Questions are again being asked about the ability of the quarterly grainfed industry survey to accurately capture trends in grainfeeding operations, after the March quarter figures released this morning surprisingly suggested there has been only a 1 percent rise in numbers on feed since December.
The result has perplexed a number of large industry stakeholders contacted by Beef Central this morning, given the clear evidence of huge earlier inflows of cattle into feedlots due to seasonal conditions.
In the lead-up to today’s result, there was broad expectation that numbers would rise dramatically.
In Queensland’s case, numbers on feed have actually fallen by 18,000 head since December, the survey showed, reaching 470,000 head, despite being at the epicentre of the current drought event.
In NSW, the second largest feeding state, results showed feedlots increased numbers 17,000 head, to 239,000 head. Victoria was up less than 1000 head to 40,000.
“Ridiculous – totally inaccurate,” said one of Australia’s largest processors when told of the result filed this morning.
Substantial lotfeeder Charlie Mort, from Mort & Co was not so dismissive, saying many custom-feeding focussed Queensland yards had only really started to fill-up with drought cattle into April. He nominated Sandalwood, Opal Creek, Myola and Lemon Tree as examples.
That meant the March data had not captured the trend evident more recently.
“It will be a different story at the end of June,” Mr Mort suggested. “That will capture the real rise that has been going on in recent times,” he said.
In Mort & Co’s own Grassdale feedlot near Dalby, numbers at the end of March were a little lower than December, partly because some of the earlier intake cattle had started to close-out, and had not been replaced.
Australian Lot Feeders Association president Don Mackay himself admitted to being surprised at the low number delivered in the March result, but offered the rising price of grain, now about $300/tonne, and the flatness in the grainfed slaughter cattle market as contributing factors.
Nationally, today’s survey report shows numbers on feed at 799,000 head, less than 7000 head or 1pc higher than December.
ALFA suggested the surprisingly moderate result was predominantly the result of a decline in feeder cattle prices. Domestic C2 feeder steers, less than 330/kg liveweight averaged 179¢/kg or 19pc lower year-on-year, this morning’s report said. That’s in line with heavy feeder price trends recorded in Beef Central’s fortnightly breakeven calculation.
“The decline in feeder cattle prices reflected higher cattle turnoff figures due to drier than average seasonal conditions across parts of Australia,” the survey report said.
While the March quarter declines in feeder cattle prices were mainly felt in Queensland, the significant increases in grain prices on the Darling Downs largely offset any potential gains to lot feeders in that state, the report said.
Barley, sorghum and wheat prices on the Downs rose 52pc, 48pc and 45pc, respectively, year-on-year.
Meat & Livestock Australia analyst Tim McRae said grainfed exports for the quarter were up 10pc compared to the corresponding quarter last year, with the slight declines to Japan and Korea more than offset by increases to Europe, the Middle East and China.
“While grainfed beef exports to Japan fell 2pc year-on-year, and Korea 1pc, they increased in Europe (94pc), China (1427pc) and the Middle East (107pc) – albeit from a low base,” he said.
Given seasonal conditions have continued to deteriorate in the current quarter, and further declines in feeder cattle prices experienced, it is expected that cattle numbers on feed will increase again over this period, despite additional increases in feedgrain prices, Mr Mackay said.
Another unusual result filed in the March report was a whopping 65,000 head decline in feeding capacity in NSW, declining from 396,000 head in December last year to 331,00 head at the end of March.
National feedlot space utilisation also remained unusually low, at 67pc at the end of March.