The amazing “hot-air balloon” young cattle market

The amazing run of the young cattle market, which commenced in early 2020, continues to astound sellers, frustrate buyers, and confound market watchers. From unprecedented, to unrelenting, with more highs than a Byron Bay music festival, the path of the cattle market since drought breaking rains has looked like a mountains stage of the Tour de France.

From the immediate market response in early 2020, which saw prices surge after the devastating drought, through to the once-in-a-generation prices in recent months, the rise from January 2020 has now exceeded all expectations. While searching for a new way to describe the market, I settled on the “hot-air balloon” young cattle market. That is, every additional dump of rain in 2021 seems to act like another squeeze of the gas burner…feeding more “hot air” into the market, pushing it higher and higher.

With the EYCI more likely to hit 1100c/kg, than 900c/kg in the coming weeks, the scale of the rise in the market has been truly phenomenal. What has been just as noticeable in the online market has been the lack of upper price restraint from buyers, keen to secure young cattle “at any cost”.

Now at some stage, the gas runs out, leaving the balloon to slowly make its way back to earth. The same can be said for the young cattle market. At some stage, this market will start to fall back to earth. But the big question is when and where? While not a ballooning expert by any sense, they are apparently very difficult to navigate, with the wind doing most of the driving. Similarly, for the young cattle market, given that it is largely the season that has directed it so far, it will be the season that does the driving in 2022. Producers can influence it slightly by leaning one way or another…but ultimately, the invisible market winds will determine where it lands.

However, one thing will be for sure. Regardless of when, where and how “it” lands, many producers will have enjoyed the ride.