Feeder heifer purchases grow three fold as lot feeders' buying patterns change amid growth

As Australia’s feedlot industry has grown and evolved, so has the buying patterns and behaviour of feedlots buying heifers to feed on.

The feedlot industry has grown rapidly in the past five years, to the tune of 56% or nearly 570,000 head increase in numbers on feed between Q2 2020 and Q2 2025. With that growth has delivered, naturally, an increase in demand from lot feeders for cattle and that shift has brought a sharp adjustment in the buying patterns of heifer purchases.

As Figure 1 below shows, the numbers of heifers purchased by feedlots has risen rapidly since Q3 2022, increasing nearly three fold in the space of three years. That growth in numbers and the sustained quarter-on-quarter rises indicate a shift in lot feeders' buying patterns and a structural change in the market place.

Large numbers of heifers have been traded and backgrounded throughout 2023 to today, with buy-in prices and the discount for heifers relative to steers, encouraging producers to utilise this trade option. The alignment of optimal trading conditions to background heifers and substantial growth in feedlot capacity has brought about this structural change in the marketplace.

Underlying triggers from feedlots for heifers

Beneath the overlaying data, there are a several factors which is adding weight to heifer demand and interest:

• As feedlots have grown, so has their experience and willingness to feed heifers;
• Reapproval of access to the China market for several Australian beef exporters; and,
• Market dynamics, due to large availability of supply and a tighter sale price for fed heifers relative to the buy rate.

As lot feeders have expanded, the requirement for larger numbers of cattle has naturally grown, which has encouraged some lot feeders to consider feeding heifers in larger numbers than they had before. The learnings taken from this and the improvements in feeders abilities to feed heifers efficiently has brought about a greater acceptance for them to feed. Thus driving increased numbers purchased.

Furthermore, with the reapproval of market access into China for several large beef export processors, this has brought about renewed demand for Hormone growth promotant (HGP) free cattle. Heifers are well suited to a shorter feeding program and without the influence of HGPs, marble and they perform better when processed to meet that brand or market segmentation which has expanded under the reapproval of licensing into China.

Finally, as the cattle cycle matures, the increasing numbers of the herd more broadly has meant a reduced need for producers to retain larger numbers of heifers, thus increasing availability of heifers in the market to be sold. On the feedlot side, the buy price relative to steers has been steadily growing in dollar terms, yet the rates feedlots receive for fed heifers relative to steers has not, this has encouraged them to pursue heifers as an alternative feeding option.  

The Bottom Line

• As Australian feedlots have grown, so has the buying behaviour and numbers of heifers bought by lot feeders.
• Numbers of heifers purchased by feedlots out of NLRS reported saleyards reached a record high in Q3 2025
• Expanded market access for processors, greater comfortability feeding heifers and a larger supply availability are all contributing factors.

Ripley Atkinson's experience in the red meat industry and current role at StoneX developing price risk management tools for Australia’s sheep and cattle sectors ensures he delivers unique, whole of supply chain insights and analysis across key factors such as prices, supply, production and the drivers of the sheep and cattle cycles.

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