CATTLE numbers on feed and feedlot capacity across Australia continued to surge to new record levels in the latest quarterly grainfed industry survey released today.

The June quarter saw numbers on feed reach a new record of 1,418 million head – 64,000 head or five percent higher than the previous record set in the March quarter.

Numbers on feed in June were up 162,000 head on this time last year.

Regionally, the biggest contributors to growth were Queensland, which grew by almost 51,000 head over the past quarter to a new record 853,439 head, and NSW, where numbers grew another 20,000 head to 385,127 head. South Australia lifted numbers by 4000 to 69,700, while small declines were seen in Victoria and Western Australia.

The biggest contributor to national growth last quarter was feedyards 10,000 head or larger in size, up another 46,000 head on March quarter figures. Small yards up to 1000 head showed only marginal growth compared with the March quarter, but significantly more than this time last year.

Capacity

Total feedlot capacity also continued to grow during the June quarter, growing by another 43,000 head to reach a new record of 1.637 million. The trend, driven primarily by expansion in long-established feedyards rather than new facilities being built, was captured in Beef Central’s Top 25 Lotfeeders report published earlier.

Again, Queensland dominated growth in capacity expansion, lifting another 42,000 head to 930,365 head, or 57pc of the national total. Capacity was virtually unchanged from the March quarter in NSW and Victoria, while South Australia added another 8000 head, and Western Australia slipped 6000.

Feedlot utilisation remains high, by historical standards, at 86.6 percent – the second highest on record. With pen cleaning, maintenance and other requirements, a figure of 90pc utilisation is widely considered to represent full to commercial capacity.

The quarterly feedlot survey published by the Australian Lot Feeders Association and Meat & Livestock Australia, using a statistically reliable sample of feedlots of various sizes and locations.

Australian Lot Feeders Association president Barb Madden said confidence in the feedlot production system and continued positive trading conditions coupled with increased feedlot capacity were behind the latest expansion trend.

“Feedlot capacity is an enabler of growth in the number of cattle Australia can have on feed. National capacity increased in the June quarter as more than 43,000 additional available cattle placements came on line under the National Feedlot Accreditation Scheme,” she said.

“This indicates that the Australian feedlot sector’s capacity has grown by five percent year-on-year and is the first-time capacity has exceeded 1.6 million head.”

“Favourable trading conditions during the June quarter gave feedlot operators confidence to fill pen space, with the number of additional cattle on feed increasing by more than 63,000 to break 1.4 million head for the first time.”

“The record numbers experienced in the June quarter tells us that confidence in Australia’s grainfed beef production system remains high, and our feedlot sector continues to go from strength-to-strength,” Mrs Madden said.

Click on image for a larger view

MLA’s senior market information analyst Erin Lukey said feeder steer prices remaining low on long term averages and elevated demand for grainfed beef on the global market had provided a stable base for lotfeeders during the June quarter.

“Throughput of steers through MLA’s National Feeder Steer Indicator lifted again in the June quarter and remained 22pc above the same quarter last year,” Ms Lukey said.

“At the same time, prices have eased 2pc to a national average of 323¢/kg. Queensland, as Australia’s largest lot feeding state, was the biggest driver of this, with supply up 23pc on the previous quarter, and prices easing by 8%,” Ms Lukey said.

Note annual seasonal volatility in southern states. Click on image for a larger view

Record grainfed exports impact by growing US trade

Australian processors and exporters have been exporting record volumes of grainfed beef over the past 12 months, supported by global demand. June quarter export statistics show Australia exported our largest volume of grainfed beef on record, tipping 90,500 tonnes – 15pc above the five-year average.

“Japan, China and Korea remain strong as Australia’s leading grainfed export market destinations. While supply through to China eased 8pc, this was coming off strong previous quarters,” Ms Lukey said.

“The increase in demand for grainfed beef from the United States cannot be ignored.  Exports to the US lifted 25pc on last quarter to 2900 tonnes, sitting at nearly double the long-term average. The US has been in a destocking phase for five years and will remain in an extended recovery period,” Ms Lukey said.

Access into the US and competing markets such as Japan and Korea will continue to support Australia’s grainfed industry over the coming quarters, as the US supply remains contracted,  she said.

Lower US grainfed exports into Japan and South Korea are also creating additional opportunity for Australia.