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OTH prices skyrocket as competition intensifies
04 February 2021
Key points:
- Queensland over-the-hooks (OTH) prices jump for all categories
- OTH prices for bulls climb highest, up 37¢/kg for all weight ranges
- The smallest rise was 11¢/kg for some categories of steers and cows.
This week, Queensland OTH prices skyrocketed across all categories as reduced supplies across the state fuelled competition between restockers, feedlotters and processors and drove the price increases.
The reduced supply of cattle in Queensland can be attributed to two key factors:
- Improved seasonal conditions across Queensland have contributed to producers retaining cattle with the intention to rebuild their herds.
- Increased stock retention has exacerbated issues processors have faced around an already diminished herd, which reached historically low levels in 2020 on the back of prolonged drought.
As can be expected with a reduced supply pool, this has driven up competition between restockers, feedlots and processors for limited cattle available, pushing prices up across the board. The sentiment of a rebuild and improved seasonal conditions are encouraging to restockers, while the high prices for finished cattle are supporting feedlot buyers. Both are placing pressure on processors to fill their contracts, creating the perfect scenario for prices to jump.
Prices for EU fully grown steers and bulls jumped the most significantly, up 22¢/kg and 37¢/kg, respectively. While MSA heifers are still receiving a discount to steers of 4%, each rose by the same margin this week.
The jump in OTH prices in Queensland is similar to the jump observed in NSW through early January, and highlights the challenges for processors as competition intensifies.
© Meat & Livestock Australia Limited, 2021
