Cattle numbers on feed across Australia increased by 6 percent on the previous quarter and rose 10pc on the March quarter last year, according to results from the latest ALFA/MLA quarterly survey released yesterday afternoon.
Australian Lot Feeders Association President Jim Cudmore said lotfeeder margins eroded over the quarter as feeder cattle price rises, volatile grain prices and a strengthening A$ were not matched by increases in finished grainfed cattle rates.
“A very wet summer resulting in continued good pasture conditions across the eastern seaboard sustained prices for feeder cattle, with domestic feeder steers averaging 20pc dearer over the quarter than a year earlier, while the margin between grass and grain finished cattle was greatly reduced, he said.
The vast majority of the increase in cattle numbers on feed over the quarter was experienced in NSW though rises were also seen in Queensland, South Australia and Victoria. The rapid re-population of the 50,000 head Riverina Beef (formerly Rockdale) feedlot, near Yanco, alone, has contributed heavily to the result.
“The increase reflects the decline in feedgrain prices in the southern states in late 2010 due to the wet and prolonged winter harvest,” Mr Cudmore said.
“However, despite large domestic feed grain supplies, prices averaged around 15pc higher over the quarter in the Riverina and Darling Downs as world commodity markets reacted to some of the lowest US corn stocks to use ratios seen in decades.”
‘In-market’ beef prices rose 23pc in Australia’s major export market, Japan, however with business mainly written in US dollars this was largely offset by the higher A$.
“Year-on-year, the A$ appreciated 10pc against the US$, 9pc against the Korean Won while remaining somewhat flatter against the Yen,” Mr Cudmore said.
Meat & Livestock Australia’s manager for Market Information and Analysis, Tim McRae said grainfed exports to Japan declined 3pc year-on-year for the quarter, as already weak demand was further complicated by the series of catastrophes that struck the nation late in the quarter.
“Korea remained a bright-spot for the feedlot industry, with grainfed beef exports rising 37pc on a year earlier, even as US beef imports increased significantly. Korean beef buying reached almost record levels during the quarter, driven by an improving economy and higher pork prices,” Mr McRae said.
Overall, grainfed beef exports totalled 50,777 tonnes in the March quarter, back 1pc year-on-year and 10pc lower than the previous quarter.
* See analysis on this afternoon's survey results: "Rockdale effect bends feedlot numbers"