Cattle on feed growth continues

23 August 2017

Cattle on feed for the April – June quarter increased 72,597 head, or 7.1% from the March quarter, reaching the unprecedented level of 1,089,072 head according to the results of the ALFA/MLA quarterly survey.

An increase of numbers on feed was recorded in all states apart from Western Australia, which saw a decrease of 36% to 25,668 head.

South Australia again indicated the greatest percentage increase of 14%, up 4,371 head from the March quarter, closely followed by Queensland which was up 12%, or 69,694 head.

ALFA President, Tess Herbert said that the results from the June survey reflected an exciting period in the Australian feedlot sector and supported an underlying level of confidence in the grain fed production system.

“Supply chains are continuing to recognise the importance that the Australian grain fed beef production system plays in enabling brand owners to meet the demand for high quality beef every day of the week,” Ms Herbert said.

“This longer term confidence in the sector is reflected in the level of capital works and expansion projects underway commercially, which has resulted in overall feedlot capacity reaching an all-time record of 1.26 million head,” Ms Herbert said.

“The record number of cattle on feed and increase in capacity reported in this quarter’s survey reinforces the underlying confidence the sector is experiencing at the moment,” Ms Herbert said.

“Recent seasonal conditions have impacted cattle and grain prices over the period, further demonstrating lot feeders’ resilience to ever changing market dynamics.”

Ms Herbert said that despite these normal market dynamics, the upward trend of cattle on feed and investment in the sector illustrates the depth to which grain fed product and production system is embedded in the Australian beef industry, “The feedlot industry continues to demonstrate its ability to produce high quality beef that consistently meets customer’s expectations.”

Damon Holmes, MLA’s Manager of Data Intelligence, said that the national saleyard feeder steer indictor was buoyed in the first half of the 2016-17 fiscal year by historically high cattle prices, however, “Deteriorating seasonal conditions over the last couple of months, combined with a poor rainfall outlook has resulted in restocker demand subsiding somewhat and has put downward pressure on the cattle market,” Mr Holmes said. “This has seen more feeder cattle buyer activity within the store market.”

Mr Holmes also said that fiscal year grain prices averaged lower in 2016-17, on the back on high global production. “2016-17 represented Australia’s largest year of grain production on record,” Mr Holmes said.

“Wheat ex-Darling Downs averaged $238.29/tonne, while barley averaged $217.88, to both be 17% lower year-on-year and sorghum was 9% lower, averaging $230.77/tonne,” Mr Holmes said. “Similarly, wheat ex-Riverina eased 23% year-on-year, averaging $211.21/tonne and barley settled on $173.94 for the 12 month period, back 28%.”

 “More recently, the forecast decline in grain production has resulted in prices recovering somewhat, however this has been partially mitigated by decreasing livestock prices.”

- Ends -

 For more information, please contact:

Tess Herbert
President – ALFA
P: (02) 02 6859 2784

Damon Holmes
Manager, Data Intelligence – MLA
P: (02) 9463 9333