Price frenzy: Producers steel themselves for hot cattle prices

As each store cattle sale rolls around, price expectations are soaring with it. But how long can these strong price trends last?

Agent 'Rowdy' Purcell, Corcoran Parker at Mansfield, looks over the first pen of heavy steers at Wangaratta store cattle sale in August. Picture: Jenny Kelly.

CATTLE  prices are steaming on, driven by booming spring pastures and a resurgence of feedlot interest.

As each store sale rolls around, price expectations are soaring with it.

But nervousness is apparent, with many agents and producers questioning the chances of making a margin on store cattle bought at this spring’s high rates.

The Eastern Young Cattle Indicator has stabilised, sitting at 786c/kg cwt on Tuesday, 2c/kg easier than seven days earlier.

At Myrtleford last week the store sale produced an average of $1840, including a strong line of cows and calves that peaked at $3510 for 12 Hereford cows, rejoined to Angus, with autumn calves and heavy steers made $2090.

At Ballarat, feedlots dominated, pushing out smaller producers. Heavy steers weighing between 520kg and 640kg returned 385-430c/kg while steers weighing 350kg to 450kg made 420c/kg to 490c/kg.

Lighter cattle made 490c/kg and up to 540c/kg, including a pen of 10 Angus steers at 278kg that made $1500 or 539c/kg.

The heifer market was equally strong with 400kg heifers almost matching the steers.

And at Casterton on Monday, a hot market had almost a sober mood, as buyers shelled out the big money for cattle but many questioned the ­future margins.

The average for the 666 steers and heifers — which ­included some top quality, well-bred lines and others that had done it tougher — was $1513 or 438c/kg.

Hereford steers weighing 580kg topped the day at $2256, or 389c/kg, while a pen of eight Angus steers, 460kg, fetched 438c/kg or $2014.

Buying agent Darren Maney, Thomas Degaris & Clarkson, Penola, South Australia, said prices climbed at every sale.

“These prices are feed-­driven, the South East and Western District have never looked so good in October,” Mr Maney said.

When asked if the prices were making buyers reluctant to bid, he said he believed strong rates would continue into weaner sales.

“It is madness, but there is a supply chain that needs to be supplied; you can’t have a lolly shop without lollies,” he said.

Selling at Casterton, Owen Edge, Phoines, had surplus 12-13-month-old Murray Grey heifers make $1517 or 444c/kg for 12 greys weighing 341kg.

Mr Edge said he was not confident prices would hold. “When the rainfall stops I think the prices will come back,” he said.

Meat and Livestock Australia analyst Penny Graham said the quality of young cattle was starting to slip, despite prices.

Ms Graham said restockers were trading at a premium of 103c/kg to processors, and 75c/kg to feeders. “It is unusual, but not for 2020,” she said.

“Historically, that gap hasn’t been as high.”

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