AUSTRALIAN feedlots once played a critically important role in drought mitigation for the broader beef industry, providing a ‘finishing paddock’ when times were tough.

Indeed many of the nation’s pioneer feedlots were built explicitly to feed cattle during drought cycles.

The industry history book, “Grainfed: The History of the Australian lofeeding industry” is riddled with references to the early feedlots filling production gaps, and providing shelter for cattle during periods of intense seasonal pressure, such as in 1965-66.

The alignment between feedlots and the traditional drought mitigation role is even reflected in Beef Central’s ever-popular Cattle Baron boardgame ($69+postage – click here to access), where players landing on a drought square can play a ‘feedlot insurance’ card (if they have one) instead of having to destock cattle from paddocks.

Changes in feedlot occupancy

One of the reasons feedlots could do this in the past was that they were often operating at sub-optimal rates of occupancy.

Here’s a couple of examples, drawn randomly from the industry’s own quarterly feedlot data:

• In the September quarter of 2009, feedlot occupancy was just 58 percent (743,000 head on feed, capacity 1.27m).
• Twelve months later, in September 2010, occupancy was 59pc.

That left lots of spare capacity when seasonal conditions turned.

But the point is, that over time, that latent capacity that was soaked-up during droughts has disappeared. In the March quarter this year, feedlot utilisation hit 90.3c (1.497m head, on capacity of 1.65m head). It’s been that way for much of the past three years.

Utilisation of pen space much above 90pc is considered difficult to achieve in commercial terms, because of maintenance down-time, pen cleaning and other activity.

Simply put, high feedlot utilisation is critical for most modern yards to remain viable, operators tell Beef Central. Fixed costs remain much the same regardless of whether a yard is running at 60pc or 90pc of its capacity.

The big swing to regular grainfed ‘program’ business driving large corporate grainfed beef brands is another part of the reason why most yards are now permanently full. Longfed Wagyu, where cattle can occupy a pen for 350-450 days or more, is also a factor.

Even states like Western Australia and South Australia, which have traditionally been variable in their summer/winter lotfeeding activity, are today much more consistently active.

The big question from all this is: In the absence of any spare capacity in the feedlot system, what happens the next time the industry faces a serious drought event?

Feedlot Cattle Staging Facilities

When Beef Central contacted the Australian Lot Feeders Association with questions about the above structural changes, we became aware that the grainfed industry has already gone a long way to finding solutions to these challenges.

Rather than relying on scarce vacant feedlot pens themselves, part of the solution has been in ‘staging’ drought cattle in areas adjacent to the feedlot-proper.

ALFA’s Christian Mulders

“At an industry level – we have been considering feedlot capacity limitations in exceptional circumstances during widespread drought,” ALFA chief executive officer Christian Mulders said.

“During drought herd liquidation, both feedlot and processor capacity can come under pressure. Staging of cattle outside of the feedlot for later entry into the yard can play an important role in assisting animal welfare, animal health and environmental benefits under these exceptional conditions,” he said.

Feedlot facilities themselves are specially designed with environmental controls and these are entrenched in design, development and regulatory requirements under the National Feedlot Accreditation Scheme. On the other hand, staging facilities – land adjacent to feedlots used sometimes for aggregating cattle prior to entry – have not traditionally been an area of focus for the feedlot industry.

Cattle held in such facilities, typically fed a mixed ration prepared in the nearby yard’s commodity shed and distributed to feedbunks, are not subject to the National Feedlot Accreditation Scheme requirements. Days spent on a ration in a staging facility do not contribute to the days needed in an NFAS accredited feedlot to meet certified grainfed beef requirements. Nor are they counted against the industry statistics gathered for the quarterly Grainfed Industry Survey and hence are not included in the ‘days on feed’ industry reporting function (more on this in a separate report next week.)

Best Practice Manual launched

As an industry committed to environmental management outcomes, ALFA has recently developed a Best Practice Manual for Feedlot Cattle Staging Facilities.

Funded by MLA using grainfed levies, the manual is designed to assist feedlot operators to pro-actively and effectively manage environment considerations in cattle staging facilities and

adjacent to feedlots.

The purpose of the manual is to provide examples and information about best-practice design and management for existing and greenfield feedlot cattle staging facilities, feedlots, and grazing systems.

The key focus of the document is the prevention of impacts to the environment, particularly in relation to the movement of sediment and nutrients, and salts from these areas. Best-practice principles have been identified from site visits, soil sampling, literature, research, and guidance from other countries or Australian livestock industries.

The use of staging facilities adjacent to feedlots have a number animal welfare and environmental benefits, the report suggests:

• Key Animal Welfare benefits, in terms of facilitating improved welfare outcomes in times of drought
• Key Animal Health benefits, in terms of acclimation, reduced health challenge, cattle performance and health on entry to feedlot.
• Key Environmental benefits, including ground cover management on extensive grazing system in times of drought.

“As the environment changes, the role of staging facilities is anticipated to become more evident,” ALFA’s Christian Mulders said.

“However its important to note that the manual is a best practice guide – it does not form part of the National Feedlot Accreditation Scheme requirements,” he said.

Feedlot role changing

While the feedlot sector still played an important role during drought, there was no denying that industry has evolved from a drought-mitigation tool, ensuring consistency and quality of supply in face of climatic variability, to a demand-driven sector supporting the range of beef brands that have evolved over the years, Mr Mulders said.

“As commercial meat brands have grown, become more sophisticated and brand equity has increased, demand for the feedlot sector to feed program cattle to specification has increased,” he said.

“This shift does pose the question, is there room for cattle in the event of a significant drought given program cattle occupancy and brand demand?”

Demand-led growth in the grainfed beef industry driven by investment in brands has supported the sustainable growth in the feedlot industry over time, he said.

“Record capacity growth is part of the story here. Over the past five years, national feedlot capacity has increased by almost 20pc, reaching a record 1.65 million head in March 2025. Cattle on feed also grew by 33pc over the period, hitting a new high of 1.45 million head. We are confident that this growth trajectory will continue.”

“On the journey ahead, like in the past, there will always be ups and downs in cattle supply in response to climatic conditions. Industry is very good at adjusting, and commercially working this out. The new Best Practise Manual is part of that process. This won’t change,” Mr Mulders said.

• To read the full Best Practise for feedlot cattle staging facilities report, click here.