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Bull Farmers could face 200,000 calf shortfall

Bull Farmers could face 200,000 calf shortfall

Richmond Ltd is urging bull beef farmers to act now and signal stronger demand for 12-week-old calves or the industry could be left short later in the season.

Richmond is confident there is still a good return in calf rearing despite prices in the United States nearing a 10-year low.

However, calf rearers are already indicating that there could be a drop of up to 200,000 calves raised this spring because of lack of demand from bull farmers.

Eric and Helen Pidduck, Hamilton, who run one of New Zealand’s largest calf rearing operations, say their orders to date are down by about 30 per cent on last year, and that many smaller scale rearers in their district will not be purchasing calves this year.

Livestock Manager Lloyd Fitness and Beef Marketing Manager David France said as the bobby calf season approaches, the company wanted to send a strong message to calf rearers and bull farmers that market indications are looking more positive.

“We believe it will be a good year to rear calves for all links in the chain from rearer to finisher,” they said.

History shows that when beef prices are low, there is a dramatic drop in the number of calves kept for rearing.

“We need to learn from this experience because nationally the industry could be facing a 200,000 fall in the number of calves kept for rearing this spring, leaving it well short of bulls in 18 to 24 months time,” they said.

“We strongly encourage bull farmers wanting to help mitigate the down turn to contact rearers and place orders for calves. Rearers will not raise calves without the comfort that they have a buyer”. Richmond says this year calf rearers should expect better margins, on the back of a 50 per cent drop in bobby calf prices, cheaper calf rearing costs and positive export market signals.

Based on the current bobby calf schedule, Richmond estimates it will be paying $30 to $40 for heavy bobby calves. Rearers are normally paid a premium above this of $10 to $15 for good calves, which would see good rearable calves selling for $45 to $55 compared with $80 to $140 at the same time last year.

“We consider $45 to $55 to be a fair price for good rearable calves,” Mr Fitness said.

The cost of rearing is also well down this year because of lower milk solid prices.

Dave France said positive factors point to an up side in the world lean beef markets over the next few years.

“SARS in Asia is now behind us and there have been no new cases of BSE in Canada despite exhaustive searches with trade expected to resume with the United States toward the end of this month.

“Beef herds in United States and Europe have been liquidating and are now rebuilding, along with drought in Australia all indicate less supply of beef going forward”.

“Based on this, we are confident there will be stronger demand for New Zealand bull beef this season and the years ahead,” he said.

Richmond will be actively encouraging bull farmers to contact rearers with their calf requirements this season.

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