Cattle sell-off pushes EYCI down to 453.25

Cattle market retreats as EYCI hits 453.25c


Stock and Land Beef
The Eastern Young Cattle Indicator (EYCI) has again taken an unwelcome dip on the back of too little follow-up rain to recent heavy but patchy falls in wide parts of eastern Australia.

The Eastern Young Cattle Indicator (EYCI) has again taken an unwelcome dip on the back of too little follow-up rain to recent heavy but patchy falls in wide parts of eastern Australia.

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The slide in the EYCI has continued at the start of this week hitting 453.25c by Tuesday night.

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The benchmark Eastern Young Cattle Indicator (EYCI) has continued on its recent roller-coaster ride, sliding by 22 cents on Tuesday to hit 453.25c a kg.

Little rain and higher saleyards throughput triggered a five per cent drop in the EYCI last week to 481c and the slide has continued this week.

The Eastern states cattle slaughter climbed six per cent last week compared with the previous week to 148,459 head.

Almost half the cattle were slaughtered in Queensland (up 11pc to 71,154) followed by NSW (up 11pc to 38,677) and Victoria (up 6pc to 27,658).

Clearly a major break in the drought is needed to stabilise the cattle market although the onset of winter will stunt pasture growth in many colder regions.

The Bureau of Meteorology's three-month outlook for April-June predicted most of Australia had a 50pc chance of exceeding median rainfall over the period.

BOM said Australia's major climate drivers, the El Nino-Southern Oscillation and Indian Ocean Dipole, were both neutral.

In its latest commodity outlook, Rabobank said above-average March rainfall, particularly in Queensland, had checked the drought-induced flow of cattle into saleyards and abattoirs.

But its senior analyst for animal protein, Angus Gidley-Baird, said more was needed to get herd rebuilding under way.

Restocking won't start in earnest until the major cattle regions receive a genuine break to the drought to  provide a boost to feed and confidence.

Restocking won't start in earnest until the major cattle regions receive a genuine break to the drought to provide a boost to feed and confidence.

"April and May rainfall will be critical, particularly for southern states, to build a feed base and generate any restocking demand that would sustain prices into winter," Mr Gidley-Baird said.

"February cattle slaughter (692,300 head) was up 14pc year-on-year. Female slaughter was up 30pc at 375,600 head making up 54pc of the total slaughter numbers.

"Exports continue to increase in light of higher production. Beef exports for March were 102,429 tonnes, up 13pc year-on-year, bringing the year-to-date volume up 11pc.

"China continues to be the standout market. Volumes to China were up 79pc year-on-year for March and year-to-date volumes are up 67pc.

"These volumes mean China has pushed past South Korea to become our third-biggest market," he said.

NAB Agribusiness economist, Phin Ziebell, said more rain would likely drive elevated restocker demand.

"Good rain would boost the EYCI but the dry autumn continues in southern Australia and elevated demand looks less likely in the short term," Mr Ziebell said.

NAB Agribusiness sees the EYCI staying below 500c in 2019 before recovering to around 500c/kg in the first quarter of 2020.

The story Cattle sell-off pushes EYCI down to 453.25 first appeared on Farm Online.

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