The dry is hitting farmers hard in parts of the country - particularly in southern New South Wales, South Australia and Victoria. Records are set to be broken again today in the New South Wales Riverina - as a lack of feed and water forces farmers to sell off thousands of cattle. Stock agent Isaac Hill says prolonged drought conditions going into winter are driving farmers into consolidating their herds.
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00:00Whatever rain we get from here on in, it restricts growth, or growth is certainly slowed.
00:09So what we're faced with at the moment is going into a winter with little or no water
00:13and little or no fodder, and at the same time having trouble sourcing either grain or hay
00:21at equitable leaven.
00:23We can see the cattle yards there behind you, Isaac.
00:27A record number, I believe, of cattle and sheep are being expected to sell today.
00:33Farmers are essentially being forced to sell off their livestock.
00:37Is that the situation?
00:38So there's a combination of that.
00:41There's probably few that are forced to sell off, but nearly everybody is certainly in
00:48a position where they have to consolidate back to their core herd as quickly as possible.
00:54They just physically can't carry the amount of livestock through the winter that they would
00:58like to.
00:59So any surplus stock, any young stock that they may have chosen that would typically be sold
01:05in the spring are now being sold now in the idea to maintain their core herd.
01:11And this is primarily because of the issues with fodder not being able to get enough and
01:16water?
01:17Correct.
01:18Yes.
01:19Been very dry.
01:20South Australia has recorded a record dry.
01:22Victoria is very dry.
01:23And southern New South Wales is as dry as we have seen it for a large number of years,
01:27to be perfectly honest.
01:28Well, you've been in the business for over three decades.
01:31You've seen droughts before.
01:32Have you ever seen it this bad?
01:34I've certainly seen droughts worse than this, but we haven't seen a pinch.
01:42We all seem to have December rain and we got a false sense of security that everything was
01:47going to be okay.
01:48So no decisions were made there.
01:50And then all of a sudden it's got through to the public holiday period of being Easter and
01:55Anzac Day, which has then concerted these larger numbers because decisions seriously
02:02have to be made right now.
02:04What sort of decisions are they having to make?
02:07So they have to turn around and figure out at what price, what their sell point is and
02:15what is the real cost of maintaining the cattle that they choose to hold.
02:20Now on a daily basis, the hay, if you can source it, is going up per tonne almost daily.
02:27And so therefore, if you haven't got a shed full of hay, then you probably have to sell
02:32cattle and sheep.
02:34And so what sort of prices are they looking at?
02:39This week, canola hay is in and around $350 a tonne, cereal hay is $450 a tonne and
02:47loose and hay might be as high as $550 a tonne.
02:50And that's on the back of it probably late last year being half that.
02:53Right.
02:54Okay.
02:55So up 50%.
02:56What about the prices that they're getting for their cattle from a historic perspective?
03:00Are they selling at bargain basement prices or are they getting some good numbers for their
03:05sheep and cattle?
03:07No, we're quite happy with how dry it is to the cash fly that is being created.
03:13That is because the northern half of New South Wales and almost the entire part of Queensland
03:19are experiencing one of the best seasons they've had.
03:23And so that's creating a direction that all of our young cattle can go.
03:30As well as that, it's a funny thing to say that as it gets drier, the heavy cattle and
03:35the well-finished cattle become less prevalent and so therefore they're very much price competitive
03:43because there's less of them.
03:44Okay.
03:45So there is an outlet that we haven't normally seen.
03:48Normally when it's dry, then the price plunges.
03:52We are seeing it creeping back, but we're not seeing it plummeting by any stretch of the
03:55imagination.
03:56So you mentioned there, Isaac, it's somewhat of a tale of two cities up in northern New South
04:00Wales and Queensland.
04:00They're having a great time, but it's not as good with respect to the drought further
04:04south.
04:05What does it say then when you look at the nation's cattle industry in a more holistic
04:09way?
04:10What is the state of that?
04:12I would say the state of that.
04:13All economic forecasts for the cattle industry in Australia look very, very solid.
04:19So we're looking for it to peak.
04:21And these are taking into numbers like the US cow herd and all that and everything into
04:27consideration with where the world's at.
04:29We believe that the cattle market is going to be buoyant going forward.
04:32And so it's a case of haves and have-nots.
04:34If you have feed, then now's the time to buy.
04:38It's not at bargain basement prices, but it is less than what you would expect to pay
04:43if we were having any sort of a season down in the southern parts.
04:47Isaac, finally, I mean, this is, I don't know if this is necessarily in your lane, but
04:52what does this mean then for the end consumer in all of this?
04:55Yeah, it's probably not in my lane, but I would say if it's as simple as a supply and
05:02demand, there is a hell of a lot of supply that has left this region.
05:06And so at some point in time, there's going to be a greater demand, certainly in the southern
05:10parts for prime lifestyle.
05:12All right.
05:12Isaac Hills, many thanks for your time today and all the best with the sales.
05:16Thank you very much.