EYCI falls below 500¢/kg

The EYCI’s movements

After a strong rally from mid-2016 through to mid-2017, when the EYCI pushed above 600¢/kg carcase weight (cwt) and even breached the 700¢ mark for several weeks, the benchmark indicator returned to the 500¢ range, where it has remained for the last nine months.

The EYCI lost 60¢/kg from November 2017 (580¢/kg cwt) through to February 2018 (520¢/kg cwt), before receiving a boost following some significant rainfalls in the north at the start of March. This saw a 40¢/kg jump in the EYCI, to 560¢/kg cwt; however, the rise was short-lived, with the market trending downwards thereafter.

This week, at the close of Tuesday’s markets, the EYCI finished at 498.75/kg cwt – down 25.5¢ on the same time last week, 162.75¢ lower than where it was last year. The lack of decent follow-up rain in Queensland, and little to no rain across many supply regions of the south-east during the March quarter, has been a key factor in the indicator’s downward trajectory.

So far this year, although at a lower price level, the EYCI is following a similar trend to 2017. The early autumn uplift in the EYCI in 2017 was also due to a significant weather event – Cyclone Debbie – and the very wet weather across the east coast that ensued. However, a dry winter prevailed, which saw cattle slaughter levels remain elevated and prices steadily decline.

The forecast

At this stage, the Bureau of Meteorology outlook for the May–July period is not giving much away for what’s in store for much of southern Australia, with a mostly neutral outlook for late autumn and winter. The exception is western Victoria and Tasmania, where above-average rainfall is likely. The prospect of above average rainfall is 55–65% across parts of Queensland.