Last week, Meat & Livestock Australia released its newest indicator, one that has been needed for some time, the National Feeder Heifer Indicator.
Now that the pricing information has been made available, we can analyse unique pricing insights which speak to the immense trade opportunities heifers have afforded over the past two years following the cessation of the herd rebuild in early 2023.
When considering in a broader lens, how the cattle cycle moves, and overlaying this with underlying price data, the insights tell a very compelling story about why heifer trading has been such an opportunity.
READ MORE: Heifer prices a lead indicator to herd rebuild, but it won’t be a national one
Figure 1 below, depicts NSW 330-400kg feeder heifers and NSW restocker yearling heifers, 200-330kg price spreads (Feeders minus restockers) on a quarterly basis back to Q3 2015 (10 years ago).
The chart is a great example of how the cattle cycle works, you’ll see in 2016, feeder heifer prices moved into a mild discount to restockers for a short time as a small rebuild took place following the liquidation years of 2013-15. Then, during the 2017-19 drought, when demand for restocker heifers was at its weakest, feeder heifer premiums were the strongest they’ve ever been. And again in the 2020-2022 rebuild, generally feeder heifers were at their largest discount to restockers, due to the immense demand to rebuild numbers following the drought by producers.
In current terms, the spreads continue to reinforce how a lower buy price on heifers (200-330kg) compared with the stronger sale price on the feeder weight equivalent in NSW, in this example, is such an attractive trade. The ability to buy heifers at a discount to the sell price and background for a trade, with the addition of weight gain underlines this.
Why is this important?
Utilising underlying data like the dynamic I’ve explained above and applying knowledge of the marketplace ensures that as a producer, you’re able to quickly recognise trading or backgrounding opportunities and act upon it.
Being armed with information, data and insights will support your ability to make more informed decisions and in turn capitalise on opportunities before the broader marketplace has reacted when the opportunity will then ultimately have disappeared.
As this is a NSW centric example, when broader NSW goes into liquidation (including northern NSW) you’ll see feeder heifer prices widen against restockers as demand wanes from the producer and the opposite is true if a rebuild were to eventuate. Which for NSW I don’t foresee happening until north of Dubbo gets really dry.
The StoneX Australian Feeder Cattle swap in line with the recent market movements has seen its forward curve and bids and offers from buyers and sellers slightly strengthen. Seller (producer) interest is now extending into the January -February 2026 contracts.
As the swap is based on the Darling Downs, Queensland crossbred feeder steer market, forward bids and offers are reflective of a market firm to slightly dearer on spot prices, $3.70-$3.80/kg lwt.
With so much global uncertainty across the world in markets of all types, utilising risk management strategy to protect against volatile conditions, both climatic and broader are critical to supporting business long-term sustainability. Something the beef industry doesn’t consider enough.
Being informed with data and insights allows opportunities to be capitalised on before the broader market makes sense of trades like the one that has existed for backgrounding heifers into feeder weights over the past 2 years.
Price relationships like feeder and restocker heifers are a fantastic example of how the cattle cycle works.
Risk is everywhere in Australia’s cattle markets, all of which is out of the market’s control, namely biosecurity incursions, geopolitics and weather – factors that demand a conversation in the beef industry about how to manage risk better than what we currently do.
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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