Market Morsel: How now steer/cow?

Market Morsel

There are reports at the saleyard that suggests young heifers are outperforming young steers at the moment, which can occur during robust herd rebuild phases. However, is this also true for medium steer prices versus medium cow?

Cow prices don’t ever outperform steer prices, but we can assess the percentage spread over time to see if there is any saleyard rush to cows in favour of steers at present causing the premium spread steers usually command to be narrowed.

The long term pattern for the medium steer to medium cow spread highlights the average since 2006 to be a premium spread of 31% in favour of steers. A range of 23% to 40% spread premium would be considered relatively normal, as outlined by the 70% range boundary, whereas moves below a 14% premium or above a 49% premium would be considered extreme.

Seasonality of the spread

Currently the spread sits at a premium of 33.7% indicating that there isn’t any favouring of cows at the saleyard. Although, as the seasonal chart indicates this wasn’t the case in early September when the spread narrowed toward 16% and moved outside of the range that would be considered normal for this time in the year (as outlined by the 70% range boundary).

Much of the season the steer/cow spread has remained within the normal range, suggesting no strong preference for steer nor cows is being exhibited. Contrast this to the early part of 2020 when the spread remained a relatively narrow levels from February through to June showing some good competition for breeding stock in favour of steers.