Market watch: Queensland young cattle

The most recent drought declaration from the Queensland government (1 August) states that 57.4% of the state is in drought. These dry conditions have seen turn-off increase as feed availability declines which, in turn, has put pressure on prices.

EYCI overview

Eastern states saleyard prices have mostly been following a downward trend since the beginning of the year, with the Eastern Young Cattle Indicator (EYCI) dropping below 500¢/kg carcase weight (cwt) in April. The EYCI has continued to track below the 500¢ mark since then, for the most part, settling at 485.5¢/kg cwt yesterday (4 September).

Queensland has seen a similar trend to NSW of fewer young cattle sold at MLA reported saleyards meeting the EYCI specifications*. In August, 68% of vealer and yearling cattle sold through MLA reported Queensland saleyards were eligible to be included in the EYCI, compared to 85% in August last year. A higher proportion of poorer conditioned, D muscle score, vealers and yearlings coming through the saleyards is driving this decrease due to the challenging seasonal conditions.

Decreased throughput has translated to increasing prices

The total throughput of young cattle in Queensland saleyards has decreased considerably over recent weeks, in response to the south-east of the state receiving some rain at the end of August. Last week (ending 31 August), just over 5,700 cattle were yarded, compared to more than 17,200 head in early July.

Reduced supplies have supported the recent up-kick in prices. At the conclusion of last week (31 August), yearling steers averaged 260.7¢/kg live weight (lwt) after falling to 245.6¢ two weeks prior – the lowest point it has been since June 2015. These were back 17%, or 53.7¢, on year-ago levels. Over-the-hooks (OTH) indicators have also jumped this week, increasing by up to 14¢/kg cwt for some categories, with some contributors attributing this to tightening supplies.

Similar to NSW, in Queensland the price gap between C and D muscle score cattle has widened as the effects of the poor seasonal conditions continue to effect feed availability in drought-affected areas. Last week, young cattle in C muscle condition averaged 247.2¢/kg lwt, a 35.7¢ premium on their D muscle score counterparts.

*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.