Agistment for livestock

Alright. Good evening everyone and welcome to the first of two webinars in our agistment in Focus Webinar series.

My name is Ella and I'm a Drought Adoption Officer and I'll be the facilitator for tonight's webinar. This webinar is brought to you by the Drought Adoption Officer Program, which has received funding from the Australian Government's Future Drought Fund through the Southern NSW Innovation Hub and the Southern Queensland Northern NSW Innovation Hub.

Firstly Local Land Services acknowledges that it stands on Country which always was and always will be Aboriginal land. We acknowledge the traditional custodians of the land and waters, and we show our respect for Elders, past, present and emerging. We are committed to providing places in which Aboriginal people are included socially, culturally and economically, through thoughtful and collaborative approaches to our work.

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A quick introduction of our speakers tonight. First, we will hear from Matt Dalgleish, who is the founder and director of Episode 3. Matt is a graduate of economics and education who has spent decades being involved in commodity and financial markets. In 2015, he transitioned into agricultural market analysis where he uses his data analysis and forecasting skills to provide commentary and strategic advice to the food manufacturing sector and the agricultural industry, tonight Matt will present on international, international and domestic cattle supply. Cattle on feed growth, processor versus producer returns, export demand and pricing forecasts.

Then we will hear from Todd Andrews, who is a beef development officer with the Department of Primary Industries and Regional Development. Todd has over 20 years of agricultural research and extension experience both in Australia and Canada, and tonight Todd will speak on whether agistment is a good option for right now, agistment pricing strategies, livestock weight gain targets, calculators and other tools and an agistment case study.

So I'm going to hand over to Matt now and he'll start us off.

Thanks for that, Ella and hopefully you can all see my screen now. So you're here to talk about cattle markets as Ella outlined. I just want to thank Local Land Services and the team for putting this together. It's an important time given the difficult times I'm in western Victoria, so we've been particularly dry, but I know the dry has extended into NSW in parts around the south there. So a timely session. So I'll get straight into it.

Episode 3 is a business run by myself and business partner Andrew Whitelaw, so we cover off on broadacre commodities, inputs and anything basically to do with that broadacre side of farming. So grains and oil seeds and fertilisers and livestock, a bit of fibre as well.

Down the right hand side, there's a swag of whether it's the website address that has a lot of free information, the type of stuff I'm going to go through today, but also we're fairly active on social media so if you don't follow us and you're into social media, by all means start following and keeping track of what we're doing. We provide a lot of free content, and then we obviously we make our money through engaging with the supply chain, so not just corporate farms, but through the supply chain with meat processors or grain accumulators or investors into agriculture, both domestic and international would sometimes require us to do due diligence type works on commodities so we have a swag of different groups through the supply chain all the way actually to the producer from the producer to the food end of the business and into the resale sector. So some of those companies that are making food products, we also consult to those and that's how we earn our money and giving presentations such as this.

So I'm going to start just with a quick snapshot of that broader meat space globally. Not just in terms of the beef side, but just the other meats, the key meats around the globe that are consumed and just showing you the growth in demand since 2005 and what's expected in terms of the Food and Agriculture Organisation from the United Nations, what they're expecting in terms of growth and demand for these key categories out to 2050. So where we kind of were, where we sit now in the grey and where we expect to be. And you can see for all categories there is an ongoing increase to consumption of meat products.

In particular, there's a big bleep in the next 25 years for beef, you can see poultry's also got a really strong growth potential. Two of the key both sides of the spectrum, I guess the higher value beef items and the more affordable poultry are the ones that have got really good growth potentials with growing populations in many parts of the world including Southeast Asia and China just on our doorstep, but also not just those growing populations but citizens within those countries that are growing in their average wealth. As those economies grow, the consumers, they get wealthier and they start to spend more on meat proteins in their diet and move away from plant proteins as they get wealthier. So that's the forecasted growth levels which are going to continue to keep a bit of an imbalance between demand and supply of these products because supply is not keeping up and will be difficult to keep up with the growth in demand over the coming decades.

Just moving to the Australian context. One of the first charts I always start with is a supply measure and it's called the female slaughter ratio. So that's the blue line and just to give you a quick explanation, if you're not familiar with the female slaughter ratio, it's simply the proportion of female cattle that we slaughter in Australia as a percentage of total slaughter. So it's a fairly simple measure, but what it does is it gives us an indication as to what's happening with regards to the herd cycle, so the liquidation or the rebuild phase.

And the threshold you can see there between whether we're in rebuild phase or whether in liquidation phase is 47%. So if we're slaughtering more, if the FSR is higher than 47%, we're slaughtering too many females to grow the herd effectively, and we go into what we've seen last year and this year, a mild liquidation phase. And if we're slaughtering less than 47% as an FSR, then that's when we're holding onto enough breeding stock to grow the herd. And you saw through 2021 to 2023, we had three years of really good seasonal conditions and also an incentive then to grow the herd and that female slaughter ratio ducked below.

But presently we're up, we're up in what I'd call a mild liquidation phase. So consistent with what MLA are forecasting the levels of FSR are pretty consistent with what MLA are projecting as a little bit over a 1% decline in the herd this year. So that's why I'm saying we're in a mild liquidation phase at the moment and indeed in some parts of the country as you head further north, where they've actually had some rainfall into northern NSW and Queensland, they're actually possibly already in a rebuild phase. So we are starting to see a little bit of a rebuild creeping into those northern areas that have had rain that obviously southern regions have been severely lacking and they're still liquidating presently. So the national picture is still one of mild liquidation.

Moving to beef processing conditions, we build our own Episode 3 model. It looks at beef processing conditions and takes a whole swag of data through the industry and then determines whether beef processors are having a good run of it or not presently and what I do is I calculate that as a dollar per head figure and then I adjust it into a decile so it gives you a bit of an idea, a bit like a rainfall gauge as to whether beef processors are in a monetary drought or a profit and loss drought, or whether they're making good money and in a boom time with good conditions, so think of it kind of like a rainfall gauge.

Historically, we assisted AMPC, which is the Australian Meat Processor Corporation. For a while there they were running their own version of the beef processor model, theoretical model about how processors are tracking financially and that's the blue line. And you can see that our model is built in a similar way because we helped AMPC design theirs. But it's slightly different inputs so then it has slightly different outputs, but you can see broadly speaking they do follow the same trend.

AMPC don't report on theirs regularly. They stopped in 2018, whereas we continue to report on ours and have done for nearly a decade now. It's in a different format. Like I said, it's a rainfall gauge, but it gives you an idea where they're tracking and if I show you it as a month to month over the last well this so far this year and also to last year's season, you can see the light grey little dots on the columns is where they were last year and then the darker black wider ones are where we are up to April, so you can see this year hasn't been as profitable for processors generally speaking as last year, but they're still in reasonably good condition. Early part of the quarter they're up in that kind of around that 70% level and they dipped a little bit in April with a bit of a rebound in prices of cattle through April and the export markets and the receipts they get from the export markets didn't quite keep up with how much they were paying to secure cattle.

So that put a bit of pressure on the margin through April. I've just actually updated this today. I updated this for May. I haven't got the data in terms of the chart yet, but I can tell you that it has rebounded back to that 70% level. So that'll be updated on the website next week, so keep an eye on that. But that's where we're sitting. It's not the best season, last year was much stronger half of the year, but it's still above average and reasonably good conditions for the nation's beef processors presently.

If we just compare the annual figure and again it's as a decile here like a rainfall gauge and what I've got here is the modelled processor outcomes which is in orange and as an annual figure, and what I've taken in the blue is the ABARES beef farm profitability data. So ABARES survey the nation's beef farms and they take a measure of how profitable beef farms are across the country on average and they produce that also as an index.

So I recalculate it into an index so it's the same, so we're comparing like for like and you can see that if you look through the last kind of 15 or so years of the data that it's quite often the case that when beef processors are doing well through part of the cattle cycle, beef farms are not doing as great. And when beef farms tend to be making more money, the processors are often struggling. It's not always the case, but it is reasonably consistent and that gives you a picture of the two sides of the supply chain there, battling out between whether we're going through a high cattle price environment or a lower cattle price environment.

And if you look at that data that I just showed you then, but on a scatter plot you can see just how close the correlation is. It's about 70% of the time it is a good way to explain that if beef processors are making money, it's probably a 70% chance that farm beef farms are not making as much and equally if the beef farms are making better money that season, there's a 70% chance that the processors are probably not having as good a time of it. So it's a fairly good indicator of how the different aspects of the supply chain are sharing the value of the cattle.

OK, just moving across to the feed lot sector and looking at the growth we've seen in feed lotting in the last two and a half decades in Australia. So you've got the blue solid areas, the cattle on feed each quarter and you can see we've had successive records of cattle on feed over the last few quarters. So presently we're nudging towards one and a half million head of cattle on feed as an average quarterly figure, which is the highest it's been on record. So the last quarter was a record and the one before that was a record.

So we've seen this steady growth in cattle on feed, we're seeing also the orange line, an increase in capacity of feed lot. So there is more space being built presently that's sitting about a bit over 1.6 million in terms of space, but obviously not all the pens are always fully utilised. So we do have this, what we call the utilisation number, but you can see that's the black line is where we're sitting, how full are the feedlots and you can see that we're pretty much at record levels as well in terms of how full those pens in the feedlot are so a really good solid trend in feedlot growth and in full use of the feedlot as much as practicable.

Getting those pens full and cleaned out quickly when they are getting turned over and refilled again it's very tight space presently. If you look at feedlots versus grass fed, so I'm taking a comparison of cattle that are turned off that haven't ever been in a feed lot which is the blue bar column versus the cattle turn off each year that come out of a grain fed system or are finished on grain, that's the orange bar. And then the ratio is how much of our cattle are currently being turned off annually, which have come from a feed lot.

And so you can see there has been a general trend from if you look at the dotted line as the kind of rough trend of how we've been growing since 2000. So back in 2000, we were turning off about 25% of cattle were coming out of a feed lot as being finished on grain and 75% grass finished only.

And then nowadays we've seen that steadily increase. You do see it fluctuate somewhat and has peaks and troughs according to how we are sitting in our cattle cycle, so if we're in rebuild or liquidation that can adjust the ratio and that's why we get that waving cyclical pattern. But if you look at that broad trend, you can see now we're heading up towards that 40% level. Couple of years ago when we were in the midst of our rebuild phase and we were holding onto the grass fed cattle as well and we were still turning off regularly out of our feedlots, that's when we saw that most recent peak where we got to I think it was about 47%, nearly of our actually in one quarter we got 50-50, in one quarter had turn off 50% out of the feed lot 50% grass finished.

But since the liquidation phase has begun, we've seen that ratio drop down again and then we're starting to rebuild as we're starting to head back towards a herd rebuild, we're starting to see that climb again. But we're now sitting about 38% of our cattle are being turned off out of the feed lot as of this year and 62% are grass finished. So we've still got a dominant grass finished system. We are looking to see that trend continue, though that feedlots will continue to grow.

I would expect probably by the end of the decade, we will be more consistently closer to that 50-50 ratio, but we're nowhere near the US in terms of their feed lot turn off is around 90% or more. It comes out of a feed lot in America, whereas ours is a bit more balanced, and to my mind that is a positive moving forward too that we have that balance because there's the traditional aspect of premium branded beef. You think of your Angus branded feedlot beef with high IMF, high intramuscular fat.

That's been the traditional considered the premium brands in certain markets like in Japan and South Korea that are crucial for us and in America as well and increasingly into China. But there has been in the last decade or so has been a growing what I call a secondary premium beef market, which is for a grass finished item and whether that's considered maybe organic or more sustainably produced, lower carbon footprint.

There is a growing market in some areas like in the US and in Europe in the UK and even in Australia for those Coles brands, I think it's a Graze brand or Woolworths have their own branded kind of grass fed beef and you've got Cleavers meat which is organic and several of those grass fed, the Green’s never ever program as well. It's a grass fed non-HGP program, so those are what I call a growing market for secondary premiums as well, so a different type of premium to the traditional grain fed grain finish premium beef.

And so as that market's growing, I think Australia's nicely poised to take advantage of the traditional grain fed sector and continue to see our feedlot sector growing, but also having access to this new developing premium market of this more potentially more sustainable in the perception of the consumer at least, more sustainable type of beef consumption.

And so that's another real added bonus for the Australian industry that we can access both of those premium markets into the international space.

So talking about international markets and export markets, this gives you an indication as to how that market share is distributed. So this was last year's trade in terms of proportion of trade from different key countries. You can see Australia in number two position is the second biggest exporter of beef. We're not always number two, but we're usually in the top four.

Obviously Brazil is the big one, but they're not a country that we compete directly with in a lot of markets. We tend to compete more with the USA as a direct competitor into our key markets and also countries like Argentina and New Zealand and Uruguay and Paraguay are probably the ones that we're more in the competitive space in key markets, but the USA is the big one and they set floor so far this year.

So they're a reasonably big player, but they have been a bit curtailed recently because of their droughts and their six years of liquidation that they've been undergoing, which I'll come to in a minute.

Just while we're looking at the global picture for supply, this shows you what is expected in terms of the change in herd for the top 15 beef producing countries. So this includes those top exporters I just showed you, but it also includes countries like China that don't export beef, they consume everything they make and then they bring some more in.

But you can see as an immediate picture there that of the 15 countries that are producing beef, there's only two of them that are in any level of rebuild presently this year in 2025. That just goes to show you that we are in a very tight environment globally for beef in terms of the availability of cattle and in some instances the availability of export beef or beef to be consumed in some of these countries.

So broadly speaking, supply is tight, but in particular it's tighter and it's tightening in the US and the US is one I want to focus on shortly.

But before I go there, I want to just give you a picture of how the Australian export markets have been faring. We're number two, like I said in the world last year and that was the blue line is our last year's month by month exports total export trade, the dotted line is our average five year average line. So you can see we're well above average last year and that grey shaded zone is what I call the normal range. So we were above average last year and we were above the normal range as well.

This year we've had even a stronger start to the season and indeed May is the highest May volumes on record for a May and it's the third highest month on record ever in terms of our beef export, so that tight supply picture and the fact that Australian beef presently is lower price than our key competitor, the US means that we've had a very competitive season and we've been taking market share back from the US in key countries like China and Japan and South Korea.

So looking at the distribution of our trade so far this year and we can see US is number one as a destination for Australian beef at 30%.

They're not always the top one. Often it's Japan, but for the last year and a half or so they've been having a fairly insatiable appetite and they've moved progressively up to number one. The last time they were at number one was back in the 14 15 drought, and it was also at a time when the US had just come out of a liquidation phase and into a rebuild.

And so they were requiring extra imports to satisfy their domestic market and Australia were in a drought period, so we were able to supply quite a bit of product back then. We're in a similar scenario now where our prices are quite competitive, and we have just come off that three years of rebuild phase through 21 to 23.

So our herd was nudging towards 30 million head. So we have good herd size, good production levels, good carcass weights and we had the ability to supply countries like the US that have been in decline in their herd numbers and so that's why they're number one.

China just moved to number two in the last few months. So it was Japan in number two but since the whole Trump China trade spat, the US beef into China has been a bit on the nose for the Chinese consumer, and several about 380 or so beef packers in the US have lost access to China, hasn't been renewed.

So that's changed the dynamic of it and allowed a bit more Australian beef to go into China and obviously we've gone through our own diplomatic issues a little bit earlier, a few years back where we had some of our own abattoirs temporarily locked out of China, but all of our abattoirs are now got full access and indeed just in the last month or so we had several more abattoirs, both beef and sheep meat, getting access granted to China for the first time so the diplomatic situation is good and we're in a very competitive position and that's meant that the Chinese demand has picked up for Australian beef.

So put them into second spot. So yeah, it's a nice broad picture of where we sit and a reasonably well diversified key markets.

One thing I'll focus in on and just remind you while the US is our number one competitor, sorry, our number one client for beef this year, when you look at China and Japan and South Korea, the US is also in those key markets our number one competitor into those top three markets, China, South Korea and Japan and indeed in particular in Japan and South Korea, they're pretty much our only competitor largely speaking.

Whereas in China we do compete a little bit with some of the South Americans, not so much Brazil, but certainly Uruguay and Argentina. So what happens in the US is incredibly important to Australia because of that status as being a top client of ours and also a top competitor.

It means that the US is key and that's why I'm going to focus a little bit on the US.

This is showing you the historic trend in access to China prior to the first Trump administration, so before 2019 the US really didn't have a very big footprint into China for their beef. So beef imports from the US into China were less than 1% of all beef imports into China pre 2019.

But after the initial trade war of the first Trump administration that they had with China, they eventually reached a deal called the phase one deal and that required China and US to do a bit more trade together across several different commodities, including allowing better access to US beef into China.

And that coincided, that period of that phase one trade deal through 2020 and 2021 coincided with the diplomatic issues that Australia was having with China. And that was when we lost some access for some of our abattoirs.

So during that period of time, we can see the Australian market share into China declined and the US gained at our expense, largely speaking, they also took some market share away from New Zealand at that time as well into China.

And then we had a few years where it just flatlined for a while. But in the last couple of years because of that changing dynamic of trade and the phase one deal had finished, the US pricing was getting much more uncompetitive and getting higher and higher each year. And Australian pricing was getting more competitive each year, we've had a bit of a rebalance.

We've had a new government in place in Australia that's been able to smooth over the diplomatic issues, and we've got access granted back to all those abattoirs I spoke to plus some extras.

So in more recent years, we've actually kind of clawed back a bit of that market share from the US in China. So we're sitting at about 12% imports of beef into China come from Australia now and the US are around 7%.

So it'll be interesting to see whether they come to another similar agreement they did last time around as a phase two trade deal and get access returned, or whether we continue to see this kind of trade argy bargy going on.

I suspect that they're going to come to a deal at some stage, but given the dynamics of pricing, I don't think that they're going to have the same level of growth that we saw the first time around.

So I think Australia is in a much better position to maintain and maybe even increase market share this time.

OK, just looking at the US now, because I said how important the US situation is for Australia and this is the female slaughter ratio as a US measure, same kind of calculation as what I showed you for Australia, the blue line, but their threshold between rebuild and liquidation slightly higher than ours.

Ours was 47% and theirs is 48%, but you can see it's a much more even distribution of rebuild and liquidation and you can see there at opposite ends of the cycle to us presently they've had six years of liquidation and they're now heading back towards a rebuild, but they're not quite there yet.

I think they're probably going to move into a rebuild maybe in the next six to nine months. But we've seen this period of very steady liquidation and it's meant that they're down to their lowest cattle herd in the US in about 75 years.

And that is now starting to impact upon their ability both to export and to satisfy their domestic customer. That is very much impacting upon their price at the moment for cattle and for beef.

And if you look at that spread of herd rebuild versus liquidation with that female slaughter ratio, you can see the US is a very reliable predictor. The US female slaughter ratio predicts the accuracy of their cattle cycle historically about 93% accuracy.

There's only about three years in the last 50 years where it hasn't predicted what was happening with their cattle herd in that year.

So it's a really reliable one. But we have been moving, like I said, back, that orange dot shows where we're nearly heading back to crossover that 48% level and at some stage, I suspect this year maybe towards the end of this year or early next year, we'll see the US back in rebuild phase.

It's important to note too what happens with cattle prices in the US through their liquidation and rebuild phases, and I went back through all the data for the last 120 years or so and looked at the average price moves through the different periods of liquidation or rebuild phase.

And you see for the early periods of the rebuild phase, you see a fairly flat, it's a bit of a toss of a coin where the prices go up or down, but the orange line, the liquidation phase, you can see there's a fairly definite trend that towards the back end of the liquidation, the last couple of years, the years five and six of the liquidation phases, that's often characterised by really high priced environments.

And you can see the trend of that line going steadily up as you get further into liquidation, which makes sense because they're working down their supplies and then as those supplies get tighter, prices start to climb.

And then the high price is a signal that the market's sending the signal to producers to say you need to go back to rebuilding again and creating more cattle because we're getting short here.

And that's what we see. It's a pretty regular cycle in the US.

And if you look at the actual prices this year, so this is US heavy steer, the equivalent of the US heavy steer in blue versus the Australian heavy steer price, and this is slightly old, this chart is about two weeks old.

So the blue one actually has made a new high again just in the last week or so. So you've got even higher pricing now and record levels for US cattle.

And you can see the gap that's opened up between Australia and the US that's what I was saying before just how much more competitive presently we are compared to the US in terms of both in those export markets, but also even with the 10% Trump tariff, we're still Australian beef is still lower than the domestic US beef because of this price differential in the cattle markets.

And if you compare pricing where it sits now to some of the other players, so you can see Australia in orange and this is back to Australian cattle pricing as a global comparison, you see the US are right up there at the top with the UK.

So very strong and uncompetitive cattle pricing in their markets for their own domestic cattle. But then you've got Argentina in the last few months has gone above Australia as well.

So there are another smaller competitor into places like China, they're more expensive presently than Australian cattle, and the only one really that's sitting below us in a big sense in terms of a big player is Brazil.

But like I said, they're a big exporter, but they don't tend to compete directly in many markets with us because of the type of product they produce.

We're tending to target some of those more premium markets that are more in competition with the likes of the US so it does kind of show just how competitive Australian pricing is on the export stage.

And part of the reason why we're seeing such huge numbers going exporting from Australia in terms of beef is because of this price differential.

Just looking at that differential to the US and you can see that it's actually not even though we've got that differential given the slaughter levels that are projected for this year, our pricing still doesn't quite reflect where we should be and we're still a little bit discounted I'd argue.

So that's kind of helping to underpin our market at the moment presently and what we've been seeing a bit more strength on the buy side and prices rising as we've headed through winter.

And still the prospects going forward, if I look at my fair value model, which is the grey shaded zone, is putting all the data in, looking at Australian dollar levels, looking at our slaughter levels, looking at our production levels versus the US, looking at the US futures pricing relevant to ours and looking at our export markets and the demand in our export markets.

So I combine all of those factors, even looking at how the processors are going domestically, if they're making money or not, all of that goes into this model.

And it tells me based on all the data inputs, where should our cattle price be trading at and that's that grey zone. And the orange line is the actual MLA indicator, the annual average indicator.

So you see the model is a pretty good predictor of where it should be as to where it actually does end up for the year.

It's it tends to sit within that range fairly nicely usually. Sometimes you get little deviations away when the model has things that it can't forecast, like when Trump announces massive tariffs and it has a bit of reaction.

But broadly speaking the model is a fairly good indicator of where we should be as a fair value.

And you can see for this year we've got the annual average price for heavy steer in Australia is going to be 365 cents, according to the model as an annual average for the whole of 2025.

And currently we're sitting at about 350 cents, so there's a little bit of upside still yet to go to reach that average level and for next year the model is forecasting an average annual price for next year 2026 of 400 cents live weight for the heavy steer.

So we've got a bit of upside for next year as well.

And if you look at the range you can see we might even creep up into that high four hundreds or low five hundreds if we get a really good season and it's less likely we're going to see pricing come down given the dynamics in the market.

So for those that are considering their situation and I'm sure we're going to hear more from Todd around the feeding opportunities, the prospects globally and domestically are still fairly good in the producer's favour both for this year and heading into next year.

That's it for me. I think I don't know if you want to do questions now or at the end.

But I can take some now or I can have them at the end.

It's all right with you, Matt. We might wait till the end and we'll do them all together.

Yep, no problems at all.

So you should be back to you now, I think.

Great. So Todd, when you're ready, you can take us away.

How's that Ella? All tickety Boo.

Yep, all looks good.

Look, thanks for the opportunity to talk a little bit about agistment here this evening.

As Ella mentioned, some of the things I'm going to be working through are, does agistment look like a decent option this year, some weight gain targets, how to price agistment either comparing rates available or setting prices, and just briefly going through some agistment and other calculator tools.

So the agistor owns the land. Why would you agist out your land?

It's a lower risk option compared to trading, especially in the short term.

We've seen a lot of price variation in recent years, which creates opportunities, but it also creates risk. And so depending on financial situation, some people are just looking for that lower risk option.

Agistor may not have the stock or the capital to go and make a large outlay for stocking their property.

Or maybe just new entrants into the industry and toe in the water may not have full knowledge, but happy to take on some agistment.

But it might also be a case of matching stock to the type of feed available.

So for example, there's lots of pastures looking like that, frosted pasture, that’s a tropical pasture, but all the native pasture and even your temperate pastures, phalaris will look fairly similar to that.

So fairly rank pasture, low to moderate digestibility.

And for someone that owns that land, the potential for stock to go on there, do 300 grams a day for the next few months, might not be that appealing.

But that opportunity to someone else who's actually faced with feeding or selling their stock, that is a great opportunity and a win win situation because short term agistment can get through that bulk and then open up that pasture ready to take off again when spring comes.

And it does give the agistor some opportunity to stipulate stock numbers compared to leasing.

So the agistee owns the livestock, needs to vacate land due to flood if you're on the coast or drought in the southern part of NSW.

Or it might be a case of identifying a trading opportunity but doesn't own any land and so in that case the stock might be bought specifically to go onto agistment.

And in that case you probably need to have contracts lined up or some kind of price certainty so you can do your sums because with transport and other costs short term trading can have risk and opportunity.

Again just generally seeking a fixed or short-term for a specific number of stock.

To agist or to feed stock for that to be worthwhile to the landowner, stock must be worth more at the end of the period than at the start.

Otherwise, it's better simply to sell the stock now and buy stock again later.

So you heard from Matt, there is plenty of upside into the stock market. The world's a bit of a crazy place, but overall plenty of potential upside.

Market wise, if you look at the BOM outlook for August through to October, this later this year, there is excellent potential for a good spring acknowledging that some regions are facing very challenging conditions and that there might be enough rain in this forecast to completely turn things around.

But overall, these predictions, which are moderate to pretty good accuracy at this time of year would favour a pretty solid spring at this point.

And I think it's going to reward the efforts of those producers who can get stock through to that point.

So when combined with overall robust market scenarios, I think you can make a pretty strong case for finding agistment if that's the situation you're in.

Compare that to the outlook similar time of year in 2023, there is not much chance of agisting stock and hoping for good weight gains and a better price per kilo at the end of that agistment period.

So quite a different outlook and potential for it to pay off and that's exactly what happened in 2023 and we had a massive price slump at the back end of that year.

Most agistment that you would see will be priced as dollars per head per week.

It's pretty simple to do some back of the envelope calculations on the weight gain expected per week versus the cost.

So for example on say yearling type stock, if you're hoping for 400 grams a day, seven days a week, roughly 3 kilos of gain over a week.

At $4.00 a kilo, you're looking at $12.00 a week appreciation in the value of those stock.

If your agistment is $8.00 a week, seems like a great deal, but you must include all components of the agistment.

For example, if you went onto the future beef website and searched for their business tools, they have an agistment calculator in there.

The future beef calculator suggests that the overall cost can be around double the dollar per week value.

So if you look at the agistment cost, that's a fairly comprehensive calculator that they have.

But the agistment summary of those costs are basically your number of head, number of weeks and dollars per head per week.

But you've also got transport to the agistment, transport either to sale or back home at the end of it, and your inspections, which are really important.

So you want to go and check out the property before the cattle. You want to go and check on your cattle while they're there.

You make sure that all of the factors that might have been included in the agreement are being stuck to, that the stock are looking OK and another trip to round them up to bring them home.

Any health costs that might be over and above what you would do if you're keeping those cattle at home must be included.

And mortality, so hopefully if your inspections are good pre and during, you wouldn't have any mortality over and above what you might have if you kept them at home.

But something to bear in mind, especially if there might be calving cows because you're just not going to be there.

The future beef calculator you can also put in interest foregone by instead of agisting stock, just selling them all and putting the money in the bank.

I don't usually include that because I like to see everything at face value to make a good comparison.

So they're your costs and really your revenue from the agistment comes from the weight gain of those stock and hopefully an increase in the dollar per kilo value.

What is the objective of the agistment?

So if you went out West right now where there was lots of flooding, there'll be some spectacular paddocks to look at.

There are oats crops around as well, because we've had a really good autumn and winter season in northern NSW. Good feed is required to achieve target weights that you might have.

So for feedlot steers, you're looking at at least 420 kilos live weight.

Joining weights for heifers, so if you want them to keep motoring along so that when they come home they fit right back into your herd's joining and calving periods, then those weight targets might be important.

They're important if your stock are fairly backward and you need them to recover, otherwise you're going to have health issues.

Or to maintain young, so I'm talking about early weaned stock there in particular less than 150 kilos or lactating animals. Good feed is required for those stock.

I'll be talking about compensatory growth shortly.

But really if you send stock away onto good feed like this and they've got excellent weight gain, then I would strongly recommend that you do the sums on potentially selling straight off that feed because they may not look as good again coming off that feed in the foreseeable future.

And we'll talk about that shortly.

If you've got really good feed, send off for agistment where possible, split your cows and calves.

It is exactly the same as if you were drought feeding, trying to feed a calf through the cow via milk is an extremely inefficient system.

Much better to wean the calves and those calves there in that bottom photo, big enough to be early weaned and sent away, and will do great on this feed once they get adjusted to it.

And that feed can last a really long time whereas intake of lactating cows is enormous.

And a dried off cow at that point, she may or may not even be pregnant yet, has an extremely modest maintenance requirement.

And can, my time in the hunter, cows there can get by on the smell of an oily rag if they're dry.

Much more common in the tablelands and other areas to see pastures that look like this.

So frosted pasture, fairly low digestibility and because of that you also got low intake.

But the benefit is that that feed can last a long time.

You're looking at fairly modest weight gains of course on that type of pasture but you also got potential for compensatory growth when conditions improve and cattle come home onto better and cheaper feed.

The cheapest feeds are always the stuff you can grow yourself.

In my experience, generally 300 grams a day is adequate for young cattle in the short term.

Why do I say that.

There's been a fair amount of research on the potential for compensatory growth and really that 700 grams a day is a bit of a pivotal point in that post weaning period.

So if you send cattle away and they're on oats crop like the top photo and they might be doing upwards of a kilo a day, when you bring them home back onto more moderate quality pasture, actually they do the opposite of compensatory growth so they will grow slower than you would otherwise expect.

Versus stock that might do somewhere around that 0.3 to 0.4 kilos a day, still ticking over and once they have the opportunity to grow out on better quality feed, that's what compensatory growth is, they grow much faster than you would expect given the quality of feed available.

Now the other option is that you send young stock away or around we're looking about that 250 kilos weaners and they don't grow at all or they may even lose weight during the adjustment period.

And generally what will happen with those stock is that once they go back onto decent feed, they would just continue on their growth path.

So it won't do any better or any worse than you'd expect. They might end up actually slightly smaller overall, not completely fulfilling their growth potential.

If they're heifers and that's not going to be necessarily a problem.

They still have the same genetic potential.

And if they're a little bit smaller, just means they need a little less feed the next time you run into a dry spell.

Pricing agistment, how do you price agistment for different quality pasture.

I know in the New England area where you've got a range of different soil types, you can often come onto different prices for the same type of animal.

If you're on basalt versus granite or traps or different soil types, different quality pasture, different growth potential, how do you really compare those adequately.

Couple of different ways, dollars per kilogram weight gained, and so this pricing system can often be used especially for feeder steers, where you have a known price at the other end often or for dairy heifers, which have really specific weight gain targets again so that they are going in calf and producing milk at the right time of the year.

Or on a dollars per DSE per week basis.

So a DSE, it is a dry sheep equivalent.

It's basically the feed required, the feed eaten by a 50 kilo dry sheep, so a wether or a dry ewe.

So for example, I've got some examples of the DSE equivalents for different stock classes there.

So a 250 kilogram weaner gaining 0.3 kilos a day has a DSE rating of six.

If you look at a 350 kilogram yearling also gaining 300 grams a day, DSE rating of eight, so 25% higher.

That same yearling doing a kilo a day all of a sudden has a DSE rating of nearly double your weaner.

And so that's the extra feed intake, the energy requirement for that animal to put on that kind of weight.

If you look at a dry cow there weighing 550 kilos with 0 weight gain, so you send her away, she's in decent shape, doesn't need to gain any weight, she has a really modest DSE rating.

Pretty similar to a much lighter yearling.

Once that cow gets pregnant, so I'm talking the last couple of months of pregnancy, her energy and her intake requirements go up by sort of 25% compared to the dry cow.

And once that cow calves and starts lactating, her energy requirements basically double.

So this gives you a really good feel for how much feed these cattle can eat by looking at their DSE ratings and that can give you a pretty good basis to compare pricing for agistment that is available.

Another business tool that's on the Future Beef website is being able to compare selling or feeding stock.

In this case, I'm looking at a 500 kilo dry cow.

I've priced that cow at $2.00 a kilo.

If we sold her right now, there'd be freight to the saleyards, commission, yard fees and other selling costs there, so the value of that cow right now to sell her is around about $930.00.

So what I've done here, I've compared feeding that cow versus sell her at 930 and buy back a similar item in two months time.

So to feed that cow, she's going to need roughly 10 kilograms of dry matter per day.

I've priced that feed at $700.00 a tonne.

So that's $7.00 a day to feed that cow.

For 60 days that's $420.00 plus some costs, fuel, repairs, maintenance on your gear.

So you're looking at a cost to feed of $440.

To break even on that cow after the 60 days, she needs to be worth $2.88.

If it's $2.50 in two months time for the same cow, you're looking at an advantage of $100 a head just based on those numbers to sell and buy back versus feeding.

Feeding is really expensive at the moment.

To calculate the break even period, you need to know transport costs, feed costs and an agistment cost.

For transport here I've used a scenario, our agistment is 350 kilometres away.

For a double deck truck, you're looking at $6.50 a kilometre, but you can fit 45 cows on.

That's around about 50 bucks a cow one way, $100 return.

If you only have 15 cows then you need a table top truck, you can only fit 15 cows on and mileage cost is still $5 a kilometre.

Now all of a sudden your transport cost is $120.00 per cow one way, 240 return.

So it's really important that you do your sums on your transport costs.

Our transport costs are 100 bucks a head return, our feed costs are $7.00 a day, so 50 bucks a week and our agistment overall costs are $10.00 a week.

So straight away you can see I don't need to agist these cows for very long to make it more worthwhile than trying to feed them at home.

And there you go, 2 1/2 weeks.

So if I find I can agist my cows for three weeks and above, I'm in front compared to trying to feed them.

I just wanted to finish off by talking about a case study.

We had a trial that had started in March 2022 and we purchased 400 weaner heifers from the northern rivers of NSW and we were running them at Alstonville.

It had been a fantastic season. The heifers were really well grown, very sappy, but extreme wet conditions, that was the Lismore flood.

And we just couldn't keep those heifers, we couldn't even feed them in the paddock.

They were starting to get sick.

So we had to find a home for them.

So we had similar type of options, pretty good feed out west, some paddocks available and quite a bit of frosted or native pasture available.

So we settled on some agistment in the Northern Tablelands that could take the whole 400 heifers.

You can see we had to get them out of there in June.

So it's quite a shock to these coastal heifers.

Native or semi improved pasture and just to run you through what happened with those heifers.

They definitely had their working clothes on halfway through that agistment.

But you can see far from being welfare cases but still we had stripped a fair bit of that weaner fat off them.

At the time the project started, those heifers were averaging around 285 kilos.

Standing around in the mud, they were already losing 400 grams a day on the home farm.

So it just wasn't an option to leave them there.

And they continued to lose weight once we got them to near Armidale while they adjusted to new pasture, new conditions, frosty nights.

So I continued to lose 500 grams a day.

But once September came, things warmed up, pasture started to green up, improving digestibility.

Those heifers turned around, so overall from June to November, those heifers put on 350 grams a day per head, and we had budgeted for 300 grams a day.

So that was a great outcome.

Took them back and joined them for 9 weeks starting in December so quite a few months later than we hoped.

You can see that weight gain from December to February 800 grams a day, so no compensatory growth there.

So those heifers had done it too hard for too long.

But look overall nine week joining and 86% pregnancy.

So overall a great outcome.

So what I would say if you're contemplating agistment is gather as much information as you can and then make the best choice available.

Review the outcome.

In our case we had a little bit of mortality due to unforeseen pregnancy, but no more than we would have expected at home.

Review the outcome, learn from mistakes and move on.

In your process of gathering information, there's a prime fact here which is almost 20 years old, but otherwise really good and relevant information there.

And I mentioned the Future Beef website as well.

Thanks, Todd. That's great.

So if anyone has any questions, feel free to pop them into the Q and A function.

We have had a couple of questions come through.

So Matt, in the context of selling or holding onto stock, what are the key features of market information that I should be looking at to inform that decision.

Do I need to look further than the market update in The Land.

Yeah, good question.

There is a lot of information out there.

I guess one of the key things is to try and not get too saturated.

The Episode 3 website is regularly updated.

The ACM masthead so that includes your Land, your Stock and Land, Queensland Country Life.

MLA website has some really good information.

Listening to your ABC Country Hour is also good.

And even bank type information like what Rabobank put out is pretty good.

So probably it's more a matter of finding the ones that deliver the information in a style that suits the way you want to receive it.

And obviously ones that are data backed.

So Episode 3 and MLA, the data team there, they are focusing on what the numbers are showing and interpreting the numbers rather than just giving an opinion.

So I'd suggest to go with the ones that have got good quality data and reputable.

Right, thank you.

And for Todd, what are some key considerations for farmers who are opening the gate to host agistment livestock.

Health aspects would be one of your major ones.

Making sure that the expectations that you have as an agistor would be the same as someone that's agisting.

What are you going to do if there is mortality.

Are you definitely fencing.

You would want to know if your fences are fantastic.

You want to know about the temperament of the stock.

Are these unjoined heifers coming, am I going to have bull problems.

Is someone planning to send a bull with them.

Definitely your feed, making sure you have enough feed.

Being really clear about the timeline for the agistment.

Because if things go sour, it can be pretty tough to get agistment cattle off if that person has nowhere to go with them.

Great, thank you.

In terms of longer term agistment scenarios that you've seen, do you think there could be much return in improvements such as fertiliser or lime.

There's been heaps of research on return on investment for fertiliser and lime.

The first thing to do is improve efficiency and that often means better watering points, better laneways and maybe more paddocks.

Once you go past that, your next best return on investment is going to be single super phosphate.

Australian soils in general are very low in phosphorus and in most cases sulphur as well.

So it's a pretty good bet that if you haven't used a lot of fertiliser or lime, then they're going to provide excellent returns on investment.

And one more question, where is the most agistment advertised.

Agents are often not your best source.

An agent actually makes most of their money out of commission from sales.

So they want people to sell stock.

They may get some kickback on an agistment deal, but it's not their main line of business.

I would say it's one of those areas of agriculture that's still pretty old school.

There's Facebook and social media can definitely help out, but actually getting on the phone and doing the hard yards, that's what you need to do.

Agents are a decent first port of call, but once you get a name, then you just have to follow it up.

Great, thank you.

All right so that's it for our questions.

So everyone, thank you for attending tonight's webinar.

If you're not already aware, there is a second webinar running tomorrow night which will cover a little bit more about health and biosecurity considerations to make surrounding your animals, as well as a presentation from Sarah Birchmore from Agistment.net.au.

So that will be tomorrow night at 6:00 PM.

And there's also a QR code up on your screen, so this is a feedback form.

We really do appreciate your feedback.

And if you don't have a mobile phone or you'd prefer to do it on the web, there is also a link in the Q and A chat that you could use.

So thanks for everyone for attending and I'll end the presentation now.

Good evening, everyone, and welcome to the second of two webinars in our Agistment in Focus webinar series.

My name is Ella and I'm a Drought Adoption Officer working in the Northern Tablelands region and I'll be the facilitator for tonight's webinar, Fine Print and Fence Lines, Getting Agistment Right. Just quickly, this webinar is brought to you by the Drought Adoption Officer program, which has received funding from the Australian Government's Future Drought Fund through the Southern NSW Innovation Hub and the Southern Queensland Northern NSW Innovation Hub.

Local Land Services acknowledges that it stands on Country which always was and always will be Aboriginal land. We acknowledge the traditional custodians of the land and waters, and we show our respect for Elders, past, present and emerging. We are committed to providing places in which Aboriginal people are included socially, culturally and economically, through thoughtful and collaborative approaches to our work.

Just some housekeeping before we get started. This session is being recorded and will be available on our YouTube channel to view later. There will be a Q and A session at the conclusion of tonight's presentation, so if you do have any questions, please place them in the Q and A tab which can be found in the control panel. Lastly, please fill out our post event survey at the conclusion of the webinar. Your feedback enables us to improve our sessions and deliver the content that you'd like to see in the future.

To introduce our speakers, first we will hear from Sarah Birchmore, who alongside her husband David, founded Agistment.net.au, Australia's number one platform for helping graziers find agistment. Sarah is a western Queensland cattle grazier who has first hand experience on both sides of the agistment equation, and tonight Sarah will present on how to prepare for agistment, what to include in an agistment agreement and how to have a good ongoing relationship with the land owner.

Then we will hear from Dr Lisa Martin, who is a district veterinarian with Local Land Services. Lisa has worked as a vet for 40 years and has a wealth of experience from running her own practice as well as working as a district vet. Lisa is based in Tenterfield, where she operates an Angus stud alongside her family. And tonight Lisa will speak about what to look for when inspecting properties, considerations to make surrounding animal health and biosecurity, and adhering to regulatory requirements.

So without further ado, I'll stop sharing. And Sarah, you're ready to take us away.

Sorry about that. That's all right. You're ready to go now. Hi everybody. My name is Sarah Birchmore. As Ella said, I founded Agistment.net.au in 2012 when my husband Dave and I were looking for agistment for our own herd, and in the years since we've helped thousands of graziers fill their agistment. We've had our own cattle on agistment many times and have had some really great experiences and some that we will chalk up as learning experiences. So I'm here to share what we've learned from both running Agistment.net.au and from our own personal experience.

So I guess if you're looking at offering your property for agistment, there's a few things you need to run through beforehand. First is know what you're offering, so before you put up a listing or let people know that you've got agistment available, you've got to take stock of what you actually have available. How much feed is on offer, is the water reliable, is it easily accessible, how many head or what class of livestock can your land comfortably support. And if you're upfront and realistic about what's available it helps to attract the right kind of inquiry and it can avoid headaches later on.

Secondly is setting your boundaries. Is your fencing stockproof, who will be responsible for any repairs or maintenance of the fencing once the agistment cattle are on your property. You need to consider access to yards or loading ramps, biosecurity protocols which Lisa is going to elaborate on. What shared infrastructure or areas are going to be off limits to the person who's coming onto your property and which ones will they have access to. Is it a shared paddock, will you have cattle and sheep, will you have more than one agistment mob in that paddock or will it just be a single owner. Setting clear boundaries right from the very start helps to build the trust and the clarity in the relationship that you're working towards building.

Next step is deciding on the terms that are going to work for you. So agistment can look very different depending on the arrangement that you end up coming to. So you could charge per head per week, you could have a flat paddock rate, or you could have a profit share arrangement based on weight gain. Often people will consider someone helping them with fencing or building or mustering in lieu of payment or in return for a lower agistment rate. You need to know whether this is specifically a short term arrangement, if it's seasonal, or if you're actually looking for a longer term arrangement that will go on for a number of years.

Probably also best to decide whether you want someone who is going to come and check their own cattle, or whether you're going to be responsible for checking their cattle. There isn't a one size fits all for this sort of arrangement. It's really about what works for your setup, your lifestyle, and what it is that you're trying to achieve. But we do recommend that you think about how the pricing and how the actual agistment is going to run before you even offer the paddock.

Think about the type of agistee that you're looking for. Are you happy to accept cattle or sheep, will your fences handle cattle or sheep, would you prefer someone who's local and experienced, are you happy to have someone who's coming from much further away, or are you interested in helping out a smaller scale grazier who's just starting. Knowing what it is that you're looking for really helps you decide which inquiries you might follow up.

And then once you've got all of that information out, we recommend that you present your agistment listing clearly and honestly, so include all of the essentials, your general location or region, the type of feed available, what the water sources are, what access to the property is, which livestock you'll accept, whether facilities like yards or loading ramps are available. The more detail that you provide upfront, the fewer time wasting enquiries you're going to receive down the track.

Listing your property for agistment should be a win-win, but it starts on being clear with what you can offer and what you expect in return and who you're hoping to work with. And then once you've decided all that, you need to tell people, it's just about impossible to sell a secret.

So we're moving on, you've put your agistment out there. You've had a few people call you and say they'd like to look at your property. We always recommend that they come and inspect your property so that they know what's there, and also so that you get a feel for them and they get a feel for you.

So with inspections, we recommend when you're taking potential agistees on a tour of the paddock, show them the worst fence line and the worst setup as well as the best. If you're open and honest about the strengths and weaknesses of your country type, it sets a standard of communication.

Set out the responsibilities. Who will check the fences, waters, cleaning troughs, how often will those things be done, who's going to check the animals. If you're on a rotational grazing system, if the animals need to be moved, who's going to be responsible for this.

The next one is trust your gut. We always recommend that landowners ask for references from graziers, and likewise graziers should not be afraid of asking for references from the landowner either. Agistment involves someone else having access to your property or someone else being responsible for the care of your livestock. You need to make sure that you feel comfortable and can communicate well with the person you're entering into an agreement with.

Don't be afraid to let an opportunity pass. Make sure things add up and will work for you because it can end up costing you more if you go into the wrong agistment arrangement.

Once you've found the right person and agreed on terms and price, it's recommended that you draw up an agistment agreement.

That agreement should include the parties involved, property details, duration of the agreement, agistment fee, livestock details, responsibilities of both the landowner and the agistee, stock movement conditions, insurance and liability, termination clauses, access to the property, dispute resolution, health and safety, any special terms, and signatures.

If you are sending cattle on agistment, we recommend registering livestock on the PPSR, the Personal Property Security Register, which provides legal protection and establishes your claim over livestock.

Agistment agreement templates are available through industry bodies or solicitors, and we recommend using a solicitor to ensure the agreement suits your needs.

Once the agistment starts, landowners should notify neighbours about agistment livestock. Graziers should tag animals clearly. This helps if livestock stray.

Throughout the agistment period, ensure responsibilities are fulfilled and maintain communication. Building a good relationship can open future opportunities.

So that's all of mine. Thank you.

All right. Thank you, Sarah.

Well good evening, everyone and thanks, Ella, for the invite to chat about some practical biosecurity and animal health considerations for agistment livestock.

I'm Lisa Martin, a district veterinarian with Local Land Services based at Tenterfield in the Northern Tablelands.

The kind autumn and season in northern NSW has seen producers from wet coastal areas and dry southern areas looking at agistment opportunities. Whether you're feeding livestock in dry times or recovering from floods or bushfires, agistment can help reduce workload and feed costs.

There are economic, labour, mental health and biosecurity considerations to factor in. So let's consider some important biosecurity tips.

Be sure to enquire about any disease risks on a property, such as Johne’s disease, cattle ticks, paralysis ticks, Theileria and others. Ask about region-specific risks and toxic plants.

Inspect pasture quality and ensure it meets livestock needs. Discuss access to yards, veterinary services, and emergency plans for events like floods or fires.

Ensure the property has a valid PIC, LPA accreditation and a biosecurity plan. Identify residue risks such as access to contaminated sites.

Stock must comply with NLIS requirements and movement documentation. Use animal health declarations to assess risk.

Ensure livestock are fit to load. Consider transport conditions and avoid moving animals unfit for travel.

Document procedures for births, deaths and movements in NLIS.

Quarantine and monitor stock on arrival and return for at least 21 days. Watch for disease signs and seek veterinary advice if needed.

Use preventative health measures like vaccinations, parasite control, and supplementation. Monitor for diseases like Theileria, arbovirus infections, and Johne’s disease.

Nutrition is critical and conditions differ between regions. Introduced stock may need time to adapt.

Be aware of toxic plants and pasture-related issues.

Check water sources regularly and ensure safe supply.

Agistment can work well if planned properly. Take time to consider biosecurity and animal health.

Local Land Services can assist with advice.

Thank you.

Thank you. If anyone has questions, please place them in the Q and A.

Do you give advice on PIC allocation or amalgamation or refer to Local Land Services.

So in NSW you apply through Local Land Services and it’s assessed case by case.

Hi Sarah, how can a landholder or agistee cover themselves in the event of flood or fire that leads to livestock losses.

The landowner will have insurance but natural disasters may not be covered. It depends on the policy. It’s best to speak to your insurance broker.

If anyone else has questions, please ask. Otherwise, please complete the feedback form.

Thank you for attending the second webinar in our Agistment in Focus series. This session was recorded so you can view it again. I hope you all have a great evening.