The cattle market is experiencing a throwback year, one where late winter sees prices rally strongly in anticipation of spring growth. This has led to a request for a look at young cattle trading margins, with store cattle suddenly getting expensive.
When we say suddenly, the potential for price rises in the young cattle market has been building for some time. Figure 1 shows that since recovering from the doldrums of spring and summer of 2023–24, young cattle prices have been relatively steady. When compared to the volatility of 2019–2024, young cattle prices in 2024 and the first half of 2025 have been exceptionally steady.
Steady prices mean supply is meeting demand, but with the drawdown in the southern breeding flock there was always going to be a point where supply weakened, and sustained demand drove prices higher. This point arrived in mid-July, and it has seen young cattle prices gain 20%. Total gains for young cattle since January equate to 36%, and it remains to be seen if the rally is finished.
Last week, weaner steers made up close to 25% of Meat and Livestock Australia’s ‘Online Young Cattle Indicator’ (OYCI), at an average price of 547.60¢/kg lwt. We’ll use 550¢/kg lwt as a starting point for our trade.
Feeder and finished cattle prices have also rallied in the last month, but to a lesser extent. The NSW Feeder Steer Indicator (Figure 2) has gained 13% since mid-July but has had a gradual climb in the year to July, the total gain now at 40%.
We can see in Figure 2 that the peak feeder steer price back in 2022 was around 575¢/kg lwt. Current feeder prices are within 15% of the peak, so it’s not far away. We should note, however, that the benchmark beef export price, the 90CL Frozen Cow Indicator, is 200¢ higher than it was in 2022.
Figure 3 shows a basic trading budget for buying weaners now and selling feeders at various prices in four to six months, or however long it takes to get them to weight. We can see why young cattle prices are on the move. The margins on trading young stock are good at these higher feeder prices, when weaner buy values are not too far above the feeder price. In 2022, grass fever drove weaner prices to 750¢/kg lwt, a 180¢ premium to feeder values.
Note that this trade calculation does not include feed, freight, treatments, or administrative costs. These will differ between enterprises and should be assessed individually when considering any trade.
What does it mean?
Despite the recent rally, young cattle values still look relatively cheap, and if there is spring rain in the south, it looks like the current 550¢ will look very cheap. Obviously, a lot depends on having grass to feed cattle, as hay is not an option to supplement at the moment, but might be come November.
Key Points
- Young cattle prices have rallied strongly in July and August, after being static for over 12 months.
- Feeder cattle prices are also rising, but are still within 10% of weaner prices.
- Trading margins on buying young cattle still look good, despite price rises.
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Data sources: MLA, Mecardo
