The savage decline in the Eastern Young Cattle Indicator – now below its five-year average for the first time in more than two years – has attracted comment from Meat & Livestock Australia, seeking to put the trend into some context.

Currently the EYCI sits at 331c/kg, a decline of 17 percent on this time last year (399.75c), and 21pc below its January starting point this year. The market barometer is now at its lowest point in three years (see Beef Central’s home-page EYCI graph here).

MLA’s weekly report this morning says a run of dry months which has eroded restocker confidence, combined with reduced processor demand since October, has produced the EYCI decline throughout spring.

The EYCI commenced September at 374.75¢/kg, after reaching a 2012 peak of 419.25¢/kg in the first week of January. However a review of the performance of the EYCI during the spring months illustrated two clear features for the young cattle markets in the eastern states since 2002, the weekly bulletin said:

• The EYCI traditionally finishes the final week of November lower than the first week of September – averaging a decline of 7pc for 2002 to 2012. Indeed, the decline in the EYCI over this three-month period has occurred for all but two of the past ten years. In 2012, the price decline has been 10pc.

• The two years where the EYCI actually finished higher – late November 2010 (up 3pc) and 2011 (up 2pc) – were the two wettest years on record for eastern Australia.

This fuelled restocker demand for young cattle had prompted producers to retain numbers on farm to rebuild herds, while processors were forced to compete harder for a reduced supply of available cattle.

“Indeed, when looking at the trend over the past ten years and then isolating the EYCI increase registered in 2010 and 2011, it is clear that these years were the exception to the rule,” this morning’s weekly bulletin said.

The traditional decline between the first week of September and final week of November largely reflects seasonal conditions and producer intentions, with the warmer temperatures closer to summer reducing restocker demand and impacting quality.

Additionally, the influence of several failed springs and drought conditions throughout the past decade “had to be acknowledged” as a factor behind the decline, MLA said.

However, excluding the past two years when the EYCI increased, the average decline in the EYCI throughout spring was 9pc. The largest spring decline recorded since 2002 was 88c/kg in 2006 – predominantly due to very dry and unfavourable growing conditions.