Herd recovery? Many heifers still going to slaughter market

James Nason, 12/09/2016

Despite the reported focus on herd rebuilding, large numbers of heifers are still flowing into feedlots destined for meat processing, instead of into paddocks for joining this spring.

Quality heifers like these MSA-eligible Droughtmasters, continue tofind their way into slaughter markets, despite the desperate shortage of breeder replacements

Quality heifers like these MSA-eligible maidens, continue to find their way into slaughter markets, despite the desperate shortage of breeder replacements

Lotfeeders are outgunning restockers in the market for empty heifers, with many producers still reluctant at current high prices to buy unmated heifers, given the long “lag time” until that purchase can deliver a return, some two to three years away.

Also not all restockers have yet received the seasonal break they would need to confidently commit to unmated heifers as long-term breeder replacements.

One regular feedlot cattle buyer told Beef Central privately last week that if anything, the demand for heifers as feeders or to process for the domestic grassfed market had grown in relative terms, because of the overall lack of feeder/slaughter cattle available.

Supermarket grid prices for contract-fed heifers meeting the no-HGP specification are currently around 620-640c/kg dressed weight.

Cows and calves or PTIC (pregnancy tested in calf) females looked a lot more attractive to many post-drought restockers at current prices because of the faster rate of return, he said. This was having the effect of ‘devaluing’ the price of heifers a little at present, from a restocker’s perspective, relative to cows and calves and PTIC cows.

One stock agent on the inner Downs, who had just finished pregnancy testing 600 heifers to confirm them empty for the feedlot trade, said last week he was surprised by the lack of restocker activity on the current market.

Many producers were taking advantage of lower grain prices to either feed weaned heifers in paddocks, or negotiate short-term contracts with local feedlots to feed weaned heifers on light rations for roughly 40 days, to bring them up to either heavier feedlot entry weights or for sale into the local trade.

However, the trend could be about to change.

With perhaps another month left in the current in the current grid price cycle, when processor offers start to ease greater restocker activity on heifers is likely.

“With the break in the season, more people can see a bit of light at the end of the tunnel and will go and buy more females now,” leading Roma stock agent Rod Turner, Landmark, predicted.

“The reason they haven’t charged into heifers is because is such a long-term thing,” he explained. “It could be three years before you have got something to sell.”

Mr Turner said Roma had barely eased back in selling cows, with around 800 to 1000 per week flowing onto the market.

The faster return from cows and calves at current pricing meant they were “the best buying of anything in the yards at the moment,” he said.

“You are that far in front buying them it doesn’t matter, instead of paying 430c and 440c for little steers or 400c for little heifers, which we saw this week.”

He said everyone in the bush now knew that the cattle just aren’t there to get.

“We’re in a downturn of cattle for at least another 18 months,” he said.

“The big feedlots have done surveys on it and they reckoned they were going to be in trouble from the end of August on, and it has proved pretty right.

“Numbers are starting to get real hard to find from now.”






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