By Emma Fessey, Analyst, AuctionsPlus Market Insights
With 2020 coming to a close, the excellent growing season across much of the Eastern States has seen the heifer market hit unprecedented highs. The record prices have been the combination of fierce competition from producers looking for lighter stock to capitalise on bulging feed supplies and the desire to rebuild herds. Additionally, the favourable seasonal outlook for 2021 has seen many producers look towards heifers as the more cost efficient option to rebuild herd numbers, albeit slower, compared to the more expensive option of cows, PTIC or cows with calves-at foot.
The AuctionsPlus Market Insights (AMI) team has reviewed the growth of the heifer market and prices throughout 2020, with a major surge in heifer lines being offered through the online selling platform in Queensland. Extremely high young cattle prices has reportedly enticed some cattle producers in Central and Northern Queensland and the Northern Territory to sell heifers earlier than normal in an attempt to capitalise on the robust demand, as opposed to growing them out to heavier weights. AuctionsPlus data reveals that in 2019, a total of 16,230 weaner heifers were offered from Queensland, compared to 29,935 head offered online so far in 2020 - an 84% increase.
In the midst of unprecedented demand for quality young cattle, it has become evident that various northern vendors who rarely sell young cattle early, except in times of drought, are attracted to the historically high prices in the robust cattle market. This can be observed through Figure 1, where key Queensland cattle breeds have seen a significant rise in interstate purchasers, as fierce restocker competition from southern buyers drives demand. Agent Mitch Braithwaite from Elders in Charters Towers, Queensland, said that his region “still hadn’t had a significant rain event and feed is patchy, so many clients who usually grow cattle out are taking a punt on the big prices for lighter cattle”, with many lines being snapped up by buyers in southern Queensland, New South Wales and even Victoria.
Figure 1. Percentage of weaner and yearling heifers and cows sold in QLD to NSW buyers between 2015-2020.
Of the Queensland cattle offered through AuctionsPlus in 2020, 61% of all weaner heifers and 54% of all cows with calves-at-foot have been sold to buyers from NSW, compared to 25% and 13% respectively, in 2019. The strong north to south flow of cattle, especially including breeds such as Brahman, Droughtmaster, Brangus and Santa Gertrudis, indicates the sheer determination for many NSW beef producers to restock for both weight gain and breeding purposes. Mitch Braithwaite suggests that “many buyers are working to a budgetin $/head, rather than c/kg, and lighter heifers can cost anywhere between $600-$1000+/head, so they can fit more head of lighter heifers into a budget”.
Figure 2. - Average c/kg price of weaner heifers across their respective weight categories sold on AuctionsPlus from January 2019 until November 2020.
As highlighted above in Figure 2, weaner heifer prices have skyrocketed throughout 2020. With the traditional margin between weaner steers and heifers significantly reduced, the desire for potential future breeding stock has accentuated the already tight supplies. With 330-400kg heifers so far in November averaging 453c/kg, 60% above the same period last year, many producers are being forced to look far beyond their regular buying regions for suitable lines.
Moving forward, the market for heifers for weight gain and breeding remains buoyed with feed-driven southern buyers. However, Mitch Braithwaite believes that “a big rain event will slow the market very quickly...on top of that, it is now exceeding 40 degrees on most days so mustering cattle will slow down in comingweeks due to the heat”, which will result in subsequent decreases in QLD and northern offerings.