Increase in feedlot capacity show of confidence in grainfed

feedlots-5

The recent increase in feedlot capacity is also a show of confidence in the grainfed system.

Cattle on feed for the December 2016 quarter increased 146,915 head, or 18% from the September quarter, to 935,788 head according to the results of the ALFA/MLA quarterly survey.

Greater numbers on feed were seen in all states, particularly South Australia which also experienced a 21% capacity increase.

NSW and Queensland also indicated increases of cattle on feed of 14% and 17% respectively on the September 2016 quarter.

The numbers were down, however, year-on-year by 6.2% from the record levels of the December 2015 quarter.

ALFA President, Tess Herbert said that the results from the December survey indicated a correlation with the seasonal conditions and tighter supply incentivising greater productivity through the feedlot sector.

“2016 closed with average carcase weights reaching a record high of 287.83kg/head as tighter cattle supply drove greater utilisation of the cattle that were available. This was achieved through favourable seasonal conditions but also greater utilisation of cattle on feed,” Ms Herbert said.

“Now we are seeing parts of Queensland dry and NSW drying off very quickly, whilst demand still remains for consistent beef supply despite some fluctuations in export markets. The jump in numbers reflect demand for the feedlot sector’s ability to provide a consistent quantity and quality of beef for our customers, irrespective of Australia’s variable weather conditions and cattle supply.”

“The recent increase in feedlot capacity is also a show of confidence in the grainfed system”, Ms Herbert said.

Ben Thomas, MLA’s Manager of Market Information, said that while the extent of the rise of cattle on feed was unexpected, low feed prices continued to assist the cost of gain.

“Despite recovering from September quarter averages, ex-Darling Downs grain prices remained well below year- ago levels in the December quarter, with wheat prices 22% lower on $225/tonnes, while barley prices slipped 27% to $198/tonne,” Mr Thomas said.

“Similarly, Riverina wheat prices eased 27% year-on-year, to $183/tonne for the quarter, while barley declined 32% to $158/tonne.”

Mr Thomas said that the fodder prices had followed a similar trend, “The quarterly average for Darling Downs cereal and lucerne fodder eased 27% and 23%, to $230/tonne and $345/tonne, respectively.”

Australian grainfed beef exports eased in the December quarter, down 7% from year-ago levels, “Grainfed exports totalled 64,290 tonnes swt, which took total grainfed exports for 2016 to 260,386 tonnes swt,” Mr Thomas said. “This eased 1% from record high exports during 2015.”

-ALFA

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