Feedlots drive up steer prices while confident producers nab heifers

Buyers have paid on average more than $10/kg for young cattle for the first time ever in early sales this week.

Producers are now more confident in the longer-term future of the industry and are buying heifers to join, instead of looking for a quick-fix to boost their herd numbers. Picture: Dannika Bonser.

Young steer prices have been driven up again this week as feedlots step-up buying to match it with restockers.

Seeking surety of supply, feedlots helped drive a resurgence in the Eastern Young Cattle Indicator, kicking it back up to 1023c/kg on Monday after it dipped below the new benchmark of 1000c/kg for a couple of days last week.

At the same time, young, unjoined heifers have also been in hot demand as confident breeders chose them over their pregnancy-tested-in-calf sisters; usually the more keenly sought-after category.

According to the National Livestock Reporting Service Monday’s sales recorded — for the first time ever ——a trend where the price point for feedlot cattle lifted above an average cost of 1000c/kg carcass weight equivalent. Previously, such money had only been recorded for young cattle selling to restockers within EYCI-recorded saleyards.

It followed a surge in demand by feedlots for numbers at Wagga Wagga in the NSW Riverina, with prices spiking by up to 20c/kg for steers, which averaged 569c/kg.

Thomas Elder Markets analyst Matt Dalgleish said the good season continued to drive restocker demand, while the Dubbo saleyard’s temporary shutdown last week due to a Covid-19 outbreak, had also decreased supply.

Meanwhile, AuctionsPlus analyst Tim McRae said that platform saw powerful demand for unjoined heifers last week with almost a total clearance. In comparison, PTIC clearances and prices fell, he said.

Unjoined heifers, 340-400kg, on AuctionsPlus averaged $2080 while PTIC heifers online fetched only marginally more at an average of $2500.

This was reflective of confidence among producers who, thanks to the good season and ongoing tight supplies, were now prepared to be patient to rebuild herds instead of “taking the quick option”.

“I think people are looking at the prices for young heifers — they still aren’t cheap, nothing is at the moment — but they might have purchased some bulls recently, so they want to retain the control over the breeding and are happy to wait a bit longer (to get a calf),” Mr McRae said.

Mr McRae said the EYCI had “bounced nicely”.

“I don’t think buyers can resist and I don’t think there is much of an upper limit in what people are prepared to pay, they are just saying, ‘get them for me’.”

“And that really isn’t a factor that we have seen before.”

On international markets, Global Agritrends analyst Simon Quilty said Brazil exporters and traders were confident that normal trade with China would resume around September 19. This followed the discovery of two atypical cases of mad cow in Brazil.