Widespread Covid-19 restrictions in 2020 saw producers look at alternate methods of marketing their stock to the traditional physical saleyard, creating a surge in buyers and sellers entering digital marketplaces. Yardings figures from AuctionsPlus indicate that the digital space has capitalized on that momentum, with cattle volumes again growing strongly in FY2020/21.
AuctionsPlus recently released a detailed report on the marketplace’s throughput figures, with a headline figure of cattle yardings for 2020/21 showing overall national growth of 27% compared to the prior financial year (figure 1).
While throughput growth in cattle yardings on AuctionsPlus this financial year was only half of that achieved in 2019/20, a 27% increase off a considerably higher base, still indicates that the digital sales channel in Australia is rapidly gaining acceptance and popularity. In terms of number of head yarded, Cattle yardings grew by 216K in 2019/20, with 2020/21 only 20% of the prior year’s Covid fuelled growth, at a solid 175K increase.
Drilling down further into the throughput data, QLD showed the strongest growth in the number of head listed, up 94K, or 49% growth. QLD producer uptake has been so strong because not only do most of Australia’s cattle herd reside in QLD, but also because parts of the state have experienced dry conditions over the past year, encouraging producers to move their cattle on to greener pastures.
In contrast, NSW yardings stagnated, showing minimal overall growth of just 3%, dragged down by a 44% reduction in numbers listed from the central-western region.
AuctionsPlus is largely a store cattle market, with only a small minority of listings being purchased by processors. Yardings are dominated by yearling steers and heifers, which made up 64% of 2020/21 yardings (figure 2). However, roughly 60% of 2020/21’s total growth was driven by listings of Pregnancy Tested in Calf (PTIC) and Calf At Foot (CAF) offerings, which collectively represented 32% of total yardings for the year.
Like with any market, as the amount of participants increases, the more attractive, and valuable it becomes, this is referred to as the network effect. As AuctionsPlus has grown in the amount of cattle throughput it handles, this has attracted more buyers, including large-scale purchasers. For example, feedlot buyers in southern QLD were very active in the past year, picking up 125k head and representing 15% of total cattle yardings on the platform.
As a result, the clearance rate has increased from 81% in 2019/20 to 83% in 2020/21, up substantially from 68% in 2018/19. However, when looking at these numbers, one has to remember that 2018/19 was a drought year, when supply of cattle was a lot higher and demand was lower (figure 3).
What does it mean?
Producers and buyers alike have continued to be attracted to trading cattle in the digital space, providing them with convenience and potentially a geographically wider range of buyers and sellers across the country. Continued strong growth in the number of head listed on AuctionPlus since the beginning of Covid-19 related lockdowns indicates that this method of selling is likely to continue to grow in size and influence on the market in future years.
Key Points
- AuctionsPlus Cattle Yardings up 27% for 2020/21.
- QLD throughput up 58% due to dry conditions in areas of the state.
- PTIC and CAF listings important driver of AuctionsPlus growth in 2020/21.
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Click on figure to expand
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Data sources: AuctionsPlus, Mecardo
