We are a month past the shortest day, and over halfway through winter, and while many areas are still waiting for runoff to refill water storages thoughts will be turning to spring grass growth. Meat and Livestock Australia (MLA) have a new indicator it will be worth keeping track of as we hopefully move to a southern rebuild.
There is a sense that female cattle will become expensive if
the season turns somewhat towards normal, and water and grass supplies
replenish in the south. MLA’s new Feeder
Heifer Indicator gives an insight into the value put on female cattle.
Feeder Heifers are obviously not a direct indication of the
demand for heifers to go back into the herd.
However, young heifers will be held in a rebuilding phase, and
restockers will bid on them in the yards, supporting prices. As such, feeder heifers are a reasonable
proxy.
MLA are also producing a restocker heifer indicator, which will
generally be lighter than the feeders.
Figure 1 shows the two restocker indicators for the last year. Both have been edging higher, from relatively
low levels. Interestingly, feeder
heifers are almost always at a premium to restocker heifer, at least for the
last twelve months.
We have some history for feeder heifers, drawn from
background data, which somewhat debunks the theory that feeder heifers should
close the discount on feeder steers during a rebuild.
Figure 2 shows National Feeder indicators for both steers
and heifers. At the height of the rebuild
in late 2021 Feeder heifers were at a larger-than-normal discount to
steers. The narrowest point was on the
way up.
Figure 3 shows the National Feeder Heifer and the Eastern
Young Cattle Indicator (EYCI). The EYCI
includes feeder heifers, and they always trade at a discount. The peak discount was at the height of the
rebuild, as light cattle were commanding a huge premium.
If the season cooperates, there is upside in all cattle
types, but it’s the lighter end, steers or heifers, which will have the
strongest gains.
What does it mean?
Based on saleyard data, those looking for a trade should be concentrating on light cattle, as is usually the case when they are discounted or at a similar price to feeders. There doesn’t appear to be a huge push towards male or female, unless there is an intention to join and sell in calf, which is where some good premium may lie over the coming year.
Key Points
- Heifer prices are edging higher; with expectation they will move closer to steers.
- In the past feeder heifers maintained a discount to steers even at peaks.
- Light cattle hold the most upside, if the season replenishes southern feed and water supplies.
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: MLA, Mecardo
