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.
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