TL;DR:
- Restocker yearling heifer prices have consistently stayed above heavy steer prices for 12 consecutive weeks, marking a significant period of premium since early 2023.
- This trend reflects a historical pattern where restocker heifer prices exceed heavy steer prices during recovery periods, driven by supply and demand dynamics.
- Over the last five years, restocker heifer prices have been at a premium 64% of the time, with a notable increase in price difference during the restocking period between early 2020 and late 2022.
For the past 12 weeks, the agricultural sector has witnessed a noteworthy trend: restocker yearling heifer prices have consistently outpaced heavy steer prices. As of 15 February 2024, the price for restocker yearling heifers stood at 304 cents per kilogram live weight (lwt), maintaining a 10-cent premium over heavy steers, which were priced at 294 cents/kg lwt. This period marks the first extended duration of such a premium since the beginning of 2023, highlighting a significant moment in the livestock market.
Historically, the price of restocker heifers tends to surpass that of heavy steers during periods of recovery and robust performance. This pattern is evident in the data collected by the National Livestock Reporting Service (NLRS), which shows that over the past decade, restocker heifers have been priced higher than heavy steers 51% of the time, with an average price difference of 4 cents.
Narrowing down to the last five years, this figure jumps to 64%, with the price difference widening to an average of 22 cents. This increase is largely attributed to the nearly three-year restocking phase from early 2020 to the end of 2022, spurred by favourable rainfall and weather conditions that encouraged producers to replenish their herds and paddocks.
The primary factor influencing the restocker indicator is the balance between supply and demand. In the aftermath of droughts or during positive climatic seasons, producer confidence grows, leading to increased stock retention and herd rebuilding efforts.
Consequently, fewer restocker animals are available in sales channels, where demand remains high, resulting in price surges. This dynamic was particularly evident during the price spikes from 2020 to 2022.
Recent trends indicate a steady improvement in prices, accompanied by consistent week-on-week increases in yardings for both heifer and steer restocker indicators. This suggests a shift in market confidence, driving prices up not due to a decrease in supply but rather an increase in demand and market optimism.
This analysis is provided by Erin Lukey, Senior Market Information Analyst, offering an insightful look into the current state and historical trends of the livestock market.
