Diverging cattle saleyard and over-the-hook prices, combined with a rise in feed grain prices during the quarter, weighed heavily on feedlot margins.
Cattle on feed at the end of the December 2017 quarter declined 51,572 head (or 5%) from the September quarter, to 973,176 head, according to results from the latest ALFA/MLA lot feeding survey.
Compared to the same time last year, however, numbers on feed across Australia increased 4%.
- NSW increased 11% year-on-year, to 317,000 head
- Queensland declined 4% year-on-year, to 519,000 head
- Victoria advanced 23% year-on-year, to 65,000 head
- SA eased 4% year-on-year, to 21,000 head
- WA increased sharply on last year, to 50,000 head.
Cattle numbers on feed in Western Australia are often very seasonal and in previous years there has been significant lifts in the December quarter. Over the last five years, the average increase from the September to December quarter has been 70%.
Diverging cattle saleyard and over-the-hook prices, combined with a rise in feed grain prices during the quarter, weighed heavily on feedlot margins.
However, the proportion of Eastern Young Cattle Indicator (EYCI) eligible cattle (C2 and C3 yearlings and vealers sold through MLA reported saleyards in the eastern states) sold to feeders lifted during the quarter, accounting for 49% of total saleyard purchases. This was largely due to a reduction in restocker activity, with hot and dry conditions prevailing after the break in October.
Despite the national saleyard feeder steer indicator increasing during the quarter, it maintained an average identical to that of the September quarter at 304¢/kg live weight. Feeder buyers purchased EYCI eligible cattle at a 19¢/kg live weight discount on average, against their restocker counterparts during the December quarter.
December quarter highlights
- For the December 2017 quarter, Australian grainfed beef exports totalled 71,161 tonnes shipped weight, up 11% from the same period last year. Total grainfed exports for 2017 were the largest calendar year volume on record at 272,682 tonnes shipped weight, a lift of 5% year-on-year.
- For the December quarter, wheat ex-Darling Downs averaged $323/tonne, while barley averaged $317, an increase of 48% and 68% year-on-year, respectively (Profarmer).
- The national saleyard feeder steer indicator closed 2017 at 307¢/kg live weight, representing a 37¢ (or 14%) increase from where it finished the September quarter. Average to above-average rainfall in October encouraged stronger competition amongst buyers, driving cattle prices higher.
https://www.mla.com.au/news-and-events/industry-news/december-quarter-decline-for-numbers-on-feed/