WYCI falls behind EYCI

The drying conditions in south west Western Australia has seen the Western Young Cattle Indicator (WYCI) dip below that of its Eastern States counterpart (EYCI) in the last fortnight, despite being at a premium for much of the first half of the year. Currently, the WYCI sits at a 14.75¢ discount to the EYCI, with the two indicators settling on 559.25¢ and 574¢/kg cwt, respectively. Driving the decrease was the swing from above-average rainfall during February and March to what was, in some regions, the driest autumn and winter on record.

Restockers, who typically pay a premium, have purchased less than 10% of young cattle in WA during July. Likewise, feeder buyers – who usually account for the majority of sales – have halved the proportion of the young cattle yarding they purchase. Another contributing factor is the greater number of pastoral cattle being consigned, as a result of the drier conditions further north of the state. For the year-to-date, pastoral cattle prices have averaged 28% lower than those selling to restockers, putting further downward pressure on prices.

Supplies of yearlings and vealers dropped away sharply following the late summer rainfall.  Saleyard throughput more than halved from January’s total of almost 13,000 head to 4,650 head in April, and yardings have hovered around this level since then. However, this has done little to support prices given the seasonal conditions.

Additionally, cattle numbers in WA are not at the historic lows seen throughout the eastern states. In fact, MLA estimates that the current WA herd size is approximately 2.3 million head, on-par with long term average of 2.2 million head. Meanwhile, Queensland isn’t anticipated to reach average herd size until 2021 while NSW and Victoria are expected to recover sooner, given average seasonal conditions.

Across the eastern states, below average herd numbers and the resulting limited supplies have kept prices buoyant. With WA maintaining an average herd, the market will largely depend on seasonal conditions over the coming months.