TOM'S MARKET MUSTER: Will the EYCI hit 750c/kg in 2025?
20 December 2024
What's ahead for Australia's livestock markets? Pic: AgriShots
An article by Tom Rookyard
2024 has come and all but gone, and Australian agricultures finds itself poised with opportunity. So with this in mind I thought I would offer some “bold and daring predictions” for 2025 to spark thought and conversation with a few things that could eventuate should conditions line up.
EYCI to 750c
First cab off the rank is one of the yardsticks for the Australian Beef Industry - Meat & Livestock Australia's Eastern Young Cattle Indicator (EYCI). Currently sitting at 668c (December 19), I predict that at some point in 2025, the EYCI will break through the 750c mark. This would be a 12% increase on the current position, but also would be a 115% increase since the cattle market crashed in 2023 and fell to a low of 349c on October 18, 2023. I see the 750c EYCI driven by two main areas.
First, a strong season and feed throughout large parts of Queensland and New South Wales. While South Australia, Victoria and Tasmania have had trying seasons in 2024; large areas of NSW and Queensland are off to a flying start to the 2024/25 season, which has already started to spark confidence for beef cattle traders and producers
Secondly the US Cattle industry is breaking records for strong prices. Dry conditions in 2023 has seen the herd fall to the lowest point since 1951, which in turn has driven prices sky high. This will provide a base for Australian processors and meat exporters.
Heavy lambs above 825c all of 2025
The second bold prediction is that the heavy lamb indicator will remain above 825c for the entire of 2025. In addition to the above factors, US beef prices have seen consumers looking at other proteins and Australian lamb has benefited, seeing record lamb imports into the US in 2024. Further to this, significantly high sheep and lamb slaughter should see supply hold prices high, putting lamb feeders set to be in the box seat.
Sheep flock to reduce
The third bold prediction is for the Australian sheep flock to reduce to 74 million in 2025. The flock has grown consistently year-on-year, since 2020 when the flock was at 64m head, to a peak at 78m in 2023. Since then, 2024 has record slaughter for both lambs and extremely high numbers for sheep, off the back of strong exports. MLA Industry Projections in September has the flock at 79m head in 2024 and then down to 76m head in 2025. However, with sheep slaughter above 2m head a quarter I feel that we could see a significant retraction in 2025. (Slaughter above 2m/head suggests the national flock is in liquidation, and further to that we have seen slaughter above 2m/head per quarter every quarter since December 2023). There has not been four consecutive quarters of sheep slaughter over 2m head on NLRS since March 2003, 21 years ago. Reductions of the sheep flock down under 75m will need to be driven by strong mutton prices, but there is a possibility it will happen.
Cattle on feed over 1.2m
The fourth bold prediction is for cattle on feed to remain above 1.2m head per quarter. The June Quarter for 2024 hit 1.4m head on feed, the highest ever on record. Cattle on feed in June 2000 was 672,000; in June 2011 the quarter was 792,000 head on feed, and then the March quarter 2017, was the first time in broke 1m. The lot feeding industry is growing, building and becoming more efficient coupled with the price factors above should aid confidence in 2025.
Australia to pick up US slack
My final bold prediction for 2025 is for beef exports to Japan to hit 130 million kilograms. Japan has been the number one grain fed-export market for the past 25 years. Couple this with the fact that Japan and South Korea have been the top two beef and veal export markets for beef and veal from the US. US Beef is not cheap at the moment either, in August-2024 the USDA Beef Retail was at 851c/lb – the highest it’s been since records started in 1970. Australia is set to pick up any orders the US cannot fill.
