Feedlot numbers second highest level on record

Killara

Queensland and NSW have experienced challenging seasonal conditions resulting in more cattle moving into the feedlot production system.

Cattle on feed for the January – March 2018 quarter increased 52,506 head, or 5% from the December quarter according to the latest feedlot survey results released by the Australian Lot Feeders’ Association (ALFA) and Meat & Livestock Australia.

Total cattle on feed reached 1,025,682 head representing the second highest level ever recorded, and 12% above the five year average for this time of year.

Queensland experienced the greatest rate of change with an additional 42,782 head coming onto feed in Queensland feedlots; whilst more moderate increases were seen in South Australia (10,617) and New South Wales (3,483).

Small reductions occurred in Victoria (1,439) and Western Australia (2,937).

ALFA President, Tess Herbert said that the results were not surprising given the extended period of particularly dry weather for much of mainland south-eastern Australia over the quarter – the seventh-driest such period on record for that part of the country.

“Queensland and NSW have experienced challenging seasonal conditions resulting in more cattle moving into the feedlot production system,” Mrs Herbert said.

“The feedlot production system has cemented itself as an integral part of the branded beef movement, with a reputation for consistently delivering high quality beef to consumers. Despite the rise of branded beef programs it’s important to remember that our production system also plays an important role in managing variable seasonal conditions for the beef supply chain.”

“The winners are consumers of Australian beef who will continue to have access to consistent, high quality product despite the ongoing tough seasonal conditions,” Mrs Herbert said.

Scott Tolmie, MLA’s Manager of Market Intelligence, said that the poor seasonal conditions dictated a reduction in store cattle prices, an increase in feed grain prices, whilst prices for finished cattle remained stable.

“The prolonged lack of rain across south-eastern Australia increased destocking rates and subdued restocker activity which contributed to yarded cattle prices softening over the quarter. The national saleyard feeder steer indicator dropped 6% (17c) over the March quarter averaging out at 290¢/kg lwt,” Mr Tolmie said.

“The lack of moisture across the Eastern states added pressure to feed grain prices which increased 6% on the last quarter; following increased competition from graziers, lot feeders and grain traders all trying to secure tonnage. Wheat ex-Darling Downs averaged $330/tonne, while barley averaged $328/tonne, an increase of 39% and 55% year-on-year, respectively,” Mr Tolmie said.

“On a brighter note, the Queensland 100-day grain fed steer over-the-hook (OTH) indicator remained relatively stable only dropping 1% (5c) lower than the December quarter and averaging 501¢/kg cwt during the March quarter,” Mr Tolmie said.