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CATTLE on feed across Australia for the September quarter decreased about 64,000 head or six percent from the June quarter, according to the results of the latest grainfed beef industry survey.

Despite the decrease, the numbers on feed still remain above the one million head mark at 1.025m, following the record-breaking levels seen in the June quarter.

The timing of the September 30 reporting period perhaps fails to capture even large falls that appear to have occurred across the feedlot sector since the arrival of widespread rain in October.

One of Australia’s largest multi-site lotfeeders told Beef Central last week it’s numbers on feed have fallen ten percent since pre-rain levels in September. Custom-feeders also report declining interest from producer clients facing green paddocks since the rain, and a number of smaller opportunity feeders in Queensland have said they plan to go into recess, until at least the second quarter next year, depending on summer rain.

Declines in feeding activity in the September quarter were seen in all states – some influenced by normal spring seasonal cycles, but others primarily by high grain prices impacting on profitability.

Queensland saw a decline of 30,000 head on feed to just over 597,000 head by September 30, while NSW dropped about 10,000 head to about 328,000 head. Victoria seeing the biggest percentage decline of 12,400 head or 19pc, followed by Western Australia, dropping 18pc, or 4700 head. Both states typically see seasonal declines coming into spring.

ALFA president Tess Herbert said while a slight decline in numbers was anticipated, cattle on feed over the million-head mark across Australia was a reflection of how integral feedlots now were to delivering consistent high quality beef to export and domestic markets in the current overall production and seasonal conditions. She agreed with Beef Central’s suggestion that December quarter figures could show an additional decline, as seasonal conditions improve heading into summer.

Forward price offers for slaughter February next year from Queensland grainfed processors are currently at 535c/kg for 100-day steers, a sharp rise on earlier offers. That paints a clear picture that processors anticipate tightening in supply of grainfed cattle from early 2018, following earlier rain.

Industry capacity figures expanded again for the quarter, with total capacity of 1.278 million head being recorded, reflecting capital works coming on line and continued investor confidence in the feedlot sector. An additional 7000 head capacity was commissioned last quarter in Queensland, and 5000 head in WA. Year-on-year, industry capacity has risen an additional 58,000 head.

MLA’s market intelligence manager Scott Tolmie said the national saleyard feeder steer indicator averaged 304.12¢/kg during the September quarter, 12pc or 42¢/kg lower than the June quarter, and back 19pc compared with the same period last year.

“Deteriorating pasture conditions across much of NSW and Queensland during the September quarter saw restocker buying activity ease due to limited rainfall. However, the availability of light weight stock through markets remained limited, with the herd rebuilding cycle still underway,” Mr Tolmie said.

Rise in grain prices

A decline in cattle prices in the September quarter was partially offset by grain prices moving in the opposite direction during the quarter.

Wheat ex-Darling Downs averaged $318.61/t, while barley averaged $308.46/t, an increase of 35pc and 40pc year-on-year, respectively, Mr Tolmie said.

Combined ex-Darling Downs grain prices average 22pc higher than the June quarter, as a result of well below average rainfall in most cropping regions in July and August negatively impacting winter crop yields.

The quarterly survey is conducted quarterly by the Australian Lot Feeders Association and Meat & Livestock Australia.

• See this morning’s companion story on South Australian shipped feed barley being unloaded this week at Port of Brisbane, to supply northern feedgrain and malting barley users.