Market Morsel: Restocker steers keeping pace

Market Morsel

Percentage price spread data across national cattle types shows how dominant young cattle and restocker steers are compared to other cattle types across the country. The black bar is where the spreads to the EYCI normally sit this time of year for each type of cattle and the grey shaded area is the normal range, or in other words where the spread has fluctuated for 70% of the time over the last decade. It gives the viewer an idea of how normal, or abnormal current spread levels are.

The Eastern Young Cattle Indicator (EYCI) just lifted back above 1000c/kg cwt in the last few days, but its not just young cattle that are performing well this season. As the restocker steer spread to the EYCI highlights they have been running at a much higher premium to young cattle than they normally would have all year. In a normal season you could expect the restocker steer/EYCI spread to sit between parity and a 10% premium, as outlined by the average seasonal trend and the 70% range. However, this year it has been averaging spread premium levels of around 14%.

In contrast the heavy steer spread has been trending below the normal range and well under the average seasonal trend all season. This is despite heavy steer prices achieving record levels and this shows how strong the EYCI move up has been, relative to other cattle types. Heavy steer spreads to the EYCI  can usually range between a 5% premium to a 15% discount. However, this season the spread has been averaging a discount of around 21%.