Feeder Demand Starting to Pressure Backgrounding

Steady and consistent intakes of feeder weight steers and heifers by southern feedlots is starting to build into strong demand for yearling and weaner cattle despite poorer pasture conditions in large parts of Central Queensland and the Central West. With steer intake prices between 265-275 c/kg and wider weight range tolerances between 360-520kg liveweight, feedlotters have captured a greater number of suitable stock that traditionally would have pasture fattened. However, with forward sell grids still promising reasonable margins, there is a move from some of the larger integrated feeder operations particularly those with pasture leases to begin purchasing younger lighter cattle. Sales this week at Roma highlighted this ramping up on light cattle to prices north of 300c/kg and the trend followed through other sale venues during the week.

The premiums have been a saviour to breeding herds lightening off in the face of a poor winter with 3 months till reasonable spring breaks can be expected. Expectations are that the slowing supply of suitable stock could see values edge even higher and with Emeralds weaner sales scheduled next week, vendors are looking forward to better returns.

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