Premium for young females disappears again in market trend

Unusual trends are playing out in markets as the fallout from the patchy season and limited rainfall continues to influence saleyard results.

At the moment the difference between steer and heifer prices is quite exaggerated. Picture: File

Some unusual trends are playing out in markets as the fallout from the patchy season and limited rainfall continues to influence saleyard results.

In the cattle market the price for heifers being sold back to restockers has eroded down to cow-price level, which hasn’t been seen since the spring crash of livestock values a year ago.

When comparing the average prime market price for cows to the average value for young heifers, figures show how the usual premium for young females has disappeared again.

At the start of this week, the national saleyard indicator for restocking heifers was 265c/kg liveweight to actually be behind the cow average price of 270c/kg.

A few things are at play, including strong export demand for grinding beef which has kept a solid floor in the market for slaughter cows, while the tight season has impacted restocking demand.

The other tell from subdued heifer prices is the herd is at maturity, according to Meat and Livestock Australia senior market analyst Erin Lukey:

“Prices are leaning towards a market that is not desperate for future breeding females as stocks (cattle numbers) on farm remain high,” she said.

As a trading option heifers are never quite as popular as steers, and a deeper analysis shows prices for young steers have been tracking 22 per cent to 38 per cent higher than heifers across the first 10-months of saleyard results this year.

At the moment the difference between steer and heifer prices is quite exaggerated, as shown by the latest AuctionsPlus results.

Last week online young steers in the 200-280kg liveweight weight bracket averaged 426c/kg liveweight or $1026 a head, according to AuctionsPlus data. Price results for heifers in the same weight bracket was an average of 310c/kg or $760.

The suggestion by AuctionsPlus was restockers were factoring in a lot of caution towards young heifers and breeding females in general.

“Clearance rates for heifers and PTIC heifers generally receded compared to the previous week, reflecting a more cautious stance among purchasers in these categories,” it noted in its sales update.

“This has continued the trend of the perceived lack of confidence in the upcoming season, where any cattle that require a longer term commitment are still struggling.”

As a trading option, heifers do look to offer some value at current subdued rates and with the industry on the cusp of the early weaner sales when well-bred lines start to appear, they could be worth some consideration.

The other unusual event in the market last week, also linked to the season, was export processor Fletchers International from Dubbo, NSW, stepping into the specialist first-cross ewe market at Bendigo and purchasing a few hundred shorn ewe lambs.

It is a rare event, as usually processors leave these specially bred and prepared stock for farmers as replacement breeders. Auctioneer for McKeon McGregor, Alex Collins, said he couldn’t recall a processor being so active at the Blue Ribbon Bendigo first-cross event.

“I can’t recall it at my time at these yards (since the Bendigo saleyards moved to the Huntly site) and it just shows the real shortage of quality heavy lambs at the moment,” he said.

The overriding trend out of all sales at the moment is any better presented stock with weight and condition are outselling the plainer store types. The price difference does put feeding on the table as an option to get lambs up to the heavier categories, and also to elevate cattle returns.