EYCI at 1015 in a rare sideways move

However, there are plenty of signs in the solid fundamentals of the beef job that the $10-plus Eastern Young Cattle Indicator levels will be revisited, and probably on several occasions, in the next five years.

So say analysts, agents and experienced cattle producers as the EYCI moves sideways this week for the first time in months.

Indeed, sideways movement in the cattle market, across all categories, has been rare all year.

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At the end of trading yesterday, the EYIC was at 1015 cents a kilogram carcase weight, up 38c in a week and 75c over four weeks.

In the past week, it pushed above the year-ago level for the first time since mid-July.

The clash of tight yardings and restockers returning to the party has driven the spike. Restockers are now taking just under half the EYCI-eligible cattle on offer and paying a sizeable premium - 1073c/kg compared to the 965c/kg average that feedlot buyers paid.

Agents and analysts said the rebound had to happen, given the big dip was 'overdone' and in part led by hysteria around foot and mouth disease.

But it will be short-lived and further price falls are expected from late November, with prices bottoming out in May next year, according to Global Agritrends analyst Simon Quilty.

"Cattle prices are expected to hit the biggest low during 2024/25 but will still be at a rate we'd call livable," Mr Quilty said.

"Global markets are firm; so it will be a soft landing."

Mecardo analyst Adrian Ladaniwskyj said while the rapid uplift in the price of key indicators such as the EYCI was encouraging, sufficient transaction volumes were not there to suggest it would be sustainable.

"Overall, many producers still seem to be holding back, which is providing support to the market," he said.

"It's time to do your sums on what the expected benefit from holding cattle longer to cash in on the weight gain will be and determine where your break-even point is the event of a fall in the market - and think about how much risk you are comfortable with."

Mr Quilty said a significant challenge with market forecasting at the moment was labour issues in Australia.

"These have plagued processors for more than two years and are not getting much better in the short term," he said.

"So as the cattle herd and sheep flock expands, it won't be easy to maintain livestock prices if the livestock cannot be processed quickly enough."

Processors report the labour struggle is forcing them to operate well below capacity.

JBS's Jason Carswell said labour was certainly the main daily concern at his company's processing plants.

"COVID has hit us again right now but we continually struggle with labour, as is everyone" he said.

"We are continually training new people, but as we train ten, five leave - there is a big turnover battle."