The Australian northern cattle feeder price decreased to 390A¢/kg this week from 395A¢/kg the week prior, as feedlots hold firm on low grid prices and feeder steer supply remains low as producers look to capitalize on a good season’s pasture growth to get steers to the top end of feedlot intake weights.
Feedlot pricing and transactions covered a spread of 370-420A¢/kg this week with most transactions between 380-400A¢/kg. Rain in western and northern Queensland is still slowing any cattle movements in those regions forcing feedlots to pay a premium for immediate delivery feeder steers at sale yards.
Many feedlots are looking at tightening top intake weights as producers look to sell cattle as close to top weight specification as possible, as price reductions on feeder steers take a toll. Some feedlots would allow steers up to 500kg but many have been forced to drop top weights to 480kg and introduce heavy deductions for out of spec cattle delivered because mobs of cattle are coming in with average weighbridge weight of 495kg/ head. The delivery of heavier cattle is leading some feedlots to cut duration on feed to 100-105 days to combat cattle blowing processor specifications.
An influx of cattle is expected to hit the market in March and April possibly leading to further price falls, particularly as buyers are being more selective across the industry. Low rainfall will increase cattle supply, but small systems of rain are enough to disrupt cattle movements or deter producers from selling.
As United States (US) cattle herd numbers have hit lows not seen since 1962, leading to an expected decline in beef production into 2023. Australia will look to capitalize on a less competitive beef export market, although this could take months to flow through to domestic meat and cattle prices. Australia’s processor capacity is a major discussion point in the market, as processors increase staffing numbers and continue long term training. A housing shortage in rural communities near processors is also creating challenges for both employers and workers, as interest rate rises have yet to impact rural suburban real estate.
Angus feeder steer prices decreased marginally to 431A¢/kg this week from 434A¢/kg last week, as many feedlots remain quiet and the market continues to experience an oversupply of cattle. Supply of Angus feeder steers is expected to decrease in March, which could see prices firm. Feedlots are still reluctant to hold excess Angus cattle on feed as meat sales remain volatile.