Supply-demand likely to favour calf rearers, making forward contracts a worthwhile option.

With values around livestock at present, anyone seeking to rear calves this year should be in for a rewarding season. However, to maximise on-sell values, lining up a forward contract is worth considering.

Calf sales will start in Northland and Waikato in early July, following on through the rest of the North Island as the winter proceeds. South Island dairy farmers tend to favour on farm selling. Through the coming weeks calf rearers will purchase Friesian bulls and dairy beef bulls and heifers. Most will raise them with the aim to sell them on when they reach 100 kilograms. 

For anyone looking to rear calves, identifying and signing up a buyer early on can be a sound strategy. Backing up the initial purchase with an agreement to on-sell can pay dividends. In past years, depending on what the market is doing, commitment from buyers willing to uplift weaners from the rearer when they reach the desired weight is a good way to ensure certainty around future margins.

This year, with demand set to exceed supply, calf rearers looking to maximise advantage may find the best way to do so is by establishing a forward contract.

Contact your local livestock representative to discuss how best to make the most of your calves when the weaner market comes around in the late spring and summer. Finding a buyer now, willing to make a commitment ahead of time, can benefit both parties.