The Eastern Young Cattle Indicator (EYCI) had a slight rise this week, gaining 10¢, bouncing off support at 550¢ and finishing Thursday at 566¢/kg cwt. A few years ago a 10¢ move in the EYCI was a bit of a big deal. These days it’s a marginal movement.
Figure 1 shows just how weak the EYCI is compared to recent years. The EYCI is less than half the value it was this time last year, and 400¢ off July 2021. It has been a depressing time for cattle traders.
The market didn’t really rally on the widespread rain this week. The Roma Store sale, the largest contributor to the EYCI, saw yarding drop by 63%, but buyers remained relatively cautious. For example, light restocker steers averaged a few cents cheaper than last week, at 362¢/kg lwt. Still, in cwt terms, it’s 100¢ above the EYCI itself.
Cattle slaughter has found a peak for now, with east coast values down marginally to the end of last week. Figure 2 shows slaughter is around the five-year average, but it is around the same level as 2020 and way off the peaks of 2019.
More capacity will have to open up to deal with the number of cattle which are likely to hit the supply chain in the coming year.
When it rains we often see supply react first, as growers can see grass on the horizon. Restocker demand takes a little longer to react, as buyers wait until the feed is on hand. The recent downward trend will have plenty wary of jumping in, but it looks like we might be seeing the low.