It was interesting to see cattle yardings up last week, but it might be a different story this week. Processors have ramped up prices at saleyards to try and secure cattle to fill kills. Supply is being interrupted by floods and rain, and as such we saw some moves at saleyards this week.
The Eastern Young Cattle Indicator (EYCI) gained 10ȼ for the week, bouncing to 1041ȼ/kg cwt. This was driven by trade cattle, with restockers and feeders taking a back seat.
The big moves were in heavier slaughter cattle. The Eastern States Heavy Steer Indicator gained back most of last week’s fall to move back to the top of the range, close to 900ȼ/kg cwt. The National Medium Cow Indicator also jumped in most states, but was dragged down by 10ȼ by WA to 643ȼ/kg cwt.
Figure 1 shows the narrowing of the spread between the EYCI and slaughter cattle indicators over the past six months. The wet year is impacting supply of finished cattle, while demand for young cattle from restockers has waned.
From a historical perspective the EYCI is still at a very strong premium, but it’s well down on this time last year.
The week ahead….
When rains ease (if they ever do) we should see improving supply of finished cattle, and stronger demand for young cattle. The returns from backgrounding remain very good, and grass growth following the rains should be strong, bringing a bit of grass fever with it.
The coming weeks might be a good time to quit finished cattle, if you can get a truck in, and yards can handle the traffic of course.