Australia northern feeder cattle: Cautious market

The Australian northern cattle feeder price fell to 336A¢/kg this week from 348A¢/kg the week prior as processors continue downward pressure on kill prices, and producers panic sell and remain cautious to buy back in.

Feedlot pricing and saleyard results ranged from 325-355A¢/kg. Roma and Dalby saleyard numbers bounced back this week to 7,000 head and 4,000 head respectively.

Feedlots are concentrating on purchasing quality lines of cattle to gain optimal performance for 100 days in the pens, with no margin for non-performing cattle. High ration prices and downward trending processor kill prices is making feedlots look to gain peak cattle performance in average daily gains from quality in spec cattle. As a result, out of feedlot spec cattle and high Brahman content feeder cattle are copping major deductions in the current market.

Cattle trading conditions are currently ideal with weaner prices cheaper c/kg than feeder steers, but many comment that the market never stays at that way for long. It is a buyers market but some producers lack confidence with a dry outlook and barely enough oats crops just yet to get through the winter in southern Queensland and northern New South Wales (NSW).

As the end of financial year (EOFY) approaches on 30 June, many producers of both grain and cattle are waiting to push sales and earnings into next financial year, where a looming El Nino threatens to reduce profits. July could see some downward pressure on grain prices, if supply increases and international demand on Australian grain eases from highs earlier in the year.

After a long wet season mustering is in full swing in the north of Australia, with machinery on the go ensuring truck access and cattle movements. As cattle start to flow in the north there is potential for supply to out weigh demand for live cattle exports, with monthly export volumes yet to reach 50,000 head for 2023.

The Angus feeder steer price dropped to 413A¢/kg this week from 422A¢/kg the previous week. The Angus feeder market flipped quickly in the last week with many feedlots filling contracts for the next 2 months, now holding up on purchasing, while they digest cattle already procured. Concerns around a lack in supply of feeders through winter saw a spike in demand early in May, but these concerns have eased. Cheaper prices in NSW are also putting some downward pressure on northern prices.