Premium market segments maintain their price difference, despite record cattle values

Jon Condon, 05/08/2016

DESPITE the blistering prices being paid for all slaughter cattle across Australia over the past six months, premium market segments looking for special features are, by and large, managing to maintain their traditional margins over the commodity market.

Ekka cattle judgingWith thousands of beef producers flocking to Brisbane for this week’s Royal Queensland show, it presented a good opportunity for Beef Central to ‘sniff the wind’ on how specialised market segments are performing, price wise.

One of Queensland’s largest Certified Organic beef producers, consigning his first fully-certified organic cattle over the past year, told us yesterday he was currently receiving an unbelievable 710c for Certified Organic steer on a flat rate, with no grid discounts applied on bruising, meat colour fatness or other criteria.

That prices a 300kg carcase weight Organic steer carcase at $2130.

His entire certified organic cattle turnoff for the 12-months to June 30 – including large runs of light cows – averaged well over $2000 a head.

Here’s what we learned around the Brisbane Ekka judging rings yesterday about current pricing on ‘special’ cattle entering domestic and export supply chains in the current market:

Certified Organic

710c/kg is available from some supply chain managers, with no grid discounts applied. Prices as high as 750c/kg appear on other grids, but conventional discount penalties apply.


pcas-certified_pasturefedSteers eligible for the Pasturefed Cattle Assurance System this week through the program’s dominant user, Teys Australia, are making 640c/kg. That’s a clear 65c/kg difference over the Teys Beenleigh ‘generic’ grassfed heavy steer price this week, itself at a record 575c/kg.

Apply that premium over a typical 300kg carcase, and the advantage is worth an additional $195 a head to PCAS suppliers – on top of what is already a super-heated grassfed slaughter market.

EU grassfed

EU grassfed steer is perhaps the segment that has suffered most in the big price shift seen this year. One large multi-site processor’s EU grassfed grid is currently +10c above conventional grassfed steer – considerably less than the +25c seen at other times through the year. Historically, the EU premium waxes and wanes during the annual production cycle.

Supermarket contracts

Supermarket supply chains are perhaps the stand-outs at present, driven by the need to maintain supply into domestic markets, where export processors can adjust their kills a little more flexibly.

A Woolworths contract holder at the Ekka yesterday told Beef Central his business is currently receiving an unheard-of 635c/kg for forward contract 70-day grainfed steer, 625c for heifers.

That’s against a conventional 70-day grainfed spot market steer rate this week (0-2 teeth, 280kg+) of 585c. Add 5-10c/kg to that for MSA steer at present, depending on the location.

Coles, given its no-HGP policy, is understood to be 10c/kg above the Woolworths price, with one quote offered yesterday around the judging ring at a phenomenal 650c/kg for steer.  Spot price for top-up kills this week for Coles northern supply chain is 630c steer, 620c heifer, Beef Central was told yesterday. It should be pointed out that both major supermarkets have specs considerably tighter than the generic grainfed YG steer/heifer price.

Breed-based premiums

Premiums paid for cattle eligible for Angus-based brand programs continue to be about +5 to +10c/kg in most grids, over and above the MSA steer price. JBS’s new Thousand Guineas Shorthorn program has at times in the recent past paid an additional 5-10c/kg over and above the Angus premium – but it applies at this point to only small numbers.


Wagyu backgrounders top 705c/kg liveweight

While this article focusses on slaughter cattle, we could not resist the opportunity to flag to readers a progress report on a line of Wagyu x Angus F1 backgrounder steers being offered on AuctionsPlus this morning. At the time this report was being compiled, the sale was still in progress, but the 198kg steers, 7-9 months, being offered out of Bellbrook, NSW, were the subject of a bid of 708.5c/kg liveweight. It’s the first time in history any cattle on AuctionsPlus have broken through the 700c/kg barrier. They will also have a considerable freight bill attached, of they are ultimately knocked down to the current highest bidder from Victoria.

Full details in this week’s AuctionsPlus weekly report, published tomorrow.




Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Beef Central's news headlines emailed to you -