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Farm budgets and costs

Recent beef production and management system trends in NSW

Released/reviewed: Jan 2006

Beef production occurs in all agricultural areas of NSW. The type of production varies markedly. Climate, soil fertility and the level of pasture improvement largely determine the range of enterprises possible in certain areas of the state.

Below are brief descriptions of beef production trends in the following regions:


  • North Coast
  • Northern Tablelands
  • North West Slopes
  • North West Plains
  • Hunter Valley
  • Central Slopes and Plains
  • Central Tablelands and Slopes
  • Central Western Plains
  • South West Slopes
  • Riverina — MIA
  • Western Riverina
  • South Coast
  • Monaro

North Coast

Major population centres include:

  • Casino
  • Grafton
  • Kempsey
  • Taree.

The North Coast beef cattle industry (850 000 head) is spread over the entire region and is based largely on running breeding herds. Most herds still produce store weaners, with the rest selling vealers and growing out and/or finishing steers.

Most store weaner producing herds are run on native, lower-quality pasture areas, and calves are sold in store condition at 5–7 months of age at low liveweights (165–180 kg).

The weaner-producing herds grazed on improved pasture areas based on the better soil types turn off calves at 7–9 months of age weighing, on average, 200–260 kg. Store weaners move to more favourable grazing areas for growing out and finishing as prime cattle.

There has been a steady increase in the number of stock, traditionally sold in the store market, being grown to higher market weights (e.g. as feedlot steers for both domestic and export feedlots) and sold in higher-value markets. This has been in response to the poor returns from selling weaner age animals.

The number of calves marketed as ‘light veal’ (i.e. less than 100 kg HSCW) has increased significantly in the last 5 years. The Northern Cooperative Meat Company, Casino, processes in excess of 120 000 head of veal calves per year. Heavy (butcher) vealer production is confined to properties on higher-fertility soils, generally with improved pastures. Calves are sold in prime slaughter condition, straight from their mothers, at 6–10 months of age.

Most breeding herds calve in late winter–spring, and the progeny are turned off in autumn. This management program matches the seasonal availability of paddock feed, as most North Coast pastures grow vigorously during the wetter, warmer months.

Major store cattle sales are held throughout the coastal area in autumn to market the annual turn-off, with buyers attending from all areas of eastern Australia.

Returns for cattle breeders are highly variable because the demand for store cattle depends on seasonal conditions in the growing-out and finishing areas.

There has been a steady decline in the prices received (after adjustment for CPI) for both light veal and store weaner calves over the last 10 years. This has made many coastal beef-breeding enterprises unprofitable.

With the relatively small herds common in the region, average gross farm income is low — 60% of herds have less than 100 head, but all of these herds constitute only 20% of beef cattle numbers.

Beef producers need to boost the sale weights of their turn-off to increase their gross returns and profits.

Northern Tablelands

Major population centres include:

  • Armidale
  • Walcha
  • Glen Innes
  • Tenterfield.

The area is serviced by the biggest concentration of abattoirs and feedlots in NSW. Large feedlots and abattoirs in southern Queensland and northern NSW provide a range of market options.

The Northern Tablelands is both a breeding and a fattening district, where most properties run mixed cattle and sheep enterprises. Cattle enterprises have increased in importance over recent years because of low wool prices.

The tablelands have traditionally been a strong store weaner breeding area, with 40 000 to 50 000 spring-drop weaners sold in autumn. Some of these calves are fattened locally but most are trucked to the North West Plains, Queensland, southern NSW or Victoria for fattening.

The impact of the feedlot industry and a run of poor weaner sales have produced changes to these practices. More weaners are being retained and grown out to become feeder steers. This increases enterprise incomes and allows a swing to cattle as sheep numbers are reduced. Commercial growing out of weaners has also increased, with individual properties buying weaners to grow out as feeder steers or contract growing cattle owned by the feedlots. It is anticipated that this trend will continue.

While fattening of steers for the heavy supermarket trade, the EU, and even for the grass-fed Japanese bullock market continues, the feedlot growth in northern NSW and southern Queensland has meant that many fatteners are now becoming growers supplying feeder steers instead of slaughter cattle.

North West Slopes

Major population centres include:

  • Tamworth
  • Gunnedah
  • Inverell.

On the slopes, cattle have become an important part of the enterprise mix, along with grain, prime lambs and wool production. Many specialist beef properties exist, turning off 15–30-month-old prime steers.

Enterprises are run on native pastures, lucerne-based pastures or forage crops. Higher-rainfall and higher-altitude areas are often well developed, with sub clover and temperate pastures used both for breeding cows and for fattening activities. These areas experience some difficulty in producing prime yearlings.

Less developed properties or heavily stocked properties tend to turn off store weaners or feeder cattle.

With good management, late winter / spring calving, reasonable seasons and some fertiliser inputs, slopes cattle can be relied on to produce ideal hotel and restaurant trade carcases, top weight bracket EU steers and heifers, and even supergrass steers (over 300 kg dressed weight and 0–4 tooth), when price and season dictates.

Attention to breeding or fattening good, average-quality, medium-weight steers would appear to give best rewards in this area. In addition, there is generally a strong cow market for cull females which are heavy but not overconditioned.

Cull heifers sold as weaners slot easily into the feedlot yearling trade, while 2-year-old steers in good store condition are being sought by the feedlot industry.

North West Plains

Major population centres include:

  • Moree
  • Narrabri
  • Walgett.

Irregularity is a feature of the north-west environment. Droughts are commonplace, and flooding along the major rivers and watercourses can occur from time to time.

Highly fertile black soils mean producers have the capacity in good seasons to buy in additional cattle to fatten or grow out. Summer crop stubbles and residues can also be used with bought stock. An excellent time-proven drought strategy is to ‘sell and sell early’ in dry times and buy in stock to finish in good seasons.

The severity of drought events has convinced beef producers in this area of the value of fodder conservation to stabilise beef enterprises and reduce pressure on forced sales. The most commonly used systems are contract square-baled silage, stored grain, and round-bale crop stubbles.

In the past, trading cattle enterprises were geared to older steers and some yearlings, fattened in 3–5 months off winter crops and winter herbages. Now, with the close proximity to major volume feedlots in the north-west and in southern Queensland, most people with an eye to the market have moved to ‘backgrounding’ (i.e. growing out) grower cattle for the 400–500 kg feeder steer requirement, again backed up with silage or grain feeders in the paddock. Trading cattle are mostly purchased from the Goondiwindi, Roma and New England areas, although CALM selling has enabled buyers to purchase lines from further afield.

A combination of breeding and trading is the most typical enterprise in the north-west. The target market is equally split between:

  • domestic supermarket/restaurant type cattle — provided by high yield performance and crossbred cattle of adequate quality; and  
  • B3 Japanese feeder steers — provided by purebreds which carry marbling genetics.

Large feedlot finishing is now a part of the permanent production system locally, and many cattle move out of the area for long feeding programs. Opportunity feedlotting has declined significantly over the last few years, as business stability depends on integration with end markets, volume throughput and year-round consistency. Forward contracts and custom feeding are generally more available from the large-scale feedlots. There is a trend by producers to retain ownership to the point of slaughter when cash flow and feeding margins allow.

With a large irrigated cotton-growing industry in the area, it is important for beef producers to watch out for beef residue problems and to have their own quality assurance programs in place.

Hunter Valley

Major population centres include:

  • in the Upper Hunter — Scone, Muswellbrook, Merriwa, Murrurundi;  
  • in the Lower Hunter — Singleton, Maitland, Dungog, Gloucester.

The Hunter Valley has a large number of production systems due to its diverse topography and variations in both rainfall and soil type. The Valley experiences large rainfall disparities, with coastal averages of approximately 1100 mm per annum, decreasing to levels of 500 mm in the Upper Hunter.

This diversity means that beef production systems in the Hunter are also quite varied. At one end of the spectrum, there are large-scale breeding operations for the production of store cattle, through to smaller properties focused on finished cattle production, based on irrigated alluvial river and creek flats.

The closure of an export abattoir at Aberdeen in the late 1990s had significant effects on the livestock sale methods used by many producers in the Valley. Saleyard throughput has increased at many of the saleyards, the result of direct sale opportunities including greater journeys. These distances not only increase transport costs but also are less desirable because of the dramatic effects that these journeys can have on the meat quality of livestock. Many producers are unable to completely fill livestock transports unless working within marketing groups.

Woy Woy, Kurri and Scone abattoirs cater for the local trade markets of Newcastle and Sydney. They have a positive impact on the production of vealers and yearling steers and heifers, but at a lesser price per kilogram.

Export licensed plants at Tamworth (Cargil); Ipswich, Queensland (AMH); Singleton (Throsby); Wingham (Nippon); and Scone (Primo Australia) continue to source large percentages of their livestock requirements from the area. Generally these cattle are heavier than 240 kg carcase weight. The exceptions are Tamworth, which kills the lighter-weight export cattle for Cargil and supermarket cattle for Woolworths, and Primo Australia at Scone, which kills mainly domestic-weight cattle, with small numbers of stock for the smallgoods sector.

Breeding and growing steers specifically for the feedlot demand is still in its infancy in this area, but growing demand and resultant growing returns for this type of enterprise sees this as a future growth area in cattle production.

Grass-fed 6-tooth Japanese bullocks are still a feature of the area, both bred and fattened locally and also purchased elsewhere and fattened in the Hunter. Full-mouth bullocks are produced by a small number of producers.

Central Slopes and Plains

Major population centres include:

  • Cowra (also Central Tablelands and Slopes)
  • Condobolin
  • Parkes
  • Forbes
  • Young
  • West Wyalong.

On the Central Slopes and Plains, cattle are an important part of many mixed-farming enterprises. Cattle are often integrated with grain, prime lamb and wool enterprises, with the enterprise mix tending to fluctuate considerably, according to the relative financial performance of each.

Breeding herds are run on improved pastures of sub clovers, lucerne, ryegrass and native annuals. There is a trend to increase the area sown down to perennial pastures in some of the higher-rainfall areas, while in the cropping areas, legume-based pastures often form part of the cropping rotation.

The production of heavy yearling steers is the main beef enterprise in the area. Many of these cattle are produced off improved pastures, often with a grain supplement during the dry summer and autumn.

The area is also an important feedlot region. There are a large number of small to medium-sized feedlots in the area that produce grain-fed yearling steers for the domestic (mainly supermarket) and export markets. Heavy cattle are mainly fed under contract to a processor; however, large numbers of grain-fed cattle do pass through the Forbes saleyards.

The feedlots have a strong demand for feeder cattle. British breed steers, 360–420 kg liveweight, which were traditionally sold into the domestic trade, are increasingly being purchased as feeders for the feedlots. This has created a shortage of suitable cattle for the domestic market and has seen an increase in yearling heifer prices as they fill this void.

Considerable numbers of crossbred cattle are also produced in this area, especially European/British breed crosses. Both the steers and heifers from these crosses are keenly sought after by local feedlots for the short-fed domestic market, while the heavy cull cows also receive good competition from processors in the market.

Good returns can be made in this area from attention to breeding and growing good-quality versatile cattle for either the domestic market (young cattle off their mothers, or grain-fed yearlings) or the export trade, as feeder or finished steers (grass or grain-fed).

Central Tablelands and Slopes

The Central Tablelands and Slopes are taken to include the following Tablelands and Slopes shires:

  • Orange
  • Cabonne
  • Blayney
  • Rylstone
  • Evans
  • Lithgow
  • Oberon
  • Cowra
  • Weddin.

Major urban centres are:

  • Bathurst
  • Orange
  • Lithgow
  • Oberon
  • Mudgee
  • Cowra (also Central Slopes and Plains).

Major saleyards are located at Bathurst, Blayney, Cowra, Orange and Mudgee. A regional saleyard to replace Blayney and Orange is currently being planned.

Abattoirs are currently operating at Cowra and Mudgee.

Topography of the region ranges from slightly undulating to rough and very steep country. The highest peak is Mount Canobolas at 1385 m. Rainfall varies from around 500 mm to 900 mm, with no seasonal dominance. Heavy frosts and snow occur during the winter months on higher country.

Soil types are principally derived from shales and basalt rock formation, with some areas of extensive limestone outcrops, as well as areas of granite and sandstone based soils occurring particularly in the east.

Beef production over most of the area is secondary to other primary production, which includes wool and lamb production and increasing areas of horticultural production. Most beef cattle herds are relatively small.

Breeding and finishing is generally confined to the domestic market and lighter end of the export market. Backgrounding of feeder steers is growing in popularity, particularly with the larger producers. Most cattle are finished on grass with or without supplementary feeding, and little feedlotting is conducted in the region. Breeds are predominantly British, British cross and European cross, with few Bos indicus types found in the area.

Central Western Plains

Major population centres include:

  • Trangie
  • Warren
  • Coonamble.

Cattle production in this district tends towards conservatively stocked breeding herds, with stores purchased and fattened as seasons allow. Most stock are grazed on native annual pastures, with heavy reliance on lucerne and winter forages for fattening.

Very few properties run cattle exclusively, with sheep and some winter cereals also being incorporated. The eastern sector of the region has generally aimed at the supermarket and grass-fed yearling weights, with heavier export steers produced in less favourable seasons. A few specialist heavy steer fatteners rely on a good autumn break. Recent trends show more emphasis on producing 200–260 kg carcases for the supermarket trade. Direct selling has also increased.

South West Slopes

Major population centres include:

  • Wagga Wagga
  • Albury
  • Holbrook
  • Gundagai
  • Cootamundra
  • Tumut.

Breeding cattle for the domestic trade, mainly for supermarkets, is an important part of the area’s production.

There is a strong market for feeder steers, both for the domestic grain-fed market, and the longer feeding programs of the Japanese market. There are some large feedlots in this district supplying both markets.

Most breeding herds are based on British breeds, and there are some well-designed herds crossing these to European breeds.

This is a strong seedstock breeding area which supplies genetics to all parts of Australia. Current local trends have seen an increase in the number of Angus breeders at the expense of other British breeds and European breeds, a move towards supplying heavier carcase weight markets, an increased number of spring calving herds, greater use of objectively described genetics, and more emphasis on on-farm quality assurance.

The district is well suited to supplying cattle to the high eating-quality domestic market.

Riverina — MIA

Major population centres include:

  • Leeton
  • Griffith (also Western Riverina)
  • Deniliquin (also Western Riverina)
  • Hay (also Western Riverina)
  • Jerilderie
  • Finley
  • Berrigan

The larger selling centres include Griffith and Finley.

Irrigation and dryland production has been heavily influenced by the growth in new and proposed feedlots. Irrigated areas do not have large cattle enterprises because of the damage done to soils and irrigation structures.

Backgrounding and grower cattle enterprises are increasing in activity.

The main change, apart from an increase in numbers, has been the type of cattle purchased by producers.

Demonstrations and innovative feeder steer competitions at the local level have led to a more appropriate purchase of breeding stock and weaners targeted to feedlot specifications.

Western Riverina

Major population centres include:

  • Griffith (also Riverina — MIA)
  • Hay (also Riverina — MIA)
  • Deniliquin (also Riverina — MIA)
  • Dareton.

The current improved outlook for beef and the increase in feedlot capacity within the Riverina has seen an increase in interest in beef production in this region. Cattle are becoming a more important part of a mixed enterprise, which includes grain production, prime lambs and wool production. There is also an increasing number of specialist beef properties emerging but these enterprises are largely determined by the land use capability of the property and by seasonal conditions.

Properties in the region can be broadly classified into the following groups:

  • intensive irrigation
  • irrigation plus dryland
  • dryland with adjoining river country
  • extensive dryland.

More beef producers are breeding and growing out yearling cattle (14–20 months) to a finished weight, or targeting feedlot entry weights of 400–450 kg.

Also, an increasing proportion of properties are turning over stock via backgrounding (growing out) for feedlots or, given favourable seasons, in a pasture-finishing operation. Most finishing operations also rely on the use of local grain and fodder to supplement stock through seasonal variations.

Very few producers now sell cattle as weaners, given the increased returns from targeting feedlot entry weights. Only adverse seasonal conditions would change this.

Female progeny not used for breeding purposes are often targeted at the local butcher trade or the Korean market.

Farm feedlots have become more common over recent years, but the initial capital cost of setting up this enterprise must be kept in perspective.

The ability to breed cattle which offer flexibility to meet a range of markets is most desirable in this region.

South Coast

Major population centres include:

  • Wollongong
  • Nowra
  • Bega.

Rainfall averages from 1100 mm down to 800 mm, and average monthly rainfall shows slight predominance in the first 6 months of the year.

The South Coast is characterised by better-quality soils and pastures than most north coastal areas, and so beef producers have the capacity to turn off heavier, well-finished calves. Beef pastures are mostly:

  • supered native grasses plus clovers; or  
  • sown phalaris or ryegrass and clover pastures with kikuyu and paspalum providing some summer growth.

Cattle breeds comprise about 40% straight-bred British breed cattle, about 30% dairy–beef crosses, and the remainder beef–beef crosses. The number of Angus and Angus cross cattle has increased steadily in recent years. The quality of calves sold at the store sales has also significantly improved during this period.

Most calving is in the July–August period. The traditional production system has been vealers for the domestic market with steer vealers weighing 290–350 kg and heifers 270–320 kg at 9–10 months of age.

A greater diversity of market opportunities has resulted from an increasing feedlot capacity in southern NSW and the growth in competition for store cattle. There has been a major trend this decade to grain finishing weaner and yearling cattle for the domestic market and a more recent trend to selling larger numbers of well-grown weaners and yearling steers for both grass and grain finishing.

A growing number of Angus and Murray Grey breeders are selling their heifers as vealers and growing out the steers as yearlings to supply the long-fed feedlot market for Japan.

Local producers no longer feel ‘locked in’ to vealer or store weaner production but are looking to maximise returns by managing turn-off to meet the changing market situation.

Monaro

The main population centres include:

  • Cooma (major centre)
  • Jindabyne
  • Bombala
  • Adaminaby
  • Delegate.

The location of the Monaro in the lee of the Snowy Mountains creates a rainshadow effect, and rainfall is therefore low and irregular. Rainfall averages from 500 mm to 800 mm, with a slight summer predominance. Drought conditions have been experienced over most of this decade, and consequently stock numbers have been markedly reduced.

Medium-fertility granite soils comprise over half of all soil types on the Monaro followed by the more fertile basalt soils. The ratio of native to improved pastures is approximately 1.5:1. These features, often combined with extreme climatic conditions, have resulted in a region orientated towards the breeding and selling of store cattle.

Cattle breeds consist mostly of straight-bred British breed cattle — the Monaro supports the largest concentration of Angus cattle in Australia. Of the 935 producers, 70% run cattle as a sideline enterprise to sheep, and only 10% run cattle only. Most calving is in the July–August period.

Special store cattle sales, held each month at the Cooma Saleyards, remain the most common method of selling store cattle. The weaner sales in April/May are also one of the key outlets for store cattle, and attract buyers from all over Australia. A number of quality heifers are sold at special female breeder sales in May.

The majority of store cattle are either grass-fattened on the Southern and Central Slopes, Riverina or Gippsland, depending on adequate seasonal conditions or finished in feedlots for both domestic and export markets.

Author: Lloyd Davies
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