Wagyu F1s on feed in a southern Queensland feedyard

THERE’S been a big surge in prices for well-bred Wagyu F1 feeders over the past three months, after 12-18 months or more where F1s were worth no more, or sometimes less, than equivalent weight Angus feeders.

Major F1 grainfed supply chains in Queensland and NSW are this week quoting anywhere from 620-660c/kg for appropriately bred Wagyu x Angus F1 feeder steers, with 640-660c more representative of the current market, for delivery 6-8 weeks. Some cattle being delivered in the next week or two might still be at the lower end of that range, one large supply chain manager told Beef Central.

That’s up from prices in the mid-5s only three or four months ago – when Wagyu F1s were worth about the equivalent of Angus. On a 400kg feeder animal, the recent F1 rise is worth around $400-$450, and represents the best money seen since the blistering cattle market highs back in 2022.

Equivalent F1 feeder heifers were quoted yesterday at 590-600c/kg by several contacts. That’s for cattle of known performance, carrying desirable sire bloodlines and quality Angus maternal genetics.

Wagyu F1 steers have more or less tracked the Angus feeder price for much of the past year, maintaining some relativity as Angus prices started to rise earlier this year.

However that cycle has now changed, with F1s now perhaps 40-60c ahead of equivalent weight Angus, and likely to extend further, Beef Central was told.

Shortage-driven

Most of that F1 rise is shortage-driven, as some Angus cow herd managers who previously dabbled in F1 breeding have checked-out for a period, based on earlier price signals.

“Angus pulled up at 600-620c/kg, depending on location, and are now trending down, while the Wagyu F1s have kept going up in the past couple of months, on the back of this short supply situation,” one supply chain manager said.

“It’s moving relatively quickly,” he said. “Some yards have had to top-up pens intended for F1s with some (more expensive) F2-F4 steers, simply because of the shortage of suitable feeders.”

New England Angus herd recovery

Opinions vary, but the impact of severe drought from late last year in Wagyu F1 ‘heartland’ breeding regions in northern NSW has had a significant impact on current supply, and potentially well into next year.

And part of that story includes a clear swing back to using Angus bulls in New England and Northern Tablelands Angus herds this year, in order to rebuild decimated Angus straightbred breeder numbers. That may delay F1 breeding decisions in the affected region for a year or two until herd numbers are restored, one contact said.

A fair indicator of that trend may come in upcoming Angus and Wagyu spring bull sales happening between now and early September.

Another demand factor raised by several supply chains spoken to for this report was the trend towards fewer days on feed for F1 programs. Where once 400 days was common for F1 cattle, today there are numerous feedlots feeding only 350-360 days – for similar marbling performance. Some of that is being driven by different policies among new owners of Wagyu-oriented feedlots that have changed hands recently, Beef Central was told.

That adjustment has increased F1 stock turnover by around 12.5pc, adding to demand.

Other supply chain managers said there were some numbers of Wagyu F1s that during the New England’s desperately dry start to the year had been directed into short feed programs – simply to ‘find them a home.’

In a normal year, F1 feeder steers off crop in the New England/Northern Tablelands area start to flow forward from about now through to October, but the anticipated absence of those cattle this year is only adding to supply uncertainty, one supply chain manager said.

However he was aware of some ‘serious, bigger F1 producers’ in northern NSW who had fed young cattle on, using self-feeders or bunks, in the absence of grass or oats. One property in the region alone, is apparently currently backgrounding 5000 F1s on a roughage-based feedlot diet.

“There’s more people doing that than you might expect,” he said.

Beyond the factors described above, the Wagyu footprint within the total cattle on feed in Australia continues to grow, adding further demand pressure for F1 feeders. Some of that is from new entrants, while other parts are from existing Wagyu players growing their numbers. JBS, for example, starts a permanent weekly Wagyu kill at the company’s Beef City plant near Toowoomba in October, and is expanding kills at Riverina.

$1000 extra production cost

Another supply chain manager said with the rise being seen already in Wagyu F1 feeder prices in the past couple of months, plus the substantial lift in feedgrain prices, he was anticipating an extra $1000 in production costs per animal between now and July 2027.

“It’s yet to be seen whether our overseas Wagyu beef customers are prepared to bid up to offset that cost over the next year. While supply is going to be short, there’s going to be a limit to what this market will absorb,” he said.

Making life even harder for Wagyu F1 program managers trying to project forward the likely state of health of international meat markets as cattle going on feed today close-out in 350 or 400 days’ time have been recent developments like China’s quotas and tariffs.

While Australia’s 2027 China annual quota re-sets on 1 January, many anticipate that we will fill our entire 206,000t quota next year by late March or April. An additional 55pc tariff for the remainder of the year, on top of what is already very expensive beef, will create further trade headwinds for Wagyu beef next year, one trader said.

Volatile market segment

Historically, Wagyu F1s have been a volatile market segment among feeder cattle – soaring to incredible prices of 1000-1100c/kg back during the feverish peak in 2022, while also crashing badly during periods of over-supply.

Charlie Perry, Trent Bridge Wagyu

Charlie Perry, former Australian Wagyu Association president and director of Trent Bridge Wagyu on the NSW New England, told the recent Ballarat Feeder Steer Masterclass that it had been an “interesting 24 months” for Wagyu F1 breeders.

Illustrating his point around the need to ‘de-risk’ what is a highly volatile segment of the cattle industry (separate story to come later on Trent Bridge’s approach to that), Mr Perry presented this graph below plotting Angus (blue line) and Wagyu F1 (red line) feeder prices since 2015. Note these are saleyards prices, and potentially do not fully reflect the private transactions taking place within dedicated supply chains. Nor does the graph (constructed a month or more ago) capture the full extent of the most recent price rises.

However it clearly shows the breathtaking volatility in the F1 market versus mainstream cattle, at times falling behind equivalent Angus feeder prices (reference 2018, 2020, 2023, 2025).

Click on image for a larger view

“What happened back in 2015-16 was that some big F1 premiums emerged for Angus breeders,” Mr Perry said, referring to the graph line.

“This looks good! Angus breeders said at the time, and everybody joined Angus females to Wagyu bulls in 2017 and 2018. Lo and behold, in 2019, there were way too many Wagyu x Angus F1s on the ground, and the market collapsed,” he said.

“Wagyu bad: We’re not doing that again, they said.”

Whenever Wagyu and Angus feeders reached price parity, some people tended to abandon F1 breeding, Mr Perry said.

“What happens next? A massive rise in F1 price again, during 2021 and 2022, due to shortage. The graph suggests a peak of $11.70/kg liveweight, but it actually hit a peak of $12.50 for good F1s in 2022 – at the same time that Angus were making $6/kg.”

“As a result, everybody (F1 breeders) started using $50 notes instead of toilet paper.”

“That drove another wave of (opportunistic) F1 breeding, and what do you know? It collapsed again in 2023, back to $4.00/kg. For some people, Wagyu F1 became a very nasty experience, because they simply could not transact the cattle,” Mr Perry said.

“That’s one of the challenges with F1 breeding, more broadly. If you have an Angus feeder steer, it’s the same as having cash in your pocket – it’s a very liquid commodity. If you own a Wagyu F1, in many cases you have to have the right relationship, with the right person, at the right time.

“It can get frustrating for people. There is this lack of liquidity and these broader frustrations. We had reached that point again last year where F1s were at price parity for Angus, and then perhaps with a 10pc discount for slower growth, and people were starting to exit.

“But we are now seeing the start of the new cycle again. Over the last few weeks there have been some little 200kg F1 steers sold at 780c on AuctionsPlus. What that says to me is that we are reaching a shortage again – and the cycle starts again.”

$1.50/kg premium for F1s forecast

Speaking to independent stock and station agents attending the RMA Network Conference in Brisbane recently, analyst Simon Quilty from Global Agritrends forecast that Wagyu F1 feeder steers could move to a $1.50kg premium over Angus in the next year.

He suggested Angus feeder steers this year could get to 630c/kg, but next year would see the peak around 760c/kg in July-September.

“We’ve certainly seen Wagyu F1s struggle for the last year or two, but in recent times, the United States has started to pay a premium for Australian Wagyu marbled beef. When we start to see premiums paid for the beef overseas, it’s reflected here in Australia in cattle prices.”

“The first half of 2027 is when we see the big lift happening,” he said.

Mr Quilty told the RMA audience he had the Eastern Young Cattle Indicator hitting a whopping 1420c/kg (carcase weight equivalent) next year.