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- The normal range in the QLD Vealer Steer to the National Vealer Steer spread discount is between a 0.2% to 6.2% discount. Currently it is sitting at a 21.2% discount.
- The NSW Restocker Steer spread is showing a particularly strong performance sitting at a 5.9% premium compared to an average spread discount of 2.0% and a normal range of 1.3% premium to a 5.2% discount.
- Both Victorian and Queensland Heavy Steer spreads are undervalued, highlighting processor concerns in both states.
Comparing cattle price spreads across categories can often signal segments of a market out of sync. Weekly price spreads have been calculated for key Meat and Livestock Australia reported cattle types for the three mainland eastern states comparing each category of cattle to their respective national cattle type.
The spread charts highlight the current weeks closing price spread (as at 4th Sept) compared to where the ten-year average spread has been for this time in the season, as well as a 70% range. This range demonstrates where the spread has fluctuated for 70% of the time for this week in the year and gives an indication of what could be considered normal spread behaviour.
Queensland cattle spreads show the heavy steer somewhat undervalued when compared to the national heavy steer price, trading at a 7.4% discount compared to the 2% average discount that could be expected. Given the ongoing operating concerns expressed by the JBS owned Dinmore processing plant in Brisbane it’s perhaps unsurprising to see Queensland’s fat cattle trading a little undervalue.
Although, the standout spread category in Queensland presently is the Vealer Steer. It’s not uncommon at this time in the season to see vealers at a discount as pasture is often at its worst prior to the onset of the wet season. However, the normal range in the QLD Vealer Steer to the National Vealer Steer spread discount is between a 0.2% to 6.2% discount. Currently it is sitting at a 21.2% discount.
Meanwhile, NSW saleyard cattle spreads are highlighting the optimism of the herd rebuild with store and younger cattle all running at a premium spread, well above where they could be expected to be for this time in the year.
The NSW Restocker Steer spread is showing a particularly strong performance sitting at a 5.9% premium compared to an average spread discount of 2.0% and a normal range of 1.3% premium to a 5.2% discount. Given the level of destocking in NSW last season it’s unsurprising to see the intent to rebuild is strong here on the back of the favourable rainfall outlook expected for Spring.
Victorian Heavy Steer spreads show a similar undervalued pattern to Queensland, which given the red meat processor capacity constraints impacting there at present it is little surprise.
Curiously, the Victorian Restocker Steer is also trading under the odds. This could be partly due to the very high NSW values lifting the national average higher. However, some anecdotal reports from Gippsland of very wet conditions are potentially limiting restocker enthusiasm presently.
Spread charts like these can be used to quickly identify market segments that are operating out of seasonal character, including those that may warrant further investigation to see what is driving the peculiar price/spread behaviour.
They can be tailored for a particular region or stock type to fit a particular business need and help participants to understand what is impacting their market. Get in touch with the EP3 team if you want to discuss how we can customise our reporting to suit your specific needs.