February 19, 2008

Australia feedlot shrinking on high grain prices, strong dollar

Australia currently utilizes only half of its feedlot capacity due to high grain prices, the strong dollar and warm weather conditions in Japan, The Australian reports.

In the December quarter, the number of cattle in feedlots fell by 14 percent while a 36-percent reduction was seen last year, the Meat and Livestock Australia said.

Feed prices in Australia have escalated from around US$150 per tonne in 2005 to US$350 per tonne for most grains this year, making feedlots not profitable, observers said.

The US has also resumed limited exports to Japan where consumption has fallen as beef is mostly considered cool weather fare.