From 2019 to 2022, the average price of Angus bulls sold at auction in Australia more than doubled, with the main driver being the surplus cash enjoyed by producers Australia-wide. But are bigger spends on genetics the best use of windfall profits in a commercial beef breeding enterprise?
In self-replacing herds, genetic gain is permanent and cumulative with the greatest effect achieved in herds with high rates of heifer retention. It’s essential that breeders get their genetics strategy right. Breeders need to have a consistent breeding objective and implement it with every sire purchase.
However, it’s important to recognise that genetic progress is the long-game in any beef breeding enterprise. Breeders won’t improve short-term profitability by ramping up their spend at a bull sale. If the herd is not self-replacing, or retains only a small percentage of replacement heifers, the impact of a better sire is marginal. Also, the difference in contribution to enterprise profitability between a good bull and elite bull is typically less than the extra investment required to purchase it.
Breeders should consider investing windfall profits into their pasture-base or make capital improvements to improve their resilience in the next poor season. Increased pasture productivity is likely to generate more profit to a beef business than an elite sire will.