News

Cattle on feed sets new record as dry bites

15 August 2018

Cattle on feed for the April – June 2018 quarter increased 94,777 head, or 9% from the March quarter reaching the unprecedented level of 1,120,459 head according to the results of the latest Australian Lot Feeders Association (ALFA) and Meat and Livestock Australia (MLA) survey.

An increase of numbers on feed was recorded in all states apart from Western Australia, which saw a decrease of 25% to 35,285 head. Queensland indicated the greatest percentage increase of 12%, up 67,962 head from the March quarter, closely followed by NSW and VIC which were both up 10%, or 30,924 and 6,643 head respectively.

ALFA President, Tess Herbert said that the unprecedented numbers of cattle on feed was due to the continued demand for quality Australian beef and the deteriorating seasonal conditions.

“Feedlots play a critical role in meeting consumer led demand for product quality, consistency and availability, no matter the seasonal conditions, however expanding drought conditions over the quarter has certainly contributed to feedlot cattle inventory reaching record levels,” Mrs Herbert said.

“All supply chain participants are being challenged under these conditions and with feedlots at 86% utilisation, even in the face of tightening commodity market conditions, it’s a reflection of good contingency planning and just how sophisticated and resilient lot feeding businesses have become.”

“Investor confidence in the feedlot production system continues to be reflected in the sector’s growing capacity figures which increased again this quarter to a total of 1,301,395 head.” Mrs Herbert said.

Scott Tolmie, MLA’s Manager of Market Intelligence, said that poor prospects for the winter cropping season elevated demand for grain and drove prices higher throughout the quarter putting pressure on lot feeders.

“Steady gains in grain prices were experienced with wheat ex-Darling Downs averaging $381/tonne, and barley averaging $383/tonne, up 16% and 17% on the March quarter and an increase of 48% and 58% year-on-year, respectively,” Mr Tolmie said.

“Over the hooks indicators remained relatively stable due to robust Asian demand with grainfed beef exports up 10% from the same period last year reaching a new quarterly high of 74,932 tonnes shipped weight (swt),” Mr Tolmie said.

“Strong export demand was experienced across traditional grainfed markets with shipments to Japan and Korea both up 8% year-on-year. Volumes to China lifted 74% from year-ago levels to 12,653 tonnes (swt) which for the June quarter saw China overtake South Korea to become Australia’s second largest grainfed beef market in volume,” Mr Tolmie said.

To view the Survey Results click here.

For more information:

Tess Herbert
President - ALFA
E: tess_herbert@gundamain.com.au
P: (02) 6859 2784

Josh McIntosh
Media Manager - MLA
E: jmcintosh@mla.com.au
P: (02) 9463 9198