Continued dry drives cattle on feed to record levels
Cattle on feed for the January – March 2019 quarter increased 34,874 head, or 3.1% from the December quarter to record level of 1,145,563 head according to the results of the latest Australian Lot Feeders’ Association (ALFA) and Meat and Livestock Australia (MLA) survey.
An increase in numbers on feed was recorded in Queensland, South Australia and Western Australia. Queensland increased by 22,242 head, or 3.5%, to 653,528 head, South Australia increased by 9,727, or 24%, to 50,166 head and Western Australia increased by 12,887, or 33%, to 52,355 head compared to the December quarter. New South Wales and Victoria experienced a decrease in numbers on feed, down 2.3% and 3.6% from the December quarter to 318,941 head and 70,572 head respectively.
ALFA President, Bryce Camm, said that the number of cattle on feed continues to be influenced by dry conditions coupled with strong demand for high-quality Australian beef.
“The record level of 1,145,563 cattle on feed for the March 2019 quarter was driven by an unfavourably dry summer resulting in more cattle moving into the feedlot production system,” Mr Camm said.
“Licensed capacity also reached a new record of 1,363,046 head, up 70,376 head year-on-year, suggesting strong investor support for feedlots and their ability to deliver consistent high-quality Australian beef to our global customers,” Mr Camm said.
“The record capacity and cattle on feed number, despite being faced with very challenging seasonal and climatic conditions, indicates how resilient lot feeding businesses have become and the important role they play in meeting our customer’s needs,” Mr Camm said.
Scott Tolmie, MLA’s Manager of Market Intelligence, said that severe weather conditions culminated in a large-scale destocking event beginning in late February, with feeder steers falling to a four-year low of 232¢/kg lwt on 12 March.
“A rain led recovery resulted in feeder steers ending the quarter at 280¢/kg lwt, just 1% below the beginning of the quarter,” Mr Tolmie said.
“Lot feeders experienced some slight grain price relief during the quarter, albeit from a very high base, with wheat ex-Darling Downs averaging $430/tonne and barley averaging $393. These prices are still an increase of 30% and 20% year-on-year, respectively, and remain considerably elevated when compared to global indicators,” Mr Tolmie said.
“Notwithstanding the volatile growing conditions domestically, global demand fundamentals remain strong for high quality Australian grain fed beef reflected in the Queensland 100-day grain fed steer over-the-hook indicator increasing 9% year-on-year in the March quarter to average 554¢/kg cwt,” Mr Tolmie said.