Grainfed cattle numbers on feed have defied industry stakeholder predictions to show a nine percent decline, in the latest quarterly feedlot industry survey released this morning.

Results from the ALFA/MLA September quarter survey showed that while numbers fell by about 72,000 head compared with the June quarter, numbers were comparable with the corresponding September quarter last year.

As can be seen in the graph published here, and accessible in larger form at the base of this page, the September numbers on feed figure of 717,145 head fits within a band between 700,000 and 800,000 head, that the industry has operated within since around December 2008.

The graph also shows the big drop-off in feeding activity since 2006-07, when numbers peaked at around 950,000 head on feed. That shift occurred due to the extreme spike in feedgrain prices in 2007, followed by the onset of the Global Economic Crisis, and later still, the arrival of two or three consecutive favourable grass-growing seasons that diluted interest in lotfeeding as a finishing option.

Australian Lot Feeders’ Association president Don Mackay said the September quarter decline was predominantly driven by higher feed grain prices during the quarter, particularly in southern states, and continued sluggish export demand.

“Feed barley and wheat prices in the Riverina increased by 18pc and 34pc respectively over the quarter, while a resilient A$, US competition and continued difficult economic conditions in our major export markets stymied any chance for beef demand growth,” Mr Mackay said.

Higher feed grain prices largely reflected the impact of the ongoing drought on the US corn crop, with higher increases experienced in southern states as prices became more aligned with those seen in other parts of Australia.

Queensland went against the declining trend seen in southern states in the September quarter, posting a 28,000 head rise in numbers to 462,000 head. As reflected in Beef Central’s fortnightly feedlot breakeven, this was stimulated by lower feeder cattle prices at the end of the quarter, offsetting grain price rises.

“While Queensland yearling steers on average rose 2pc for the quarter, feeder cattle prices (particularly for lighter domestic cattle) declined in September, as drier seasonal conditions forced increased numbers onto the market,” Mr Mackay said in this morning’s release.

In contrast, numbers on feed in NSW, the second largest feeding state, crashed by 47,000 to 196,000 head in the September quarter. Victorian numbers also reflected a big slide, falling by 14,000 head to 37,000, while feeding in WA fell dramatically, by 22,000 head, to about 13,000 cattle on feed.

Feedlot pen space utilisation rates also reflect the big decline, reaching only 56pc across the Australian grainfeeding industry. While Queensland utilisation levels held up reasonably well at 73pc, all other states were considerably less than half-full: NSW sat at 47pc, Victoria at 39pc, SA 27pc, and WA, just 13pc.

Meat & Livestock Australia analyst Tim McRae said grainfed beef exports totalled 50,683 tonnes in the September quarter – 7pc lower year-on-year, driven by weak Japanese and Korean demand.

Grainfed exports to Japan fell 4pc year-on-year during the quarter, to 33,800t, while shipments to Korea were 23pc below year ago levels at 7776t.

“Unfortunately, the Australian dollar remained strong against the currencies of our major markets averaging US$1.04 over the quarter (1pc down year-on-year), flat against the Japanese Yen and 3pc higher against the Korean Won,” Mr McRae said.