Market Morsel: Keeping it real, man.
The Eastern Young Cattle Indicator (EYCI) closed at 896c/kg cwt today, hitting a new record nominal price high.
Using the consumer price index (CPI) level we can adjust all of the historic EYCI and young cattle prices we have on file to take into account inflation and calculate what young cattle prices have done since the 1960s in current dollar values, also known as real value terms.
The deflated EYCI shows that while we are at a record nominal price there have been a four times in the past during the 1960-1980s when young cattle prices reached above the current levels, in real value terms.
The long term deflated EYCI sits at 546c/kg cwt, as outlined by the black dotted line. The grey shaded 70% range shows that the EYCI has fluctuated between 388c to 705c/kg cwt for 70% of the time since the 1960s. The 95% range shows that movements below 158c or above 863c/kg cwt would be considered extreme.
The all time high for young cattle prices in inflation adjusted terms was 936c/kg cwt back in September of 1965.