Producers eye feeder steer market

Encouraged by impressive gross margins achieved this winter by those trialling carrying weaners on, and by predictions that feeder steer prices in the region could reach $3.50 a kilogram next year even without rain, producers are starting to look for advice on pasture improvement and genetics for the job.

Managing director of southern Queensland feeder steer procurement specialists Allied Beef, James Maclean, said Australia was entering an unprecedented phase in meat prices and $3 to $3.50 was feasible for feeder steers by early next year given the lack of supply following big drought sell-offs.

Speaking at a recent field day held west of Casino, Mr Maclean, Toowoomba, said feedlots in Queensland and northern NSW had already broadened their specifications and were feeding lighter cattle.

The world beef industry was at an all-time high and traditional correlations between US cattle prices - where weaners were making $1500 a head - and Australia would indicate big gains in the Eastern Young Cattle Indicator next year, he said.

"Our average slaughter capacity has been going full steam and demand has still gone up - an extra 20pc of volume has been easily absorbed," Mr Maclean said.

"There is no indication that rising demand will be a short-term bump."

With the volatility in the veal market felt hard this year, many coastal producers have been left badly wounded and, judging by the big attendance at the field day, are looking for ways to build marketing flexibility into their operations.

Presented by Hoffman Beef Consulting, the day ran through the outlook for both the feeder steer and veal market and pasture and crop options for carrying calves through winter on the coast.

"A lot of north-eastern NSW producers have been locked into the veal market for many years but it has not been so kind to them in recent times," said beef consultant Bill Hoffman.

"The feeder steer market has been ticking away in the background and is a real option for spreading risk.

"It's not for everybody. You can't just put weaners out on carpet grass and expect them to do something.

"But if you have the ability to grow winter forage crops and provide a relatively high level of nutrition, it is possible to achieve some good results."

For father and son North Coast beef producers, Bill and Paul Hewetson, the decision to carry 260 weaners through winter and target the feeder steer market looks like paying off.

Calves from Brangus and Angus cows joined to Simmental bulls, yard weaned in April at 250 to 260 kilograms, have gained 100kg after 150 days on green feed at their Mallanganee property, "Nyara".

Now 12 to 15 months old, a sample of the European-crosses averaged 378kg and the black calves 384kg.

That works out at 435kg produced a hectare.

Valued at 220 cents, it is $953 in gross product a hectare and the Hewetsons estimate it costs $240/ha, including labour, to grow the winter green feed.

That result, according to Mr Hoffman, was "bloody good going".

"The average New England producer achieving 300kg/ha in a year would be happy," he said.

Bill Hewetson said the steers were run on 0.2ha (half an acre) per head, strip grazed using electric fences for about a week per rotation.

The Hewetsons' plan is to keep the steers through summer on improved pasture and sell into the feeder steer market before next winter.

They will probably do the same again next year.

"The ideal would be to sell half our drop as weaners in autumn and value-add the other half," Mr Hewetson said.