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Why does the EYCI continue to climb?
29 October 2020
Key points:
- Southern Queensland yardings with the majority of throughput generate high prices
- NSW saleyards provide strong base for EYCI to surge
- Restockers continue to pay premium for young cattle
As the Eastern Young Cattle Indicator (EYCI) continues to move into record territory, reported at 822.50¢/kg carcase weight (cwt) on 27 October, it is important to understand the key drivers behind its significant rises in short time frames. While the theme of low supply and increasing demand is the overarching driver of price, the large fluctuations can be further explained by saleyard contributions, reflective of developing market dynamics. Single saleyards are having a greater impact on the EYCI as larger volumes are acquiring the highest prices.
Regardless of supply fluctuations this year, the indicator’s price has generally maintained an upward trend in 2020, indicative of strong demand. NSW has held the bulk of young cattle supply, with 50% of EYCI eligible cattle in 2020, as Queensland and Victoria have comprised 40% and 10%, respectively. However, the composition of saleyard throughput has changed slightly, with EYCI majority yardings now consistently commanding higher prices, particularly in southern Queensland. This has been a key driver of larger single price rises week-on-week, which are contributing to the total value of the EYCI.
Roma and Dalby saleyards have contributed 21% and 15%, respectively, of EYCI eligible cattle in 2020, with Roma contributing 17% in October, a decline on their yearly average. Reduced numbers at Roma this week have seen greater competition for a smaller supply pool of young cattle, which is also helping to lift the indicator’s price. For the week ending 27 October, EYCI eligible cattle in Dalby and Roma averaged 866¢/kg and 858¢/kg cwt, respectively, well above the EYCI’s record 822¢/kg cwt achieved on Tuesday. Across the past week, the EYCI has increased by 35¢/kg cwt, equivalent to 19¢/kg live weight (lwt). NSW saleyards have contributed to providing a strong base for the EYCI to find support, given continued southern restocker interest and limited availability of light cattle.
Seven day rolling average – Tuesday 27 October
EYCI – 822.50¢/kg cwt
Queensland – 856¢/kg cwt
NSW – 803¢/kg cwt
Victoria – 754¢/kg cwt
Restocker – 879.50¢/kg cwt
Feeder – 793¢/kg cwt
Processor - 752.50¢/kg cwt
© Meat & Livestock Australia Limited, 2020
