Lighter steers the best rise, but it’s all good

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The Western Victorian Weaner Sales are still going, and the results have been very strong as expected. Northern buyers bought large swathes of cattle that were on offer, and while we’ve heard all the headline numbers, here we delve a little deeper into the numbers.

Firstly, we need to say that all the prices quoted here are rough averages for Angus Weaner Steers, but pretty close to the mark.  As usual, prices fluctuated with breeding and pen size, but we’ve tried to pull out numbers related to good-sized lines of well-bred cattle.

Figure 1 shows how prices of cattle across a range of weights compare to the January sales of the last two years.  The drought of 2020 saw January weaners priced at basically steady cents per kilo regardless of weight.  In drought, expensive feed means extra kilograms cost more to gain, so weaner producers were rewarded handsomely for heavier steers. 

In 2021 and 2022 the shape of the price curve returned to normal, with lighter steers commanding a very solid premium over the heavier end.  When feed is abundant and cheap, backgrounders are prepared to pay more c/kg for lighter steers, as the margin between buy and sell is greater.  There weren’t many 250kg steers on offer this year, but those that were commanded over 800¢.

When we look at prices in dollars per head, in figure 2, we can see just how much more money weaner producers are making this year.  Compared to last year weaners made between $620 (at the lighter end) and $810 per head more this year.  Interestingly, compared to 2020 cattle were all in the $1200-1300 per head stronger range.

In percentage terms, it is obviously lighter cattle which have gained the most.  Since 2020 the 250kg calves have gained 165%, while the 450 kg cattle are up 82%.

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What does it mean?

Whether there is money to be made from expensive weaners remains to be seen, but there is plenty of confidence in the market.  The difference of nearly $700 per head between the 250kg steers and the 450kg ones is a great trading margin in most years.

The problem with prices being at stratospheric levels is that prices become very volatile.  A fall of 100¢/kg wipes a lot of value off the heavier end of feeders, and makes the trade marginal.

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Key Points

  • The Western Victorian Weaner Sales were extremely strong as expected.
  • All weights of cattle saw price rises, but in dollars per head the heavier end achieved more.
  • Extreme prices bring volatility but confidence in the market is strong.

Click on figure to expand

Click on figure to expand

Data sources: MLA, ABS, DAWE

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