For those following, or indeed trading in, the southern beef cattle market, the first fortnight of the year is one which creates plenty of content. When the market finished 2020 historically high, there was plenty of anticipation for the opening weaner sales of 2021 as to which direction prices would head. And while most expected strength, we think even those with plenty of confidence would have been pleasantly surprised by the red-hot sales held so far. Unless of course, you were a buyer trying to secure calves at a certain price point with plenty of margin in fattening them - in which case odds are your paddocks are probably still empty, and you may have started to scout around for some more sheep to eat the summer feed.
There were reportedly more than 60,000 young cattle sold across Victoria and southern South Australia last week, and yet the Eastern Young Cattle Indicator opened the year on a new high of 830.75¢/kg. It’s since eclipsed that record again, and closed yesterday’s trading at 840¢/kg. This is a rise of 327¢/kg on the same day in 2020. We looked at the sort of margins this money could offer last week (view article here) but to give a quick insight, the heavy steer price of 371.50¢/kg (carcass weight) is only trading at 94.50¢/kg higher than the same time last year.
Heifer prices have been no slouch so far this year either, with AuctionsPlus setting a new heifer price record for their online platform at 815¢/kg. Of course, this was for a pen of Angus-cross calves (three months) weighing just 86kg, so not comparable to most. But a 98 per cent clearance, and a line of 322kg Murray Greys making to 522¢/kg is nothing to sneeze at. Reports of heifers selling for up to 500¢/kg weren’t uncommon at the physical sales, with averages around the 450¢/kg mark for those above 350kg, and 470¢/kg for lighter lots. But this could still offer value to those restockers thinking long-term. At $1500 for joinable lots, it could still be one of the most affordable – and accessible – ways to rebuild female numbers for now.
What does it mean?
It means plenty of people have missed out on using their excess grass to trade cattle so far this year, which could see the strong competition prolonged, offering continued support for prices in the near future. Team this with tightening supply – Meat and Livestock Australia estimates total cattle slaughter to be down 18% for 2020, and forecasts further decrease in 2021 – and it’s all coming up roses for those with plenty of cattle already in the paddock. No doubt the price disparity between young and finished cattle will start to bite, as Australian prices can’t stay out of kilter with global returns in the long term, but there’s likely still time to make money from beef in the meantime.
Key Points
- Eastern Young Cattle Indicator hits new high of 840¢/kg on the back of record high southern weaner sales.
- Heifers hot property as restockers compete to ramp up herd rebuild in Victoria and NSW.
- Young cattle supply will begin to tighten, increasing competition for those still looking to load trucks.
Click on figure to expand
Click on figure to expand
Data sources: ICS, Mecardo
