Young cattle: Prices soften after record highs

What goes up must come down. And after a year of sitting in record-breaking territory, the young cattle indicator is starting to soften. Here’s why.

The heat has started to come off young cattle prices in recent weeks. Picture: Chloe Smith.

THE heat is coming off the Eastern Young Cattle Indicator, with prices cooling 30c/kg over the past three weeks.

This follows an unprecedented season where young cattle prices have sat in record-high territory for much of 2020.

But the EYCI — which is sitting at 803.50c/kg — remains a staggering 323.03c/kg stronger than at the same time last year.

AuctionsPlus chief market analyst Tim McRae described the price decline not as a drop but as a “softening”.

“If you were to tell me, in most years, it had dropped 30c/kg you’d really dive into this,” he said. “But it’s dropped to be in the high 700c/kg range, and that’s still pretty good.

“Just a bit of heat has come out of the market, but it’s still a good price.”

Rain across Queensland last weekend could signal the beginning of a wet summer for producers north of NSW, which could see big chunks of Queensland commence a herd rebuild.

But Mr McRae said with the traditional Christmas closure of sales, where prices would be in the New Year was unknown.

“Going into the Christmas-New Year period, we don’t see sales, the EYCI isn’t reported … and so much can happen, there could be a big shift in what sentiment for the industry is,” Mr McRae said.

Meanwhile, at store sales across Victoria last week, prices reflected the softening indicator price. At Euroa, while the market lost some of the intensity seen in recent weeks, an opening pen of weaner heifers weighing 375kg made returns of about 426c/kg.

Rural Bank regional manager agribusiness Josie Zilm said it was unlikely prices would significantly fall anytime soon.

“(Given the size of the nation) herd; seasonal conditions, it would take another drought for (the EYCI) to crash,” Ms Zilm said.

However, she said the peak of cattle prices may have passed. “We’re still nationally at a low herd number, there’s still some way to go before we’re back at high numbers, and it’ll take a number of years to get there.

“I think there’s still some way to go — maybe we will not see prices at what we have seen … prices are still underpinned by restockers going forward.”

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