As worsening drought conditions force more light cattle into saleyards the Eastern Young Cattle Indicator has fallen to its lowest level in almost four years.
The EYCI closed yesterday at 437.25c/kg carcase weight (cwt), the lowest level since April 2015. (See Beef Central’s earlier article documenting the EYCI trend last Friday)
The EYCI has fallen 70.75c in the first two months of 2019 and currently sits 18pc below year-ago levels due to the destocking pressure and a broad lack of restocker interest.
*EYCI eligible cattle are vealer and yearling heifers and steers, C muscle, 2 or 3 fat score, 200kg lwt or greater, from saleyards across Queensland, NSW and Victoria.
Meat & Livestock Australia’s market intellience unit says that by analysing muscle and fat scores for young cattle, it has effectively quantified the increased numbers ‘poor conditioned’ cattle now entering saleyards.
For the purposes of the analysis, ‘poor conditioned’ young cattle include vealer and yearling steers and heifers in either E1, E2, D1 or D2 condition, excluding dairy cattle. EYCI eligible cattle must be in C2 or C3 condition.
MLA says the use of this wider scope paints a clearer picture of what’s happening in the current market.
Of all young cattle sales in 2017, 5.8pc were in the ‘poor condition’ category and did not meet EYCI eligibility.
In 2018, this proportion rose to 15.3pc as seasonal conditions deteriorated.
This trend has continued into 2019, as 17.7pc of young cattle in saleyards covered by the National Livestock Reporting Service have been below EYCI condition specifications.
While the number of poor conditioned cattle has increased, the difference in price between the two sub categories has also widened.
In 2017, the average discount between poor conditioned young cattle and EYCI eligible cattle was 47c/kg cwt. In 2018, the deficit rose to 64c/kg cwt.
So far in 2019, poor conditioned offerings trade on average 98¢/kg cwt below those that fall into the EYCI specification.
*Poorer condition score cattle are vealer and yearling heifers and steers, D or E muscle, 1 or 2 fat score, 200kg lwt or greater, from saleyards across Queensland, NSW and Victoria.
Despite there being more young cattle falling outside the EYCI category in 2019 compared to 2018 and 2017, the supply of EYCI cattle has remained firm as the young cattle destocking continues and many producers run low on feed and water.
Source: Meat & Livestock Australia. See MLA’s interactive market information tool.