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Cattle above 1 million head despite challenges

Cattle on feed for the April to June 2020 quarter remained above 1 million to reach 1,010,192 head according to the latest results of the Australian Lot Feeders’ Association (ALFA) and Meat & Livestock Australia (MLA) survey.

While cattle numbers declined 7% nationally from March 2020, Queensland experienced an increase in cattle numbers on feed, with an additional 5,050 head or 0.8% increase, to 611,683 head.

All other states experienced reductions with New South Wales decreasing by 40,621 or 13.4%, to reach 263,489 head on feed, Victoria decreased by 13,032, or 18.6%, to 57,211 head, and South Australia decreased by 6,302, or 13.4%, to 40,714 head.

Western Australia recorded the largest percentage decrease, falling 22,496, or 37.7%, to 37,096, reflecting the seasonal nature of lot feeding in the state.

ALFA President, Bryce Camm, said improved seasonal conditions and its impact on cattle availability has been a key driver of feedlot production dynamics over the last quarter.

“Good rainfall in southern states increased competition and reduced availability of suitable livestock to feedlot buyers. While old crop prices eased slightly with the prospect of a good winter crop outcome, the combined factors of dearer cattle and relatively high grain price has impacted lot feeders’ decisions.”

“Whilst there has been a level of pressure on the feedlot sector, it’s encouraging for the cattle industry to see a number of areas currently experiencing improved conditions for cattle production and cropping.”

“National feedlot utilisation is back 8% in the June quarter to 70%, with all states recording declines from the March quarter, except for Queensland which remained relatively stable with the previous quarter.”

“Despite these challenges cattle on feed remains above 1 million head demonstrating the industry’s resilience and continued demand for high quality grain fed beef from our customers.”

“Long-term commitment and investor confidence in the feedlot production system continues with feedlot capacity increasing 2.5% on the March 2020 quarter to an impressive record of 1,432,989 head,” Mr Camm said.

Adam Cheetham, MLA’s Senior Market Analyst, said that while COVID-19 added a level of uncertainty in global markets there was sustained demand for finished cattle over the April to June period.

“Reduced feedlot turnoff generated solid demand for finished cattle with the Queensland 100-day grain fed steer over-the-hook (OTH) indicator reaching a record high at 670¢/kg carcase weight (cwt) in the last week of June.”

“Prices averaged 613¢/kg cwt for the quarter, in line with the March quarter and 7% above year-ago levels giving some relief to the challenges faced by the lot feeding industry.”

“Despite the uncertainty COVID-19 has had on overseas markets, Australia’s overall grainfed exports remained stable with the previous March quarter, totalling 78,076 tonnes shipped weight (swt) for the June quarter, back only 2% from year-ago levels,” Mr Cheetham said.

Click here to view the survey results and here to view statistics over time.


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