As the shortest day passes and we creep into the second half of the year it is an opportune time to look back and see how the first six months in the store markets have tracked.
It has been a year where overseas demand has found its feet again, yet issues within our own shores have caused untold disruptions.
The R2 cattle market did suffer earlier on as finished stock were still taking up paddocks on-farm, due to backlogs at processors, and that meant buyers could not re-enter the market.
A similar story unfolded at weaner fair and calf sale time, but fortunately this was a year when most of the country enjoyed surplus growth and early grass markets put the ball squarely in the seller’s court.
R1 and R2 steers are a good indicator of how the markets are performing as all are purchased to finish, unlike heifers that are a two-way option (breeding or finishing).
Traditional and dairy-beef breeds are the most common in New Zealand, though exotic sires are often used to add size and scope.
AgriHQ data shows a steady path for R2 traditional steers and most averages since January have been between $3.10-$3.20/kgLW with prices now starting to gradually climb.
That is the typical trend and should peak from August to October.
At the current trajectory this year’s market should be stronger than last year.
Dairy-beef has followed a similar path but at a 30c/kg discount to the traditional lines.
From January to May 2022 prices were 30-45c/kg stronger than 2021, which was the result of very dry conditions in the previous year limiting demand.
However, in June that gap has closed to just 10c/kg.
R1 traditional steers have had a 25c/kg price advantage over the five-year average, though more variable with last year.
Current levels show a plateau as winter limits demand but despite rain causing delays for some North Island East Coast fairs, the weaner fair season was one of the better ones.
R1 dairy-beef prices have stuck close to five-year average levels but again at a clear advantage of 25-50c/kg on 2021.
Current demand for R1 and R2 steers is very much in favour of the older age group, which is driven by the time of year.
Few farmers are prepared to take on younger stock in the throes of winter and will wait until closer to spring to target this market.
At this time of year there are also larger entries of small lines of crossbred cattle, mainly coming of small blocks as most larger scale properties have already completed their offloads prior to the winter months.
There is even more limited demand for these types and buyers must meet the market.
Quality short-term steers on the other hand are in good demand and traditional cattle that fit into the AngusPure or similar programmes have made clear premiums and will continue to do so.
R2 Friesian bulls are also a significant class of stock, yet most are sold in the paddock with a much smaller proportion coming through the sale yards. Those that have been through the rostrums enjoyed a good year, despite also being at the mercy of limited processor space.
Prices have consistently stayed above last year and the five-year average.
Recent results are 37c/kg higher and heading in an upwards direction.
Last year, prices peaked in October, but today’s prices are already closing in on that level.
This article was written by AgriHQ analyst Suz Bremner. Suz leads the AgriHQ LivestockEye team, including data collectors who are tasked with being on the ground at sale yards throughout the country. Subscribe to AgriHQ reports here.
