those who were unable to attend the day, and who would like more information.