Cattle prices easing off of a record high

The Eastern Young Cattle Indicator has softened in recent days, easing down from a record high. But other factors could be tempering the impact of these dizzying highs.

Action at the Leongatha store cattle sale on Friday, April 23, 2021.

Cattle prices may have softened in recent days.

But the Eastern Young Cattle Indicator has been on a steady climb skywards since early 2020, continuously breaking price records.

Today the EYCI sits at 880c/kg, about 170c/kg higher than same time last year.

In the past 12 months, the EYCI price has lifted by more than 200c/kg, to sit above 900c/kg earlier this month.

An analysis by The Weekly Times shows a number of factors that have an impact on the dizzyingly high price for young cattle in Australia, including the strong Australian dollar, the inflation rate, and the effect of the weather.

And while the past year may have presented producers with a dramatic surge in pricing, it’s not the first time prices have rallied in such a strong manner.

A recent AuctionsPlus report noted several times in recent history where the EYCI recorded a sharp lift in value: a 45 per cent change in 1998-99; 39 per cent in 2000-01; 43 per cent in 2002-03; 36 per cent in 2009-10; a 73 per cent gain in 2014-15; and a 72 per cent rise in 2019-20.

INFOGRAPHIC: CATTLE PRICE GOES FULL CIRCLE (PDF)

Rural Bank Southern Victorian agribusiness manager Josie Zilm said for farmers, the strength of prices was helping to buoy confidence.

“ … as producers, it’s pretty exciting, it’s amazing. Everybody knows it’s high,” Ms Zilm said. “While I think it’ll stay strong because of the fundamentals with the national herd, it’s probably unsustainable at those levels (long term).”

According to Rural Bank, supply is set to remain tight this season, with the latest three-month rainfall outlook possibly dampening restocker demand.

Rural Bank has also forecast the EYCI may have hit its price peak and is expected to ease.

“If you’re a processor … I haven’t walked into the supermarket and thought I can’t afford to buy beef, so clearly there’s a disparity there,” Ms Zilm said.

Through winter, for fat cattle we expect the price to creep higher.

“The EYCI is for young cattle, people are looking at this for the long game. People wouldn’t be spending that much money … I think there’s a long-term plan, people are seeing through the cycles and remaining in the game.”

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