Markets

Record prices for young cattle luring previously unseen vendors to market

Jon Condon, 10/11/2020

TopX Gracemere’s Brad Mulvihill with a line of Droughtmaster weaner steers 158kg that reached a record 556.2c/kg last Wednesday returning $877 a head.

EXTREME high young cattle prices have motivated some northern beef producers who normally sell their cattle as heavy feeders, boat cattle or grassfed bullocks to offload weaner cattle this year.

In numerous cases, vendors attracted to the phenomenal prices in the market have never previously sold young cattle, except perhaps in times of drought.

The Eastern Young Cattle Indicator reached a record 800c/kg dressed weight equivalent for the first time in October and the price trajectory has continued to rise as the diminished national herd and higher than average rainfall in southern states has driven a vibrant restocker market.

Statistics out of AuctionsPlus reflect the strong north-to-south flow in young cattle that’s been seen in recent months. For example interstate purchasing out of New South Wales accounted for 36pc of the large number of Queensland stock listed on AuctionsPlus during October.

TopX Rockhampton livestock agent Morgan Harris said there had been plenty of evidence of the trend being seen through weekly Gracemere store sales recently.

“For example we have a Central Queensland breeder client selling at tomorrow’s sale who normally sells all of his steers to feedlots as heavier feeders around 400-450kg – but he has 200 young Droughtmaster steers averaging 220kg plus 50 heifers in tomorrow’s Gracemere sale,” Mr Harris said.

“And he’s certainly not an isolated case – it’s happening across the board. Some of these vendors have never sold weaner cattle before.”

“We’re seeing big runs of central and north Queensland weaners in recent months that would not normally come to market for at least another 12 months, as feedlot entry weights, or put on a live export vessel.”

A lot of the young cattle passing through Gracemere sale recently were heading south, either into southern states or southern Queensland, where better rain had fallen, Mr Harris said.

“That applies particularly to the crossbred types. Not many restocker cattle are staying local at present – they are mostly travelling south, and often a long way south.”

Vendors out of the Central Queensland region were taking the opportunity to take the money and run, often at near-record prices.

Like many selling centres across eastern Australia, last week’s CQLX sale at Gracemere again saw records smashed, with Droughtmaster weaner steers from the nearby Barmoya district averaging 158kg hitting 556c/kg liveweight, to return $877/head

Spelling country after drought

Mr Harris said another motivating factor among vendors was that following last year’s drought, many clients in CQ were wanting to rest their country, and offloading young cattle (at near record prices) was providing a good opportunity to do it.

“While the season further south is now consistently good, spring rainfall up here has been patchy, at best, and a lot of people have missed out on rain so far. Recent drought is still in the back of a lot of breeders’ minds, especially those who have not yet had significant rain. The prospect to sell young cattle at tremendous prices allows them to give some country a spell.”

In the case of the 200 weaner steers TopX is selling for a client at Gracemere tomorrow, they would normally be a good 12 months older before hitting sale weights as heavy feeders or live export, Mr Harris said.

He said among southern buyers for CQ weaner steers, they tended to be ‘not too worried’ about the Brahman cow base, provided the calves had desirable sire-side genetics, either British or Euro.

“For heifers, it’s different,” he said. “Well-bred, quality Brahman heifers are continuing to go back into paddocks much further south – into restocker areas that we would not normally see for cattle carrying these genetics – and fetching big premiums as future breeders. Brahman heifers out of these yards have sold recently as far south as Albury, on the NSW/VIC border.”

“Nobody would have ever thought that possible, before this year.”

While Mr Harris agrees that the big surge in weaner sales out of the north was to some extent ‘taking cattle out of the system,’ the areas they were going into were decimated through the drought last year, he said.

“It’s probably just dispersing cattle more evenly across the country, rather than disappearing altogether. There’s plenty of producers over the (NSW) border who have nothing left, and have to restock at some point.”

NSW heavily underpinning QLD young cattle market

A large meatworks cattle buyer who sources both feeder and slaughter stock for his company said another factor in recent weaner sales was the feed availability situation in large parts of Queensland, versus southern states, with northern producers looking to lighten off in the absence of rain so far this spring.

“A lot of Queensland producers are doing the same thing. If you took the southern (NSW/VIC) buying influence out of the equation, I think the Queensland market for young cattle would drop 20pc overnight,” he said.

“But to buy a restocker steer at say, 240kg, and take him through to feedlot entry weights by say, the end of March next year, even if they sold them at current +$4/kg levels for flatback feeders, there is bugger-all in them.”

“For those Queensland producers who have had some rain, I think many have done their sums, and may elect to just ‘let some grass grow,’ instead of stepping back into the market at current rates,” he said.

“They may buy a few cattle later in the summer if they have to, but at the moment, many cannot see any financial advantage in buying into very expensive young cattle, instead deciding that its time to give their country a rest.”

He said the relocation of so many young cattle further south onto better feed could push their turnoff period forward, into the first half of next year.

“The southern people who are buying them are paying astronomical money for them. They’ll all want to recoup their money sooner, rather than later, and many are likely to want to sell in March or April, rather than August or September next year.

“If they are putting on 1.2 or 1.3kg a day on good southern feed, they’ll get to market weight a lot sooner than if they had stayed on a place in central or North Queensland. It could condense and distort supply considerably next year.”

The southern relocation of so many weaner cattle could also push them beyond the reach of live export buyers, when they add weight next year, he said.

 

 

 

 

 

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