The Eastern Young Cattle Indicator has risen to its highest level since it was launched to track the rolling seven-day average of saleyard prices for vealer and yearling cattle across the eastern States in 1996.
The commencement of new year sales has seen the EYCI rocket upwards by an unprecedented 66.25c/kg in two weeks to a record 442.25¢/kg cwt.
The previous benchmark was 428c/kg, set in December 2011.
What has driven it?
Limited supplies of cattle combined with renewed buying interest from restockers fuelled by good rainfall over Christmas.
The recent slide of the A$ has helped to improve the price competitiveness of Australian beef and veal in export markets already brimming with high demand.
So what does this all mean for producers who have cattle to sell, and how will the decisions they make affect the market going forward?
MLA’s market intelligence team says many producers will be in two minds over what to do now: should they offload and capitalise on the recent jump in prices in anticipation of it being short lived, or alternatively, use the improved feed conditions to further finish stock, in the hope prices will remain robust?
How those decisions play out cause some volatility in coming weeks as producers assess feed and water conditions, and the timeliness of follow-up rainfall.
Indicators for finished cattle have also climbed since sales recommenced two weeks ago.
The eastern states heavy steer indicator has risen 42¢ to 229¢, while the eastern states medium cow indicator (400-520kg liveweight, D3) jumped 48¢ to 196¢/kg cwt.
That is the highest the medium cow indicator has stood in more than 15 years of NLRS records.
Helping to drive cow prices up are continued high international manufacturing beef prices. 90CL beef to the US is currently attracting 243.5 US¢/lb CIF.
Added to that is the tight supply outlook for cows following the recent high female slaughter. Female adult cattle slaughter accounted for more than 50pc of the adult cattle kill in 2014, up from around 44pc in the herd rebuilding years of 2011 and 2012.
Tuesday’s Roma Store sale recorded the highest cow prices on the east coast on the back of strong export processor competition, with medium D3 lines averaging 213¢, while the same lines at Roma Prime and Dalby averaged 200¢ and 195¢/kg lwt, respectively.
At Inverell medium cows averaged 206¢ while at Wagga and Shepparton they averaged 185¢ and 187¢/kg lwt, respectively.
Over-the-hook prices followed suit, with Queensland medium cow prices jumping 44¢ from where they finished 2014, averaging 364¢/kg cwt.
Victorian over-the-hook medium cow prices increased 47¢, averaging 333¢, while in NSW they rose 20¢ to average 316¢/kg cwt. SA direct-to-works medium cow prices jumped 45¢, averaging 328¢/kg.
Strong start to Wodonga weaner sales
The annual Wodonga Angus feature sales saw around 8000 head of mixed-sex weaners yarded over the two days.
Useful rainfall across the eastern states over the New Year period ensured the market opened on a much stronger note than the previous year, with significantly dearer trends eventuating across all lines.
Quality was reportedly outstanding, with most lines presented in forward store conditions and carrying more weight than anticipated. Feeder and restocker buyers travelled from the Darling Downs, Goondiwindi, Dalby, Warwick, Killarney, Forbes, Walcha, Casino, Inverell, Narrabri, Dubbo and Tamworth. These northern buyers were the market drivers over the two days, frequently outbidding their southern competition.
Overall, weaner steers to restockers averaged $230 dearer year-on-year, with the heavy weights experiencing the best of the price gains – they averaged $854/head, or 238¢/kg. Weaner heifers returned to the paddock $159 dearer compared to last year, averaging $608/head, or 212¢/kg lwt.
Light feeder steers saw the best improvement, up $276 year-on-year, to average $774/head, or 226¢, while the medium and heavy weights were generally $215 better for an average between $881 and $963/head. Feeder heifers were mostly $208 higher compared to last year, with average prices ranging from $598 for the light weights through to $867/head for the heavy weights, or around 208¢/kg lwt. The top price was for a pen of heavy weaner steers weighing 420kg from E. C Seidel, Narrandera, purchased by lotfeeders at 1,020/head, or 239¢/kg lwt.
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