Export beef prices have reached record levels and it's dragging some cattle prices with it, while leaving others behind.
Heavy cattle in NSW, Victoria and Queensland are all at strong values, with Queensland at an 86c, or 16.5 per cent, premium to the Eastern Young Cattle Indicator.
Trade steers in Victoria and NSW are sitting at premiums well above the normal range, while in Queensland it's actually below the average for this time of year.
In NSW and Queensland, cow prices were recently within 12c and 10c/kg cwt of the EYCI.
While heavy and trade steers are at historically strong premiums to the EYCI, it is the lack of discount in cows which is most interesting (Figure 1).
The five year average discount for Queensland cows is 19pc at this time of year and the current discount is sitting at just 1.8pc.
The heavy steer price has been on the rise relative to the EYCI for longer.
Queensland heavy steers have rallied from a 20pc discount at the end of 2017, to hit a 20pc premium last month.
The relative rise in heavy steer prices has been due to tightening supply, with rising export prices giving more of a boost in recent times.
What does it mean?
Finished cattle prices provide the base for the cattle market.
Young cattle prices usually move in line with finished values but when feed gets expensive it pushes finished prices higher, leaving young cattle prices behind.
There appears to be limited further upside for finished and cow prices without a rise in the EYCI.
But strong relative values for finished cattle and cows indicates plenty of upside for young cattle when grass supplies improve.