Restocker heifer price spreads to steers are a unique indicator into producer demand for cattle based on the cattle cycle.
The Q2 2025 heifer to steer price spread is in the top 16% of quarters since 2010 – indicating a lack of demand for heifers remains solidified in the market.
A potential southern herd rebuild will tighten price spreads with steers in this market if the season allows for a rebuild.
Tracking price spreads between different cattle types is a unique indicator into producer demand and buying behaviour which can otherwise be difficult to understand.
In the interests of providing my broad view of what these price signals mean, due to a lack of available transaction data that undermines confidence in spreads at a localised/state level, I’ve used the national restocker steer and heifer prices rather than singling out states, such as Victoria.
Saleyard throughput of weaners in Victoria throughout the year, pales in comparison to NSW and Queensland with most cattle sold at the weaner sales in January – which means using localised data with low throughput doesn’t provide a fair or accurate representation of the market.
I prefer to utilise quarterly level data because it allows for short-term weather fluctuations and market irregularities to be smoothed out. Furthermore, a decision to rebuild/liquidate a herd doesn’t happen on a weekly or even monthly basis, by taking a less frequent view you’re more likely to capture genuine, fundamental changes in demand which affect price more accurately.
Restocker heifer spreads to steers have been steadily tightening since their peak in Q2 2023 but for Q2 2025 remain in the top 16% of quarters since 2010. Meaning they remain very wide at a national level.
With 10 sale days remaining in the Jun-25 quarter, the current price spread for steers over heifers so far in Q2 2025 is 75c/kg lwt or 24%, which Figure 1 below depicts.
So, a wide spread between steers and heifers is a product of weak producer demand for heifers due to higher numbers on farm and a perceived poorer trade outcome. When spreads are tight, like they were in late 2020 due to intense producer demand for females as the rebuild kicked off properly, showing how producers were chasing heifers to enter the breeding herd amid tight supply. It’s a reflection of the cattle cycle essentially and a strong indicator of producer demand by cattle type.
Weak demand for heifers shouldn’t come as a surprise to anyone, we’re at the stage in the cattle cycle where no rebuild is occurring anywhere across the country and thus demand for future or current breeding females is low – recent AuctionsPlus eastern states Friday cattle sale results for breeders is a great example of this, in the face of recent rains across southern Australia.
The wide spreads are a product of the growth in the female breeding herd and weak interest in buying in outside females to further increase numbers. The data reaffirms that demand at a broad level, remains weak for heifers, this is unlikely to change materially until the large cattle areas move into a destocking and ultimately liquidation mode – which isn’t and hasn’t happened since the previous drought.
I can foresee producer demand for British cross and Angus heifers in southern Australia ramping up leading into spring, which will mean these spreads tighten. Producers will attempt to position themselves to capitalise on a good spring if winter rains deliver, allowing for a rebuild to be considered / take place.
This will place upward price pressure on heifer prices, all the while feedlots are chasing similar types to enter the feedlot, at comparatively discounted rates to steers. Meaning the spreads will tighten between steers and heifers as two different buying fraternities compete for the same article.
From my perspective, if this situation eventuates, and it’s a big IF with a lot of variables, I won’t be viewing this as an indication of any kind of national rebuild.
This will be a very location and breed specific dynamic that only affects southern Australia affected by drought.
Queensland and Northern NSW are flush with cattle, so heifer demand to enter the breeding herd will remain subdued and will only increase once these major cattle regions have experienced liquidation, which hasn’t happened since the 2017-19 drought on a broad level.
Nuance needs to be applied to these price relationships alongside experience and understanding that the north won’t be rebuilding. The data may indicate one thing, but you’ve got to support that with boots on the ground knowledge of the marketplace.
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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