Market watch: NSW young cattle

Earlier this month the entire state of NSW was declared as drought affected, with large areas experiencing ‘intense drought’, according to NSW DPI.

The Eastern Young Cattle Indicator (EYCI) is typically regarded as a benchmark eastern market indicator, however with severe drought conditions affecting large swathes of the state, more cattle have begun to fall outside the EYCI specifications*. This week, we examine how the lighter and poorer conditioned cattle coming through the yards are tracking.

In July, MLA reported saleyard throughput in NSW totalled almost 63,000 head of vealer and yearling cattle. Of this total, almost 51,000 head, or 81%, fell within the EYCI specifications. While these cattle still make up the majority of the market, the proportion has declined considerably from the same time last year – in July 2017, EYCI eligible cattle made up 92% of NSW saleyard throughput. This decrease (-11 percentage points) can be largely attributed to the increased supply of lighter and poorer condition cattle coming through the saleyards.

Prices for young cattle have eased considerably since the beginning of the year, with NSW yearling steers averaging 258¢/kg liveweight (lwt) in July, down 23% or 77¢/kg from year-ago levels. Their vealer counterparts have seen a similar trend, averaging 243¢/kg lwt in July, back 34% or 123¢/kg lwt year-on-year. Young cattle prices usually follow a similar trend, with vealers typically having a premium on yearling prices, however as dry conditions persist we have seen the yearlings cross above vealer prices in recent months.

While this downward trend is evident across all young cattle categories, the margin between those better conditioned (C muscle score) cattle and their less conditioned counterparts (D muscle score) has begun to widen. In July, C muscle score yearling steers in NSW averaged 269¢/kg lwt, while the D scores averaged 199¢/kg lwt - a premium of 70¢/kg, this has price premium has grown 25% from the same time last year when the gap was 56¢/kg.

As widespread drought conditions continue, the number of young cattle coming through NSW saleyards has increased as feed availability wanes. In particular, the number of light weight vealers under 200kg has seen a steady increase since the beginning of the year, totalling just over 6,300 head in July, a staggering three-fold increase from July last year, albeit from a low base of just over 2,000 head. While these cattle represent a small proportion of the young cattle market, this marked increase in throughput has seen prices for these light weight vealers decline at a steeper rate than heavier vealers, whose supply has remained relatively stable in comparison.

For more detailed price and supply information for your local saleyard, visit MLA’s interactive online market tool.

*EYCI eligible cattle are vealer and yearling heifers and steers, C muscle, 2 or 3 fat score, 200kg lwt or greater, from saleyards across Queensland, NSW and Victoria.