THE QUESTION is are we ready for 2017?
January 2017 sees all of the annual January feature sales come to the fore, and while most are 2016 drop steers and heifers, some cows and calves and PTIC females are also sold.
One thing is for certain, prices will be better than 2016, as the calves will be heavier, and although fat cattle prices have softened, store markets are sailing along nicely.
However, how can we judge, or estimate, how these annual sales will go, when one compares physical sales to recent store markets?
The Eastern Young Cattle Indicator (EYCI) closed at 636.75c Monday. While this is easing back, it is still 50c/kg above this time last year.
Fifty cents per kilogram carcass weight amounts to a good sum of money, depending on weight.
Let’s look at some other figures from MLA indicators.
The Eastern States Feeder Report, issued Monday, might give some interesting insights. Feeder Steers, 280-380kgs lwt, for the domestic market, shows steers averaging 349c, and heifers 329c/kg lwt. This is for consignments direct to feedlots.
Export steers, 300-420kgs average 351c/kg lwt.
The report quotes steers of similar weights, purchased at saleyards over the past seven days, averaging 344c/kg.
All true.
However, let’s look at the scenario of store sales. Feedlots are reluctant to operate, because it is to dear, and they can pick up smaller numbers through physical markets. But they cannot pick up larger lines of well bred steers, as they are not available.
Overall, the number of cattle on feed has fallen by close to 200,000 head, so many of these will need to be replaced, but feedlots don’t want to pay the current store cattle prices.
Producers with plenty of grass, and money in their pockets, are driving store sales at the moment, and this will continue into the annual feature sales.
We saw this at Euroa on Wednesday.
Yearling steers in store markets have made between 300&350c/kg, and younger steers anywhere from 360-490c/kg lwt. This puts price averages at these markets way above that of physical sales. No wonder feedlots are hovering around those larger physical sales.
With well over 15,000 steers and heifers to be sold in January, supply of these high quality, well-bred cattle will soon dry up. There will still be others, but if feedlots are going to get their numbers back up 900,000 plus, they will have to get active.
