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Restocker Market: Steer vs Heifer Premiums

24 January 2024

Key points:

  • Restocker Yearling Steer Indicator commands a premium over Restocker Yearling Heifer Indicator.
  • The Restocker Yearling Steer Premium correlates with producer confidence.
  • Producers are more optimistic about the future outlook for the market particularly for restockers.

The price premium between the Restocker Yearling Steer Indicator and Restocker Yearling Hefier Indicator has been well established and is well known. This premium mimics the naturally occurring cattle cycle and is a strong indicator of confidence in the market and potential restocker demand.

In the 2022 cattle market the price difference ranges from 10-20% over the year. In 2022, a stronger market combined with the strong weather outlook fuelled the increase in prices for all cattle indicators. The Restocker Steer Indicator is always above the heifer market, when the margins are minimal it suggests that restockers are opting for heifers, as opposed to steers, in response to skyrocketing cattle prices.

The 2023 cattle market started and ended in very different places. Coming off a very strong wet season in 2022, producers expected poorer weather conditions with El Nino depressing prices in 2023. The lowest point in the cattle market came in October 2023, resulting in a 30% premium between the restocker steer and heifer prices. This substantial price differential highlights the challenges faced by the cattle market, highlighting the prevailing preference for steers due to the premium they can command when sold, as opposed to heifers.

The 2024 market has begun on a positive note, with the steer premium dropping to 18% by the end of January. Indicating a robust restocker market for both steers and heifers, with a strong outlook for the year.