There’s been a sharp correction in feeder steer values in Queensland over the past fortnight, with some offers back about 10 percent or 40c/kg from where they sat back in February.

One of the nation’s largest feeders of 100-day cattle has adjusted their paddock sale flatback heavy feeder steer 350-500kg rates back to 410c/kg liveweight this week, back from 450-460c/kg only two or three weeks ago.

Another major multi-site Queensland feeder told Beef Central this morning its rate on heavy feeder steer was still at 430c/kg, but it was ‘reviewing current rates’ later today.

General dry conditions heading into winter across large parts of Queensland has lifted supply of feeders in recent weeks as cattle start moving, but another underlying factor in the decline is the serious lack of profitability in feeding 100-day cattle, Beef Central was told.

“The current market is still pretty good, and it’s making the sell decision easier for those producers who are coming under seasonal pressure,” one contact said.

Dalby and Roma store sales this week also showed evidence of the decline, with heavy feeders back 20-30c/kg on rates from late February, selling for 420-425c/kg, down from 445-450c a fortnight ago. While there are still some bids in the market at 420c/kg today, some Queensland supply channels have now dropped close to 10pc in value on feeders.

Black cattle values are holding up better, because availability was less impacted by the weather in those sourcing areas further south. Angus feeders milk tooth in southern Queensland were still trading around 465-470c this week. “And everyone has an Angus brand program, so the demand side is stronger,” one contact said.

“There appears to be plenty of feeders about – we can’t take another beast at one of our major Downs feedlots until the third week of April,” one supply chain manager said. “It’s being driven by lack of demand at the meat end.”

One the sell side, 100-day grainfed ox prices have also retracted in the past fortnight, with some grainfed spot market quotes for 0-2 teeth this week back to 650c/kg carcase weight, down 30c/kg. Forward contract finished 100-day cattle for June delivery in southern Queensland plants have come back to around 680-690c/kg, back from 700-720c earlier. Cattle locked into program business were better protected.

That’s been influenced mostly by the widely reported challenges in selling high-priced Australian beef into an increasingly competitive international market. An A$ approaching US80c has also contributed.

Export beef trading is proving difficult, given the relatively cheap supplies available out of North and South America, and there is mounting evidence of product being pushed back onto the domestic market.

“The pain is just so severe in the feeding business currently, that the feeder price just had to come back,” one large grainfed supply chain manager said this morning.

While Queensland is bearing the brunt of the declines, some intel out of Victoria is suggesting the heavy feeder market there has actually firmed a little over the same period. That follows the recent slaughter cattle pricing trend in the south.

Supply remains tight across NSW, and feeder prices in that state are showing only a slight softening trend, if any.

Good British-bred heavy feeder steers in NSW were this week making 430-440c, one NSW grainfed supply chain manager said.

‘Commodity-type’ 100-day Brahman cross feeders in Queensland had been making similar money up to a few weeks ago, but appeared to be ‘far too dear,’ given what the meat was worth, he said.

Big disparity

Already, some relatively cheaper Queensland feeders – especially heifers – are starting to drift south of the border, the supply chain manager said.

“Supply of cattle in NSW is still really tight, but again, lotfeeders and grainfed end-users (like supermarkets and export customers) are looking for corrections,” he said.

“There’s no doubt that NSW feeders are only at the price levels they area, because there aren’t a lot about. A 15-20c/kg price differential is easily enough to encourage purchasing of more abundant feeders out of Queensland, given the freight differential – and currently the difference on some heifers is up to 30c/kg.”

“If it (feeder prices) comes back in Queensland, it will bring NSW prices back also, and potentially, pretty quickly,” he said.

Big premium for straightbred heifers among restockers

One feature of the market that was clearly apparent in NSW at present was the huge disparity in price between ‘true-to-type’ straightbred  (i.e. British breeds, including Angus, Hereford or Shorthorn) breeder replacements – in high demand among restockers – and crossbred heifers considered less desirable for breeding purposes.

“British straightbred heifers are still making extremely big money in the restocker market. A lot of feedlots now are looking to buy the crossbred types, which are (somewhat) closer to the value that feedlots need to be buying at for domestic programs, to make the sums add up.”

Asked how big that straightbred ‘premium’ was in NSW at present, he suggested it might be as high as 50-80c/kg, for the cattle going to breeders.

Straightbred heifers were ranging close to 500c/kg, while the less sought-after crossbred heifers were between about 410c and 450c/kg.

One large NSW feedlot feeding a lot of domestic cattle is now purchasing ‘virtually 100 percent’ crossbred heifer types, that did not have the same ‘restocker appeal’ for breeding.

“There is enormous bias towards that straightbred female in the restocker market,” he said.

One supply chain manager said the value of northern feeder heifers might be coming under greater pressure because Australian Country Choice – previously a major feeder of heifers for the Coles program – was changing its business model.

• NLRS’s feeder steer indicator, generated from eligible cattle in all NLRS-reported saleyards in NSW, Victoria, SA and Queensland, was quoted yesterday at 445.5c/kg, down 19c/kg on this time last month. Larger falls in the Queensland reported sales may have been countervailed by less significant NSW/VIC price changes. The continued strength of the southern feeder market may have somewhat masked the decline being seen further north, one stakeholder said.  The NLRS weekly feeder cattle report for the week ended 5 March is due out today, but had not yet been issued by the time this report was compiled.