Conditioned cattle demand premium

Beef Central, 21/11/2014

Over the past two years conditioned cattle in the eastern states (C3 condition score) received a 12¢/kg lwt premium over those with slightly less finish (C2 condition score), as restockers withdrew from the physical market, while processor demand for quality slaughter cattle remained relatively strong.

From the beginning of 2010 up until September 2012, C3 yearlings and vealers received an average 1¢/kg lwt premium compared to C2’s. During times of herd rebuilding, this premium actually reversed, as restockers competed in the market for young cattle – during the first half of 2011 and 2012 C2’s received a 1-1.5¢/kg lwt premium over C3’s.

However, as dry conditions set in throughout 2013 and 2014, restockers had limited capacity for herd rebuilding or backgrounding.

Subsequently, the premium for young fat cattle increased to about 12¢ and at times was as high as 20¢/kg lwt.

In recent months, as feedlots have increased saleyard purchases, the premium of C3 young cattle over C2’s has reverted back towards zero and during the first three weeks of November the premium was reduced to about 5¢/kg lwt. Currently, the average price for C3’s is 171¢/kg cwt, while C2’s this week averaged 168¢/kg cwt.

Source: Meat & Livestock Australia


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