‘Worry is creeping in’: Concerns show as young heifer price dips

Heifer weaners were quoted as up to $100 a head cheaper at major store sales last week, with farmers on edge about the spring growing season.

Young heifers losing price traction is a sign farmers are on weather watch.

Heifer weaners were quoted as up to $100 a head cheaper at major store cattle sales last week, and traditionally heifers are the first segment of the market to show signs of seasonal or demand pressure.

It was quietly confirmed by agents this week who acknowledged concern was mounting over how the season could play out, with a burst of unseasonally warm weather after low winter rain putting farmers on edge about the spring growing season.

“People are starting to question what could happen if we don’t get good spring rain – the worry is creeping in and you are starting to feel it in the market,” said one agent who declined to be named.

The softer trend for heifers has been evident at multiple saleyards and online in the past several days.

AuctionsPlus noted the widening price spread between heifers and steers in its latest commentary after its main categories for heifers weighing less than 330kg dipped by $70 to $145.

“The price gap between weaner steers and heifers widened again this month, with weaner steers enjoying a 19 per cent premium over their heifer counterparts,” AuctionsPlus noted.

In dollar-a-head terms the difference was quite stark at major store sales last week as young steer and heifer pricing moved in opposite directions.

Cow prices versus yearling restocker heifers.

This was the quote for the feature Bill Wyndham special early spring sale held at Bairnsdale last Friday for Angus calves weighing in the 280-330kg weight range: steers averaged 440c/kg liveweight or $1327 and heifers averaged 271c/kg or $876. It marks a difference of $450 a head between the sexes, much greater than the usual $200 to $250 spread that exists in normal times.

The trend was repeated at the Leongatha store sale in South Gippsland last week, where young heifers were quoted as up to $100 cheaper by the National Livestock Reporting Service which tracks this regular market.

Price results for Angus weaners in the 280-330kg range sold at Leongatha were: steers an average of 462c/kg or $1464 and heifers an average of 329c/kg or $1019. It also puts the price difference in the realm of $450 between steers and heifers to match Bairnsdale.

Illustrating how undervalued heifers are in the current market is a graphic comparing the price trend line for processor cows to yearling heifers sold to restockers. This data is captured at weekly prime markets, and while the better-bred lines of young heifers are usually sold at store sales, it still shows the price pattern.

At the moment there is only a small difference of less than 20c/kg between the average price being paid by exporters for slaughter cows compared to the price being paid by farmers for yearling heifers to grow-on.

As the graphic shows, such a tight alignment of price is unusual and only tends to show up under periods of seasonal pressure – such as the peak of the last drought in 2019.

While it might be viewed as negative or “talking the market down” to be referencing concerns about spring feed, hay supplies and feed grain costs in early August, it is the currently the main talking point at markets.

Multiple regions need a good soaking rain to help boost confidence and reassure farmers the spring growing period can extend long enough for some hay production and to provide a feed wedge to carry stock through into next year.

So until then it is weather watch and heifer price watch, with the last thing the industry needs being a repeat of the emotion driven decision making which led to the shock collapse of markets this time last year.

Linked into the pressure on heifers is the suggestion from agents that many cattle breeders are well stocked with females after the herd rebuild following the last dry period, effectively reducing store demand now.

The other segment of the market to watch in reference to weather and price is the mutton market. There were signs at Bendigo this week of falling demand and rates for light sheep, with some pens of plain ewes selling for between $20 to $50 late in the auction on Monday.