Domestic paddock feeder prices at record highs

Cattle prices have rallied across the eastern states this year on the back of improved seasonal conditions and tighter supplies. Young cattle prices have moved from strength to strength, driven by heightened store competition between feeder and restocker buyers.

A more expensive young cattle market has seen a shift in supply trends, particularly in northern regions that missed the southern rainfall events. As a result, producers are bringing forward young feeder type cattle in large numbers compared to finished types. For the month of October, yearling heifers and steers accounted for 73% of total yardings in Queensland, compared to NSW where these categories accounted for 44% of yardings. However, last month also saw restocker buyers purchase 60–65% of yearlings offered in Queensland, which has continued to pressure the store market and domestic feeder prices.

The Eastern States Paddock Feeder Steer and Heifer Indicators reached record highs last week, up 41% and 35% on year-ago levels to average 424c/kg live weight (lwt) and 400c/kg lwt, respectively. The feeder steer indicator is sitting 106c above the five-year average at 318.4c/kg lwt, while feeder heifers have lifted 92c above the five-year average to sit at 308.2c/kg lwt. Both indicators have pushed higher since May, reflecting the intensifying competition for a smaller pool of available cattle.

Looking ahead, average to above-average rainfall forecasts for Queensland over the next three months could see young cattle supplies taper off in northern regions. This would continue to put pressure on prices and further reduce the pool of available cattle. The challenge for feedlots in the coming months will be sourcing lighter cattle to replace backgrounders, which will be exacerbated by intense restocker competition.

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