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WA young cattle prices continue to outpace eastern states
17 October 2019
Key points:
- WYCI maintains premium to EYCI
- Improved confidence across south east Australia
- Victorian restockers maintain eastern states premium
Western Australia has continued to outpace the east in terms of young cattle prices. Despite much of the state seeing below or very much below average rainfall so far during 2019, slightly better months in June and April have provided an element of support to the market in the west. For the week ending 11 October, the Western Young Cattle Indicator (WYCI) traded at 539¢/kg, an 11% or 53¢ premium to the Eastern Young Cattle Indicator (EYCI), a trend that dates back to the end of 2017.
Since the beginning of 2014, of the weeks that have both an EYCI and WYCI recorded, the western indicator has been at a premium for 80% of the time, and operated at an average of 9% higher.
Due to the high percentage of young cattle that are purchased by restockers, the prices for these cattle are notoriously driven by the seasonal conditions at the time (i.e. in a good season, restockers are looking to purchase more cattle and the opposite in a bad season). As a large proportion of the eastern indicator is based on cattle sold in NSW and Queensland, it is often entering the wetter spring and summer months that restockers begin to operate more extensively.
Over the last 5 years this has not been overly evident on the back of several failed summers. While the EYCI has improved marginally through the last 2 months of the year, the WYCI has on average lost 15¢ from the beginning of November until the end of December.
On a state-by-state basis, it is easy to see the seasonal variability. Many southern parts of the eastern seaboard received at least average winter rainfall, strengthening restocker intent and prices heading into spring. EYCI eligible cattle in Victoria averaged 522¢/kg cwt last week, 28¢ above NSW and 49¢ above average Queensland prices, as the northern states continue to struggle with critical drought conditions. Prices in Western Australia are higher than all other states, with young cattle averaging 539¢/kg cwt for the week ending 11 October.
© Meat & Livestock Australia Limited, 2019
