Agents say the strong chopper prices, courtesy of tight cattle supply across the board, is one of the few comforts for the dairy industry at the moment.
From May until the second week in July, dairy cow numbers sold in Victoria jumped from 20,572 in 2015 to 28,630 this year, National Livestock Reporting Service figures show.
Prices on average have lifted 33 cents per kilogram for light cows, 27c/kg in the medium category and 23c/kg for heavyweights.
With the total Victorian cow yarding reaching 30,968 in the May to July period this year, dairy lines are making up the majority quite comfortably.
Agents say the sell-off started before the April Murray Goulburn slashing of farmgate milk prices.
It was driven by the tough season at first but then the downturn in the dairy industry, combined with the skyrocketing cattle market, further fuelled the flush.
Many southern milk producers are looking at an extended period of milking for a loss and need a cash slow to stem the negative return.
NSW and Victorian specialist dairy agent Brian Leslie, DLS, said any other time milk prices had dropped below the cost of production, it had coincided with poor cull cow prices.
“This is a very good opportunity to cull cows not performing and get a good rate so I think the big numbers will continue for some time,” he said.
“A number of dairy farmers are also culling and replacing with fresher milking cows without having to outlay much.
“It used to be the case you had to sell two culls to buy one good milker but at the moment it is only costing farmers $200 for the changeover.
“That’s a bit of good news for dairy because the herd was progressively getting older, particularly with the lucrative export market of recent times, so this will turn things around.”
Dairy cattle specialist with Charles Stewart Livestock at Colac Tim Gibson said a lot of milk producers were opting to sell their later-calving cows now and hang onto boat heifers and join them.
“The export heifer job has fallen over – those heifers are only worth $950 to $1000, compared to the $1500-$1800 producers were getting 18 months ago,” he said.
“Meanwhile, it’s not hard to average between $1200 and $1400 on the chopper market.”
Landmark Leongath’s Terry Ginnane said April to May was when big yardings of chopper cows traditionally come onto the market but the high June-July numbers were directly related to the poor milk prices.
In some places, cow numbers had jumped by 40 to 50 per cent on what was typical for that time of year, he said.
The closing down, or scaling back of throughput at meatworks, was also contributing to the number put through saleyards, he said.
“There is a two-fold benefit – producers are able to increase cash flow with some very good prices around and also cutting out expenses, not having to buy in feed,” Mr Ginnane said.
“Dairy farmers can sell 20 to 30pc of the herd and still be in a position to ramp up within a season when milk prices turn by just rearing more heifers.”
