Demand drives feeder steer price up 30% year-on-year
05 August 2021
Key points:
- National Feeder Steer Indicator hits record 495.75¢/kg cwt
- Beef exports jump 10% in July compared to June 2021, to hit 81,171 tonnes swt
- Heavier feeder weights continue to be purchased as good season progresses
The National Feeder Steer Indicator achieved 495.75¢/kg lwt on Tuesday 3 August, up 30% on year-ago levels.
Similar to the EYCI rising in recent weeks to crack the 1,000¢/kg cwt mark, feedlot demand has remained strong despite significantly larger yardings, highlighting intentions to attain supply. It is evident that continued domestic demand for livestock is being fuelled by international demand for beef, with July exports rising 10% from June levels. Japan and South Korea both lifted at 15% and 12%, importing 24,199 tonnes swt and 14,006 tonnes swt, respectively.
Domestic supply
The top saleyards contributing to the recent feeder steer price rise are Blackall, Roma, Dalby and Wagga. Queensland yards are contributing 50% of feeder cattle, with NSW trailing at 40%. When comparing the month of July to 12 months prior, Queensland had a slightly higher share of 53% to NSW at 33%. This demonstrates NSW yards have increased activity in proportion to Queensland this winter.
|
|
July 2020 |
July 2021 |
% change |
|
Head |
23,957 |
25,829 |
8% |
|
Price lwt |
381 |
495 |
30% |
|
Weight kg |
396 |
423 |
7% |
|
$/head |
1,508 |
2,098 |
39% |
Feeder weights
Analysing weight range breakdown highlights changes within feedlot buying activity. The 330–400kg and 400kg+ weight range for yearling steers typically comprise most of the cattle destined for feedlots. Since the drought broke, a higher proportion of feeder cattle have fallen into the heavier 400kg+ category, a trend that has continued over the last 12 months.
In July 2020, 330–400kg and 400kg+ saleyard volumes consisted of 34% and 29% respectively. As better seasonal conditions persisted, the relationship has grown in favour of heavier feeder steers, with July 2021 having 330–400kg and 400kg+ comprising 27% and 40%, respectively. As the market continues to rise, there has been a trend of heavier weights going through due to available feed and financial incentive to add additional kilograms.
Looking forward
So far in 2021, the EYCI has held an average 8% premium to the Feeder Steer Indicator. Assuming the recent July industry projections price forecast eventuates with the EYCI sitting at 874¢/kg cwt by Dec 2021, the Feeder Steer Indicator could be expected to sit around 440¢/kg lwt, 11% below current levels.
© Meat & Livestock Australia Limited, 2021
