Young WA cattle prices top the east

Prices of young cattle moving through saleyards in WA have remained quite strong in comparison to the eastern states for most of 2019. Young cattle have been outperforming their eastern counterparts consistently since the beginning of 2018, with the west trading at an average premium of 47.85¢/kg cwt. The spread between the Western Young Cattle Indicator (WYCI) and Eastern Young Cattle Indicator (EYCI) currently sits at 38.50¢ in favor of the west.

A lack of restocker appetite in the east, in the face of elevated supply and no significant improvement in conditions, has applied downward pressure to eastern states young cattle prices. As illustrated, following good rainfall in March, restocker intentions in the east remain extremely responsive to any improvement in pasture conditions, as was the case in 2016 when east coast restockers entered a rebuild phase. However, consistent follow-up rain is still required to sustain restocker demand.

While the west has not been immune to the dry conditions, young cattle prices have been far less volatile in recent months. The WYCI declined this week to 498.25¢/kg cwt, 35¢ below this time last year. The EYCI came close to breaking the 500¢ barrier last week but has since eased, currently reported at 466.50¢/kg cwt, 22¢ lower year-on-year.

Processor demand for EYCI-eligible cattle has provided an element of support in the east, however processor competition remains focused towards the finished end of the market. Trade steers show the largest spread, with East Coast prices reported at 291¢/kg compared to 248¢/kg live weight (lwt) in the west. Medium steers in the east are currently reported at 266¢/kg compared to 232¢/kg lwt in the west.