Feeder steers have begun to decline over the past fortnight, as worsening conditions continue to place pressure on the wider store market.
Cattle on feed rose to a record 1,146,500 head at the end of the March quarter, 2% higher than the previous record of 1,127,000 set in September 2018.
National feedlot capacity also set a new record, up 4% on the December quarter, at 1,363,000 head.
During the past 12 to 18 months, high feedlot utilisation (84% at the end of the March quarter) has supported national beef production through a challenging period. Consistent output of high quality grainfed beef has assisted the industry in maintaining valuable relationships with key export markets, particularly those in North Asia.
Feedlots have also played an important role in absorbing the excess supply of young cattle during the past year. With limited restocker competition a common theme in most regions, feedlot buyers have accounted for a large proportion of vealer and yearling sales. This has provided a level of price support for feeder suitable cattle, albeit in a downward trending market overall.
Turning to recent prices, feeder steers have begun to decline over the past fortnight, as worsening conditions continue to place pressure on the wider store market. However, grainfed over-the-hooks (OTH) indicators have remained strong, supported by sustained export demand and a weaker local currency.
Looking to March quarter cattle prices compared to year-ago levels, feeder steers followed the wider store market downward, while grainfed OTH indicators moved in the opposite direction, supported by sustained export demand and a weaker local currency.
Australian grainfed beef exports totalled 70,685 tonnes shipped weight (swt) in the March quarter, up 3% from the same period last year. Growth in quarterly shipments to China were a standout, lifting 77% from year-ago levels to 14,347 tonnes swt.
The China market has grown in importance to Australian grainfed exports in recent years, competing extensively for product with more traditional markets such as Japan and Korea.
Competition from an increase in US production, has also challenged grainfed beef exports to these markets. March quarter grainfed shipments to Japan decreased 8% year-on-year, to 32,958 tonnes swt, while volumes to Korea fell 11%, to 12,284 tonnes swt.
https://www.mla.com.au/news-and-events/industry-news/cattle-on-feed-at-record-highs/