March quarter cattle on feed numbers remain above 1M, despite margin squeeze

Beef Central, 14/05/2021

CATTLE on feed across Australia for the March quarter remained above million head, despite declining by 43,271 head or 4pc from the previous quarter, according to the latest results of the Australian Lot Feeders’ Association and Meat & Livestock Australia survey.

Numbers remained almost 83,000 behind March last year, when cattle on feed were still coming off record highs, due to the impact of drought. Smaller opportunity-style yards showed the biggest year-on-year decline, falling 27pc to 8763 head.

In a state-by-state breakdown, Queensland, New South Wales and South Australia all recorded reductions in numbers on feed last quarter. Queensland decreased by 46,516 head or 7.9pc to 542,176 head (about 54pc of the national total); NSW by 2324 head or 0.7pc to 311,957 head; and South Australia by 5690 head, or 13.5pc to 36,526 head.

Following a normal seasonal pattern, Western Australia increased by 10,480 head or 22pc to 56,782 head and Victoria increased by 1.4pc to 57,594 head.

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ALFA president Bryce Camm said the decline suggested the pressure on feedlot margins driven by herd rebuilding activities and sticky commodity prices were having an impact.

On the input side, ferociously strong competition for feeder cattle lifted the national feeder steer indicator 7pc on the previous quarter and 27pc up year-on-year levels, reaching a 446¢/kg liveweight average.

“Commodity prices remained sticky, with wheat ex-Darling Downs prices holding firm, up 1pc from the previous quarter to average $305/tonne. Barley averaged $272/t and was up 4pc on the previous quarter,” Mr Camm said.

There was some relief on the sell side, with the Queensland 100-day grainfed steer over-the-hook indicator reaching a record quarterly average of 677¢/kg carcase weight.

The overall pressure on feedlot margins is reflected in national feedlot utilisation which declined to 69pc for the March quarter, well below the five-year March quarter average of 80pc, Mr Camm said.

“Despite the current challenges, confidence in the long-term outlook remains high with national feedlot capacity increasing to a record level 1.45 million head this quarter,” he said.

“With cattle numbers on feed remaining over the million head mark, it continues to demonstrate the importance of grainfed beef production to the wider red meat supply chain’s ability to deliver consistent quality and quantity beef to market,” Mr Camm said.

MLA Market Information Manager Steve Bignell said as the national herd rebuild gains momentum, grainfed cattle were making up an increasing proportion of turn-off and beef production.

“The grainfed sector has been critical in underpinning continued supply of Australian beef during a period where producers are retaining more cattle,” he said.


Source: ALFA, MLA











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