Some move from cattle

Press, 17 September 1976, Page 14

Some move from cattle

There are likely to be as many cattle for slaughter in Canterbury in the coming season as there were last season, according to conclusions drawn by Mr A. R. Mclvor, senior lecturer in farm management at Lincoln College, from a survey that was carried out in April with the help of the meat and wool sections of Federated Farmers in North, South and Mid-Canterbury.

But because of proposed changes in farm policies, he said that fewer calves were likely to be bom this year and next year, with a consequent reduction in cattle for slaughter from 1977-78 onwards. In both the last two seasons Mr Mclvor said that the killing space for beef cattle in Canterbury freezing works had proved inadequate to accommodate the numbers offered for slaughter, particularly towards the end of each season. This situation, though largely caused by the way farmers had adjusted their cattle selling strategies in response to price changes for export beef, had been further compounded by a coincidence of weather conditions. In the survey, information was sought about sheep and cattle numbers wintered in 1974, 1975. and in the most recent winter, cattle sales in the last two seasons, numbers of cattle remaining for slaughter in April, May and June this year, winter feed policy and whether a change of policy in relation to cattle was in process and if so what change was planned. Information was obtained from 310 properties, including 175 in North Canterbury’, 70 in MidCanterbury and 65 in South Canterbury. It was apparent that on the survey farms sheep production was favoured, Mr Mclvor said, as was shown by the steady annual increase over 1974 figures. Cattle numbers, whilst reflecting the large carryover of stock in' 1975 of 19 per cent, indicated a steadying-out this year at near last year’s levels, or 20 per cent above 1974. '‘Significant!v. the numbers of in-calf cows and heifers, though lower this year than last year, are still in total 5 per cent above 1974. “There is a trend away from cows to more adult steers and dry heifers, whilst weaner calves particularly show marked in-

creases over the two years.” The increase in breeding stock was found to be in the high country and hills and plains, with a substantial decrease on cropping farms. In addition, the largest increase in weaners and adult steers was on the hills and plains, with the lesser cattle increase on cropping farms offset by a large increase in ewe hoggets. In both sheep and cattle, the survey farms in North Canterbury, with more favourable feed conditions, had retained a greater percentage of stock, including significantly a greater proportion of female stock. Mid and South Canterbury had fewer breeding cows than in 1974, though South Canterbury had retained a relatively large number of adult steers. Thirty-seven per cent of farmers in the survey had indicated that they planned to modify their existing cattle policies. Of these 29 per cent intended to reduce cattle, while a further 2.6 per cent proposed to go out of cattle together. Within farm types, the high country showed the greatest planned reduction, and mixed cropping farms the least. On a district basis, more Mid-Canterbury farms planned to reduce cattle than farmers in other districts. For 84 farmers proposing to reduce cattle numbers, Mr Mclvor said that economic factors were of greatest significance. Changing to other enterprises with greater profit, the increased cost of winter supplements and mainly hay and low profit in cows and low store cattle prices had been given by 55 of the 84 as reasons for change, and another seven listed shortage of winter feed. While this reflected seasonal conditions, Mr Mclvor said,' it indicated tire relatively high influence of feed supplies, particularly if considered along with the thought about high feed

costs, related largely to hay. There was a very strong case for modification of policy on economic grounds, he said. In looking at changes in average prices for store cattle at Addington since 1971 and the resultant trading margin for weaner and yearling steers if sold as average 20month steers slaughtered at 230 kg at the subsequent autumn export schedule chiller price. Mr Mclvor said that for the purchaser of store weaners or yearlings in 1975 and for 1976 (on the basis of the outlook), trading margins were equal to those recorded in the 1972 season. This was reflected in high gross margins. On the other hand, the return to breeders was relatively low, and was disappointing when the existing export schedule was considered. Not only was the profit per beast wintered unfavourable to breeders, but it also indicated a low rate of return to capital invested in cattle. The farm selling store weaners gained a gross margin of 21c per dollar invested in cattle, while the farm buying these weaners and finishing them by 20 months earned $1.46 per dollar invested.

Both this year and last year Canterbury farmers had experienced a prolonged delay in having cattle slaughtered and this, together with feed shortages, had a profound influence on store cattle prices.

When major delays occurred in marketing prime cattle through freezing companies, more stock were offered to the local trade and to farmers, with the result that both markets were oversupplied and prices low. The freezing industry, therefore, made an important contribution to price stability.

In his paper dated August of this year Mr Mclvor said that numbers of cattle slaughtered for export in South Island freezing works were about 71 per cent higher for cows and 72 per cent higher for steers and heifers compared with the previous season. Bv comparison, the figures for the survey farms showed an increase of 128 per cent in cows and 51 per cent for steers and heifers. While the two sets of figures were not completely comparable, Mr Mclvor said that they indicated a

position of herd stabilisation rather than one of herd reduction over the last two years. However, with farmers proposing to change their policies, he said that from next season the position might be different. “The survey shows that farmers are adjusting farm livestock policies from breeding towards finishing cattle and in favour of other enterprises,” he says in drawing conclusions from the survey. However, a similar number of adult cattle had been wintered in the past winter to last year, and, in particular, increased numbers of weaner calves. “These stock numbers, together with the proposed reduction in breeding cows, will provide a similar level of cattle for slaughter as in the 1975-76 season. In the short-run the survey farms will, therefore, require killing facilities at the current season’s (the past season’s) output. . . .

“But due to the proposed changes in farm 1 policies, fewer calves are likelv to be bom in 1976 and 1977, with a consequential reduction in cattle for slaughter from 1977-78 onwards. “The main reasons for changes in farm policies appear to stem from economic factors, with low weaner calf prices and low profitability the major causes.

“Though only a small number of survey farms attribute their change of policy to problems in killing space for finished cattle, it is clear that uncertainty about killing space and lack of feed are major contributors to low store cattle prices in Canterbury. From this point of view, pressure upon killing space is important, and is leading at least in part to the proposed structural changes in Canterbury herds.”