An east coast state of spread

The Detail

Mainland east coast cattle spreads highlight the most recent week’s price spreads compared to the ten-year average spread for the same week in the season. Included is a 70% range (grey column) which shows how the spread can fluctuate season upon season, as the spread has historically sat within this banding 70% of the time.

Each category of state based cattle type is compared to the same cattle type for the national price. For example, Queensland Heavy Steer price spread compared to the National Heavy steer, Queensland Medium Cow compared to the National Medium Cow, etc..

Queensland spreads from last week show most categories are within the range that could be expected for this time in the year, with the exception of the Queensland Trade Steer and Queensland Vealer Steer. Both of these cattle types are below where they would normally trade.

The Queensland Trade Steer is at a 7.0% discount spread to the National Trade Steer. Normally, at this time in the year the spread ranges between a 2.5% discount to a 5.6% premium. The Queensland Vealer Steer is at a 15.5% discount to the National Vealer Steer. Usually the Queensland Vealer Steer spread can fluctuate between a 12% discount to a 4.9% premium at this time in the season.

New South Wales cattle spreads highlight why the National Vealer Steer price is elevated and pushing the Queensland Vealer Steer to a wider discount than normal for this time in the year. The NSW Vealer Steer and Restocker Steer categories are both above the upper end of their respective normal ranges.

Given that last season the cattle herd declined 14% in NSW, while it was off just 6% nationally shows that there is some real incentive to chase younger/lighter store cattle in NSW sale yards. The NSW Vealer Steer is running at an 8.4% premium to the National Vealer Steer, the normal range is usually between a 9% discount to a 5.6% premium for this week in the year.

The NSW Restocker Steer is at a 1.6% premium to the National Restocker Steer. Usually this is trading between a 6.3% discount to a 0.8% premium at this time of the season.

Most Victorian cattle categories are within or close to the normal range that could be expected for this time of the year, with the exception of the Victorian Restocker Steer. This category of cattle is reflective of the strong desire to rebuild in the southern states of NSW and Victoria at present. Queensland’s producers appear to be waiting for the summer monsoon season to begin in earnest before they start chasing after restocker types.

The Victorian Restocker Steer spread is running at a 2.2% premium to the National Restocker. Normally for this time in the season it would be trading between a 1.7% to 20.0% discount. Looking at how green Victorian is this season, with limited curing of grass in many areas, it is no surprise that restocker types are being actively sought.