Market Morsel: How now medium cow?

Market Morsel

Medium steer to medium cow price spreads eased significantly over November as cow prices held relatively firm, around 380c/kg lwt while steer prices eased 50 cents during the month. As the long term percentage spread pattern indicates the medium steer generally holds about a 30% premium to the medium cow, highlighted by the long term average spread (black dotted line). The grey shaded 70% ranges demonstrates that it is relatively normal to see fluctuations in the premium spread between 23% to 40% and movements under 14% premium or above a 50% premium would be considered extreme.

The current spread between mediums steer to medium cow sits at 24.9%, after narrowing from a premium of 37.1% to 17.9% during November. A premium spread between medium steer to medium cow that is sitting at the lower end of the normal range suggests a slight preference toward breeding stock exists currently but it is nothing like the narrowing of the premiums seen during the first half of 2020 when the premium eased towards 10% in February and May.