February 19, 2014

 

 

Australia has kept cattle on feed numbers at a high level reaching a total of 810,000 head driven by drought-forced placement of cattle onto grain feeding programmes.

 

The number reported in the latest quarterly industry survey is up 3% from the previous survey conducted by Meat and Livestock Australia (MLA) and Australian Lot Feeders Association (ALFA) at September 30 last year. It's only the second time since 2006 that numbers on feed across Australia have exceeded 800,000 head. 

 

ALFA president Don Mackay was not surprised by the result, given the ongoing dry conditions which had driven larger numbers of grassfed cattle into the feedlot system in order to keep them alive or in marketable condition.

 

Increases in cattle numbers on feed were reported in New South Wales (NSW), Victoria and South Australia (SA) as drier conditions began affecting pasture quality in southern parts of the continent. Compared with the previous quarter, NSW numbers were up a massive 23 % to 245,000 head; Victoria +8% to 49,000 head, and SA +19% to 22,000 head.

 

More surprising was the report suggesting cattle numbers on feed actually reduced by 5.6% in Queensland over the quarter to December 30.

 

Report authors suggested dry conditions increased grain and roughage prices was part of the reason, although grain prices did not really start to take off until well into January. Also negatively impacting on the Queensland result was quality and quantity of suitable feeder cattle. Queensland was reported to have about 476,000 head on feed at December 30, about 30,000 head below the previous quarter.

 

Mackay said average feed grain prices were up 9% on-year for the Darling Downs while domestic feeder cattle prices declined AUD0.04 (US$0.036) for the quarter and AUD0.16 (US$0.14) on-year. Similar broader trends are clearly identified in Beef Central's fortnightly 100-day grainfed trading budget.

 

MLA's market information and analysis manager, Tim McRae said grainfed beef exports were up 10% for the 2013 calendar year, with declines in Japan and Korea offset by significant increases to most other markets, including China, the Middle East and the EU.

 

Total grainfed beef exports for 2013 into Japan and Korea declined by 6% and 1% compared to 2012, to 116,383 tonnes and 31,020 tonnes, respectively. However, grainfed exports into China increased by nearly five times and were almost double into the EU and the Middle East to 20,500 tonnes, 11,500 tonnes and 10,400 tonnes, respectively.

 

Questions continue to be raised about the reliability of the quarterly grainfed survey figures. One industry participant closely aligned with the feedlot industry found it hard to accept that pen occupancy in Queensland was only 81% by December30, well before the recent rise in feedgrain price.

 

Despite the strong level of feeding activity over the past 12 months, the latest quarterly report suggests that the nation's overall licensed feedlot capacity has fallen by almost 140,000 head, on-year, representing a decline of 11% in national feeding capacity.

 

The December industry-wide capacity figure was 1.137 million head, with biggest state falls suggested in Queensland (minus-70,000 head); NSW (minus-30,000 head), Western Australia (minus-25,000 head) and Victoria (minus-12,000 head).