Cattle price driven to 762¢/kg cwt record

How high will cattle prices go?

That is the burning question many Australian beef producers and processors are asking as the national cattle value bulldozes into uncharted territory.

The Eastern Young Cattle Indicator catapulted to a record high when it hit 762¢/kg carcase weight yesterday to mark a 7.25¢ increase on Monday’s 754.75¢/kg cwt closing price.

It came after the EYCI passed its previous top of 725.75¢/kg cwt — set on August 17 2016 — after rising to 737.5¢/kg cwt on Tuesday last week.

Yesterday’s startling EYCI total marks a 370.5¢ increase year-on-year after the indicator was trading at 391.5¢/kg cwt on March 11 last year.

It also represents the national cattle market’s impressive performance over the past decade after the ECYI was valued at 344.5¢/kg on March 4, 2010.

The climbing value has been spurred by factors including the coronavirus outbreak, African swine fever’s ongoing impact on Asia’s pig population, and rainfall along parched east coast farming areas.

Rabobank senior animal protein analyst Angus Gidley-Baird said much-needed rain across the east coast earlier this year was a major factor in the cattle market hike.

“Widespread rain across many parts of eastern and northern Australia has stimulated producer activity, driving prices into record territory,” he said.

“Reflecting increased producer demand, saleyard prices lifted by more than over-the-hooks prices did, and lighter cattle, restocker and feeder weight cattle, saw bigger jumps than heavier finished cattle.

“With most of the country forecast to receive average to above-average rainfall over the next three months, we expect prices to remain elevated.”

Although the Eastern States cattle price has been above the WA value for more than a fortnight, the State’s cattle producers are still relishing strong demand.

The Western Young Cattle Indicator reached 682¢/kg cwt this week to record a 191.5¢ hike over the past 12 months.

It came as cattle sales at the Mt Barker Regional Saleyards last week were spurred by ongoing strong demand.

The Shire of Plantagenet-owned facility penned 1164 cattle last Thursday, with weaner steers making up to 390¢/kg.

Despite the EYCI trading above the WYCI, Mecardo analyst Angus Brown said WA’s cattle market was still positive. “In the west, cattle prices are not as strong, but the Western Young Cattle Indicator is still up,” he said.

“The discount to the east coast is probably not enough to see cattle flow east in great numbers yet.”

NAB agribusiness economist Phin Ziebell flagged the nation’s cattle market to remain dependent on favourable weather.

“Our price outlook for 2020 depends heavily on rainfall,” he said.

“With many areas still needing an excellent season to recover from drought, if anything there is more downside than upside for the EYCI at present.”