​Grass fever drives cattle market in 2017

Grass fever drives cattle market in 2017


Beef Year Book
It had its ups and downs but the cattle market continued to travel at historically high levels through 2017. The Eastern Young Cattle Indicator (EYCI) is now sitting in the high 500c/kg and expected to hover there until Christmas.

It had its ups and downs but the cattle market continued to travel at historically high levels through 2017. The Eastern Young Cattle Indicator (EYCI) is now sitting in the high 500c/kg and expected to hover there until Christmas.

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Cattle market ups and downs this year.

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RESTOCKERS and their bouts of grass fever dictated the cattle market story for 2017, time and again driving prices above expectations to prove seasonality and the desire to rebuild numbers a more powerful influencer than the end-point downward pressure being exerted at a global level.

The year opened with a blistering cattle market fervour pushing southern weaner prices to “once-in-a-lifetime” levels that were labelled “outrageous” by some long-timers.

The continuance of the skyrocketing prices of the previous year, which had taken the benchmark Eastern Young Cattle Indicator (EYCI) to a record high of 725.75 cents a kilogram carcase weight in August 2016, was expected but not quite to the degree with which it arrived.

Southern calves, which were 30 to 40 kilograms heavier on average sold as much as 50 cents a kilogram dearer than the previous year at the big annual weaner events.

Many a northern buyer came away empty handed.

The heat in the market, stemming from the much-talked-about cattle shortage that promised to worsen through the year, was turned up even further by the fact southern finishing operations were oozing feed, grain prices were providing incentive for lotfeeders to increase capacity and a United States beef price rally before Christmas had given processors some incentive to get wiggling.

Of course, that rally proved short-lived and the overall story for meatworks buyers this year has been one of extreme caution with the global beef market far softer than it had been the previous financial year.

While all eyes continually watched for restocker demand to recede, competition for the ever-tightening supply of cattle kept prices well above longer term averages through autumn.

While the EYCI began a gentle three-month decline from February, cattle were still trading at levels that was causing consternation about the ability to turn a profit down the track.

For those who had been forced to destock due to drought on a very poor market, it was particularly frustrating and consultants were kept very busy weighing up risks, forecasts and opportunity costs on behalf of clients.

Come April, restockers again flexed their muscle at the saleyard in a big way, driving the young cattle market north on the back of the deluge across big breeding and growing regions of eastern Queensland and northern NSW.

That rain carried market momentum well into May – the time of year when prices seasonally decline.

It delivered a situation where prices were now are at such a high point in combination with uncertain prospects in terms of them staying there.

Big bank analysts at the time were forecasting an EYCI level of 500c/kg carcase weight by end of the year.

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