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Welcome return for the EYCI
11 June 2020
Key points:
- Competition between restockers and feeders strong as EYCI returns.
- Queensland contributed the largest number of EYCI eligible cattle in first week of June.
- Processors trade at a discount to both restocker and feeders for EYCI eligible cattle.
Following the cessation of saleyard reporting at the end of March due to COVID-19 containment efforts, the Eastern Young Cattle Indicator (EYCI) was back up and running last week as livestock market officers returned to the field. On Tuesday 9 June, the EYCI was reported at 749.25¢/kg carcase weight (cwt), up 271¢ year-on-year and 45¢ higher from 25 March, when the reporting hiatus commenced.
On the back of widespread rainfall throughout March, more than half of all EYCI eligible cattle were yarded in NSW, followed by Queensland. However, in the first week of June Queensland accounted for 52% of EYCI eligible cattle, with NSW easing to 34% and Victoria to 13%.
Compared to this time last year, the buyer breakdown for EYCI eligible cattle has remained similar despite the noticeable difference in seasonal conditions, albeit the volume of EYCI eligible cattle has declined. The store market continues to see strong competition between restocker and feeder buyers, with restockers purchasing 47% of EYCI eligible cattle in the first week of June, while feeders accounted for 45%.
Restocker competition has picked up significantly in 2020, particularly across southern states. Last week, restockers were operating at a 38¢ premium to feeders for young cattle in the eastern states. Although cattle on feed numbers have felt the pressure of heightened restocker demand and foodservice closures, feeder buyers have continued to compete strongly, trading at an average premium of 28¢ to processors last week.
Processors have faced increased competition on the back on improved conditions, with only 8% of last week’s EYCI eligible cattle purchased by processors, compared to 15% in the same week last year. Processors have been trading at a discount to both restockers and feeders for most of 2020, compared to the same time last year when processors were operating at an 11¢ premium to restocker buyers.
Looking ahead, demand from restockers seeking to rebuild depleted herds is expected to support the store market, in particular through winter and for young breeders.
© Meat & Livestock Australia Limited, 2020
