The National Young Cattle Indicator (NYCI) is Meat and Livestock Australia’s new go-to guide for the restocker market, with its inclusion of all states as well as online sales making it more widely relevant than the Eastern States Young Cattle Indicator. While it was only launched in May, MLA has backdated the figures to 2000, allowing us to determine average figures over the longer term and use them as a guide to forecasting.
The inclusion of the online sales has been
the biggest difference between the EYCI and the NYCI of late it would seem. If
we look at throughput for the NYCI for the past month, NSW online sales and QLD
online sales were the second and third highest contributors to numbers, both at
12% with about 52,000 head and 50,000 head respectively. Even online sales in
Victoria, where physical sales have been limited due to the poor seasonal
conditions, came in at eighth place with 3% of the throughput for the NYCI.
Queensland has also been driving numbers at
physical sales, with the Roma Store sale contributing nearly a quarter of all NYCI-eligible
cattle in the past month, equating to more than 100,000 head. Gracemere, Dalby,
Blackall and Casino (technically NSW but servicing both sides of the border)
have been the next biggest contributors respectively.
NSW online sales have achieved the
strongest prices in July, averaging 677¢/kg carcase weight, compared to the
NYCI average of 596¢/kg, indicating there’s plenty of demand to soak up the
higher throughput. One would hazard a guess that the stronger-than-average
prices on Victorian online sales, which sat at 624¢/kg for July, would have
also been driven primarily by demand north of the border. And despite the big
numbers sold through Roma and Dalby this month, prices there still sat just
above the average, while online buyers of Qld stock were purchasing at a slight
discount.
Currently sitting around the 610¢/kg
carcase weight mark, the NYCI is about 10% above year-ago levels and creeping
closer to the 10-year average than it has been all year. Given the price highs
of the past five years, it is still nearly 20% below that price average.
Looking ahead, both the five and 10-year average prices increase by 7% between
now and the end of spring, which would take the NYCI up to 654¢/kg.
What does it mean?
As one would expect, restocker activity and price are being driven by producers who are experiencing better seasonal conditions, with encouragement coming from stronger finished cattle prices – the heavy steer and processor cow indicator are currently at the highest premium to year-ago levels of all price gauges.
Both these factors should stop any slide backwards for restocker prices and see the NYCI track at least on par with historical levels through the spring. Strong supply could put the brakes on any further upside than that.
Key Points
- The National Young Cattle Indicator has climbed above year-ago levels and reached its highest level since March.
- Both the five and 10-year average for the NYCI see it rising by 7% between now and the end of spring.
- Positive seasonal conditions in parts of NSW and Queensland driving restocker demand.
Click on figure to expand
Data sources: MLA, Mecardo
