Confidence in grainfed system sees numbers on feed increase

27 May 2017

Cattle on feed for the March quarter increased 80,687 head, or 8.6% from the December quarter, to 1,016,475 head according to the results of the ALFA/MLA quarterly survey.

An increase of numbers on feed was recorded in all states, with South Australia indicating the biggest increase of 37%, or 8,117 head, followed by Western Australia with an increase of 21%, or 7,233 head. The survey also signified a rise of 14% in New South Wales, to 329,170 head.

ALFA President, Tess Herbert said that the results from the March survey reflected that feedlots are retaining cattle for longer and capitalising on the lower cost of grain. “With tighter cattle supply caused by herd rebuilding activities, cattle are being held on feed for longer periods which has seen the total cattle on feed tick over the 1 million mark this quarter”.

“Lot feeders are also capitalising on lower grain prices which continue to partially offset higher cattle prices, and are anticipated to remain low on the back of high domestic and global grain supplies,” Ms Herbert said.

Ms Herbert also said that the growing numbers of cattle on feed, and underlying capacity investment, continue to demonstrate the confidence in the grainfed system, “We are seeing the evidence of something that we have known for some time, that lot feeding is not just a drought mitigation tool, but an integral part of the beef supply chain, ensuring consistent quantity and quality of beef for brand owners and their consumers.”

Ben Thomas, MLA’s Manager of Market Information, said that cattle prices had eased slightly from the December Quarter, however the strong competition from restockers has seen cattle prices maintain their historically high levels. “The quarterly average for the domestic paddock feeder steer indicator averaged 346.69¢/kg lwt, up 11% from year ago levels,” Mr Thomas said. “The national saleyard feeder steer indicator remained unchanged compared to December quarter figures and also from year ago levels – averaging 337.15¢/kg.”

"Despite edging higher than the December quarter, ex-Darling Downs grain prices remained well below year-ago levels through the March quarter, “Wheat prices were 10% lower at $236/tonnes, while barley prices declined 12% to $211/tonne,” Mr Thomas said.

“Riverina wheat prices also eased 29% year-on-year, to $190/tonne for the quarter, while barley declined 31% to $161/tonne.”