THE price of Australian young cattle continues to gallop upwards, closing Thursday's markets at 513 cents a kilogram, up 177c on the same time last year (336c/kg).
Just over a week after the Eastern Young Cattle Indicator (EYCI) broke past the mythical 500c/kg barrier, reaching 501.50c/kg (carcase weight) last Wednesday, the records have tumbled every day this week. June 17 was the first time the EYCI had surpassed 500c since reporting commenced in 1996.
Yesterday the EYCI closed at 509c/kg, having hit 507.5 the previous day.
Earlier this week, dearer markets right across the eastern states kept forcing the indicator up, helped by a reduction in the supply of yearling and vealers spurred on by rain in the past fortnight.
National Livestock Reporting Service (NLRS) figures indicate all major Monday markets were at least 10c/kg dearer for young cattle.
Dubbo's sale in NSW led Thursday's price charge, with yearlings and vealers averaging 562c/kg, indicating there's still room for the EYCI to rise even further. At Bairnsdale, Victoria, average prices hit 533c/kg.
Riverina Livestock Agents director James Tierney, Wagga Wagga, described the market earlier this week as "very expensive".
"There were no gaps in the market and everything was dearer right across the sale," he said.
"Who knows how much higher prices can go - that's anybody's guess."
Mr Tierney estimated the best of the cattle going to slaughter were making as much as 570c/kg early this week.
"We also saw a lot more activity from northern NSW restockers and the feeder type cattle were quite a bit dearer," he said.
NLRS operations manager Damon Holmes noted that while a good lift in prices was usually expected after rain, what made the rapid jumps unique was significantly fewer cattle entering the market.
The intent for many producers to hold onto stock if possible was certainly expressed, he said.
"Combined with a slight slowdown in eastern states indicative cattle slaughter, the trend may mark the start of the very long-awaited contraction in cattle numbers entering the market, which should continue to support prices.
"While the recent rainfall is only the beginning of what will be required to take many drought stricken areas out of such conditions, it is a good start, and has boosted buyer confidence."
Supply will be the big key for the next two years, Mr Holmes said.
Analysts have tipped if rain settles in to benefit more producers across Australia's struggling north-east, the EYCI has the potential to climb as high as 600c/kg (cwt).
Feedlots, rather than restockers, are now dominating the trade as they snatch up available stock.
“From a historical stand point, restockers are the ones that buy the lighter lines and they pay a premium to the EYCI on average,” said Mecardo market analyst Augusto Semmelroth.
Therefore, there was scope for restockers to drive the indicator higher still, just as soon as there was widespread rain.
In fact rain was still dictating confidence and decision-making for a lot of producers and continued to buffer local prices from higher global values.
- with Karen Bailey & Andrew Norris
