Big jump in bobby calf kill
New Zealand's bobby calf kill was up nearly 10 per cent this spring compared to last year, just when beef prices look headed for a sustained pick up.
There seems to be no one reason for the significant rise in unwanted calves sent for processing, as reported to Beef + Lamb NZ by the country's meat companies.
Industry observers attribute the increase to anything from a 1.7 per cent or 90,000-head increase in the national dairy calving herd this season, to dairy farmers' need for more cash in a sharply lower payout year, to increased competition in the calf processing sector pushing prices higher.
Beef+Lamb economist Rob Davison said 2.07 million calves were culled in the year ended September, up 9.8 per cent on the comparable period last year, and beating his industry organisation's forecast of 1.98 million.
The calf kill was up 12.5 per cent in the South Island on last season and up 8 per cent in the North Island, Davison said.
The number of dairy cows which calved this season rose by an estimated 90,000 cows to 5.09 million. But industry observers said that did not fully explain the jump in calves sent to meat processors, especially when beef returns have improved for the first time in years and look likely to remain strong for a while.
No details are available on how many of this season's calves sent for processing were bulls or heifers or their breeding.
Davison speculated that fewer light and lower quality dairy heifer calves were retained by farmers because of this season's lower milk price forecast, and the prospect that next year may be even tougher. His suggestion was shared by DairyNZ regional team leader Phil Irvine. He said the downwards milk price payment shift made heifer retentions more marginal economically.
Some industry commentators suggested dairy farmers, faced with lower income from milk, needed extra cash from bobby calves. But AgFirst Waikato consultant Phil Journeaux said the bobby calf cheque was worth "bugger all" to the overall farm balance sheet.
Journeaux thought that given the lower dairy payout prospects, farmers would have reared more beef calves.
He also suggested that fewer unwanted calves may have been killed on-farm this spring.
Journeaux also noted that in July and August when farmers may have been thinking about rearing calves, the payout forecast was $7kg ms, so there was little incentive to rear calves for extra cash.
Waikato meat processor Greenlea suggested that increased competition for bobby calves had raised calf prices and drawn business away from petfood processors.
Greenlea managing director Tony Egan said food industry meat processors were now paying $35 and more for a calf, and petfood processors much less.
"Pet food was a viable alternative, but now it's worth the effort for a farmer to put in place a processing arrangement."
Egan said while it was good that more calves were going into human food chain, it was important for New Zealand to have "a healthy drystock cattle industry" which required sustainable numbers of bulls and steers.
Egan said many bull beef farmers had moved out of the business because of the growth of the dairy grazer.
Egan said the answer would come in the next two years to the question whether the jump in calf kill numbers this season would affect New Zealand's ability to cash in on beef prices.