WYCI and EYCI converge
03 September 2015
Cattle prices across Australia have surged since the beginning of the year. However, the increase has occurred to a greater extent amongst the eastern states, with the Eastern Young Cattle Indicator (EYCI) now in line with the Western Young Cattle Indicator (WYCI). As highlighted in Figure 1, this is the first time since 2013 the two have been within sight of one another.
The notable east-west spread in 2014 occurred at a time when Australia was turning off record numbers of cattle, however this was driven by the eastern states. In fact, in 2014 when national cattle slaughter was approaching levels recorded during the 1970’s beef crash, the WA kill was tracking sideways – in 2014 WA cattle slaughter was 420,000 head, about 27,000 head below the ten-year average.
Furthermore, while the rest of the country was exporting record numbers of live cattle, WA ports accounted for 280,000 head – about 23,000 head below the ten-year average and just 22% of the national total (in 2006 it was 50%).
Under the weight of unprecedented supply, eastern states young cattle prices averaged 55¢/kg cwt below their western counterparts in 2014. However, as eastern Australia cattle slaughter continues to slow and rain across NSW and south-east Queensland encourages restockers in the market cattle, prices have converged.
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