Cows still good value – if you can find them.

Limousin cattle

While we watch the young cattle price reach new highs almost on a daily basis this spring, it isn’t the only indicator breaking records. All the stars continue to align for the Restocker cow market, driven by a plentiful and long-lasting spring, supported by total cattle slaughter being down close to 20% for the year-to-date (based on weekly MLA figures) and backed up by the current price for young cattle - which looks set to continue into next year’s weaner sales (more on this here).

The National Cow price reached a new weekly high a fortnight ago, averaging 661.1¢/kg carcass weight, and finished last week 19% higher year-on-year, at 657¢/kg. And it isn’t just saleyard demand for cows driving the market, with the national medium cow over the hooks price averaging 640¢/kg for October so far – the highest monthly average on record, and more than 100¢/kg higher than the same month 2020. Actually, female supply for the last quarter isn’t yet known, but you’d imagine it would have at least contracted as much

Meat and Livestock has recently done some analysis on January-September saleyard throughput, which showed that from 2018 to 2021, supply of 420kg+ cows in the yards have declined by 44%. The gross value of this throughput (based on National Livestock Reporting Service data) hasn’t been nearly as diminished however, only losing 4% over the past four years, with cows going from averaging $1014.80 in 2018 to $1727.50 in 2021.

And that’s not all back to the paddock demand, as we can see from the over-the-hook price – and the 90CL. The US grinding beef export price has outstripped the domestic cow price in the past 12 months, rising 28% to 831¢/kg Australian. This has the imported and domestic lean beef price in the US fairly closely aligned currently, despite it usually widening at this time or year, and according to Steiner a lack of product availability from Australia is a big driver of this.

What does it mean?

This time last year we noted that buying and selling cows into the same market was a good opportunity, so what about now? If you’ve got 500kg liveweight cull cows, the national indicator was at 362¢/kg yesterday, returning you $1810.  On AuctionsPlus last week you could secure station mated heifers with calves at foot for an average of $3363. That said, there were only 160 of those lots on offer. Interestingly, empty heifers with calves, of which there were 700 offered, averaged higher at $3924. Working off a current weaner price of 750¢/kg, and splitting and selling that product once the calf reaches 300kg, you’d make a very small margin of less than $100 – and that is not counting costs.

With current positivity in the cattle market looking unlikely to waiver, the money to be made is keeping those heifers on for six more calves.

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Key Points

  • National cow price keeping pace with the rising market, with both saleyard and over the hooks returns reaching new highs.
  • US export price 90CL remains at a premium, supporting domestic cow kill price.
  • Buying into young females might feel dear, but will pay off, if prices remain historically high.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources:  MLA, Mecardo

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