February 23, 2012

Australia's cattle count increases for Q4 2011

According to the Australian Lot Feeding Association (ALFA) and MLA quarterly feedlot survey, the number of cattle in Australian feedlots totalled 790,975 heads during the final quarter of 2011, an increase of 7% on-year, and 11% on the previous quarter.

For the December quarter, the majority of the increase was registered in Queensland, which totalled 463,521 heads - an increase of 9% on the corresponding period in 2010. Numbers for the quarter also increased in New South Wales, Victoria and South Australia while Western Australia contracted on the same period last year. 

According to the survey results, total grain fed cattle marketing's from Australian feedlots for the past calendar year totalled 2.5 million heads - down 1% on-year, and over 100,000 heads below the record highs set in 2005 with 2.6 million heads and 2006 with 2.62 million heads. Given that the total adult cattle slaughter for the past year declined 3%, to 7.26 million heads, the percentage of adult cattle slaughter, which had been finished on grain, increased to 34.5% in 2011, up from 33.9% in 2010.

Interestingly, the 34.5% of cattle finished on grain in 2011 is the highest calendar year proportion on record, exceeding the 34.1% set in 2005. In 2005, the average numbers of feed for the year was 815,380 heads, compared with the four quarter averaged of 769,010 heads in 2011. Thus, the record proportion of grain finished cattle in the 2011 annual kill represents the change in feeding regimes to shorter periods on feed - a symptom of the tougher trading conditions to Japan, which traditionally favoured longer periods on grain, and increased focus on shorter feeding requirements for the Australian market. 

A further breakdown of marketing results for the past calendar year reveals that grain finished cattle made up 42.2% and 41.4% of all cattle processed in Queensland and New South Wales, respectively. This compares to 17.9% of total adult cattle processed in Victoria for 2011, and 27.2% and 13.3% in South Australia and Western Australia, respectively.

For 2012, the trading environment for the Australian lot feeding sector is expected to remain difficult, framed by the high Australian currency, sluggish demand and prices for grain fed beef in export markets, and increased competition in the two largest grain fed export markets of Japan and Korea.