Grainfed cattle numbers show strong 9pc surge, survey reveals

Jon Condon, 20/08/2013


There was a dramatic but widely-anticipated nine percent rise in cattle numbers on feed in the latest June ALFA/ MLA quarterly feedlot survey released yesterday.  

Numbers on feed across Australia have climbed to 873,000 head, influenced heavily by the impact of drought across large areas of western and northern Queensland, NSW and the NT, forcing producers to place cattle on feed as a finishing strategy, or sell cattle cheaply.

For the previous three years, feedlot numbers have fluctuated within a narrow band between 700,000 and 800,000 head, marking this latest figure as a substantial movement, and the highest activity recorded since the June quarter in 2006.

Australian Lot Feeders Association president Don Mackay said the quarterly survey result for the period ended June 30 resulted from a decline in feeder cattle prices as producers in several states destocked due to dry to desperately dry seasonal conditions.

“Feeder cattle prices started the June quarter with a continuation of the easing from the March quarter, before bottoming out in mid-May, and then recovering through June,” he said.

This price cycle has been clearly captured in Beef Central’s regular fortnightly grainfed trading budget, due to be compiled again soon.

The yearling steer (330-400kg liveweight) category averaged 167¢/kg for the quarter, back 5pc from the March quarter and 16pc year-on-year.

Reflecting the worst of the drought impact, Queensland feedlot numbers showed the largest rise last quarter, lifting 11pc to 523,400 head. It was the highest number on feed recorded in Queensland for two years, as dry conditions since early this year in the Northern Territory and the Western parts of the state led to higher turnoff.

Increases were also recorded in Victoria (26pc), South Australia (8pc) and WA (39pc) due to cheaper feeder cattle and/or grain -particularly when compared to the more northern states.

NSW lotfeeders were unable to take advantage of cheaper cattle from Queensland and the NT due mainly to transport costs, ALFA’s report suggested, with numbers unchanged at 240,000.

The strong rise in feeding activity in Queensland was also reflected in utilisation of available feedlot space, which increased to 83pc last quarter, from 71pc the quarter before.

In commercial terms, ninety percent capacity is considered to be effectively 'house full,' due to pen cleaning, maintance, individual pens not used to optimum capacity, and other issues. Nationally, utilisation of available feedlot space rose to 73pc, from 67pc three months earlier. 

Rises in feedgrain prices dampened further increases in cattle numbers on feed, particularly during the latter part of the quarter, with Darling Downs barley ($298/tonne), sorghum ($283/t) and wheat ($297/t) year-on-year prices up 49pc, 57pc and 39pc respectively.

Reflecting the lack of profitability in lotfeeding operations in recent times, influenced partly by these higher grain prices, overall feedlot capacity in Australia has declined by 75,000 head over the past 12 months, to 1.19 million head.

Much of that decline can be interpreted as smaller (less than 500 head, and 500-1000 head) 'opportunity' feedlots going into voluntary suspension under the National Feedlot Accreditation Scheme process.  A turnaround in lotfeeding fortunes would likely see those smaller lots re-activate, however.

Meat & Livestock Australia’s chief analyst Tim McRae said grainfed exports for the quarter were up 8pc compared to the corresponding period last year.

Total grainfed exports for 2012/13 were 198,000 tonnes, up 2pc year-on-year, and 5pc on the five-year average. Declines into Japan (back 6pc and Korea (-1pc) more than offset by significant increases to the EU and China (up 82pc and 429pc respectively).

  • Readers should not that the quarterly survey result is not an average of feedlot activity across the quarter, but a single 'snapshot' of lotfeeders' circumstances on June 30.





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