Cashed up livestock producers aren’t just spending their extra earnings on new yards, fences, or extra farmland – they are putting extra money into animal health tactics, too.
As earnings from sheepmeat and wool continue to surge, and beef values sit well above average, the improved farm cash reserves are translating into greater spending on flock and herd productivity to take full advantage of market’s strength.
Nationally, year on year veterinary medicine sales growth jumped about 10 per cent in the 12 months to June, and informal feedback suggests demand is still climbing.
Attention to ruminant health care has been particularly notable according to animal health business Virbac, which is recording double digit growth in the category.
Virbac is Australia’s fourth biggest animal health products maker, with three NSW production plants servicing 11pc of domestic farm livestock and companion animal markets.
Regional director of the company’s Australia, New Zealand and South Africa business, John Embling, attributed the sales surge to producers making the most of continuing red meat demand, and more recently the wool market’s record price run.
At highs of 1765 cents a kilogram, wool’s eastern market indicator price is roughly $4/kg up on a year ago, while lamb markets are averaging $1/kg above last December’s 550c/kg values.
Improved seasons in many areas have also boosted farm cash flow while adding to the likelihood of stock parasite outbreaks requiring treatment.
Mr Embling said new farm sector investment by corporate agribusinesses and expanding family farms could also be responsible for more spending activity.
It’s a bit of a virtuous circle – good demand and strong livestock prices are rewarding producers with better returns
“Our ruminant health products have seen good core growth, although it’s really only been noticeably higher in a relatively recent time,” he said.
“I suspect a combination of seasonal conditions and market demand for meat products is driving everybody’s productivity ambitions, but new investors may be making a bit more impact of late.
“The re-emergence of wool, plus the strength we’ve seen in lamb markets in recent years, has certainly made the national flock more valuable and encouraged investment in stock health and breeding programs.”
Willingness to spend
Executive director of the peak industry body for the animal health product sector, Ben Stapley, agreed industry feedback suggested “a willingness to spend more”.
“It’s a bit of a virtuous circle – good demand and strong livestock prices are rewarding producers with better returns,” said Mr Stapley at Animal Medicines Australia (AMA).
“Greater financial reward for their effort and stability in the market is subsequently encouraging producers to expand numbers and pay extra attention to herd and flock health and productivity to maximise the potential in their livestock, and those good prices.”
Sales in 2017 seemed particularly strong according to data from AMA members, who represent 80pc of veterinary pharmaceutical, parasite control and stock hormone product market suppliers.
In June last year annual growth was at a relatively typical 4pc, but as wool markets gained greater momentum and last year’s big spring arrived sales growth more than doubled.
About half Australia’s $1 billion annual veterinary medicine product sales are for agricultural livestock use, although farm stock absorb about 60pc of total product volumes.
“Livestock free from diseases or parasites, such as worms, grow faster, are more fertile and require less feed and water,” Mr Stapley said.
“Producers know responsible use of these products is critical to their productivity and animal welfare priorities.”
Intestinal worms alone cost the Australian sheep sector about $430 million a year according to Virbac Australia’s production animal marketing head, Ronnie Dawson.
About 80pc of that figure was attributed to reduced meat or wool production and poor lambing numbers.
New worm killer
In September Virbac launched its new Tridectin drench for sheep – a world-first broad-spectrum combination formula registered to kill triple-resistant and monepantel-resistant worms in sheep.
It targets all major worm species especially barber’s pole worm, small brown stomach worm and black scour worm with a treatment containing Moxidectin, Levamisole and Albendazole.
It can be a strategic pre-lamb or summer clean-out treatment, or used as needed, based on worm egg count results.
Mr Dawson said Tridectin’s higher kill rate would mean fewer worms and eggs, and less pasture contamination, reducing graziers’ need for increased drenching and thus cutting the chance for resistance build up.
Mr Embling said credit went to the Australian Pesticides and Veterinary Medicines Authority (APVMA) for efficiently approving Tridectin’s registration, despite the pressure the organisation was under as it relocates from Canberra to Armidale.
“We think this latest addition to the farmer’s worm control arsenal makes Australia’s agricultural and animal health industry look very encouraging indeed,” he said.
Tridectin follows in the footsteps of Virbac’s 23-year old line Cydectin, which still provides worm control options for the sheep industry.
French-owned Virbac, which has just celebrated its 30th anniversary in Australia, is the world’s eighth largest veterinary pharmaceutical company with sales worth about 1.1b euros in 2016-17.