Cattle grids lift across the eastern states

Queensland grainfed and grassfed over-the-hook (OTH) prices continued to rally this week and southern grids edged closer to their northern counterparts.

The supply of cattle in the north was impacted by good rainfall in Queensland over the past week, with producers holding back cattle to add weight or inaccessible paddocks creating supply pressures. Roma store sale was cancelled on Tuesday due to insufficient cattle numbers available to continue with the sale.

The lift in processor grids in the past week reflects the supply pressures and the need for processors to bring cattle forward. With southern grid prices now closer to prices offered in the north, the desire for processors to look south for cattle might start to ease.

For the week ending 28 February, the Queensland 100-day grainfed steer OTH indicator reached a record high, at 642c/kg carcase weight (cwt). The grassfed heavy steer OTH indicator was also reported at a record high, at 630c/kg cwt and the difference of 12c/kg between the respective indicators represents the narrowest levels since October 2016, when a similar rain influenced price spike was seen across the cattle market. At this stage in 2019, 100-day grainfed steers were averaging 41c/kg cwt more than grassfed steers.

Processor grids in NSW and Victoria also gained momentum this week as the demand for slaughter cattle across the eastern states intensifies. Southern processors have  greater exposure to the physical market, traditionally sourcing larger numbers from the saleyard as opposed to direct-to-works. Encouraged restockers, in particular northern restockers and feeders, were active in southern sales - noticeable in Wagga this week - providing additional competition across most categories, and supporting prices. Processors in the south looking to secure livestock have responded with grid increases to bring forward available cattle with stronger price incentives.

For the week ending 28 February:

In New South Wales:

• The heavy steer OTH indicator averaged 568c/kg, up 14c/kg cwt
• The trade yearling steer OTH indicator averaged 557c/kg, up 17c/kg cwt
• The medium cow OTH indicator averaged 477c/kg, up 13c/kg cwt.

In Victoria:

• The heavy steer OTH indicator averaged 588c/kg, up 17c/kg cwt
• The trade yearling steer OTH indicator averaged 565c/kg, up 17c/kg cwt
• The medium cow OTH indicator averaged 483c/kg, up 5c/kg.

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