April 21, 2009

The number of cattle in feedlots in Australia fell 10 percent in the first quarter to 650,026 from 719,379 in the fourth quarter of 2008, due to weak global beef demand resulting from the impact of the world financial crisis, the Australian Lot Feeders Association said Monday (Apr 20).

The global financial crisis has continued to create uncertainty in the export market, with buyers unwilling to commit to forward purchases and grain fed beef export prices falling, ALFA President Jim Cudmore said.

Volatility in financial and currency markets, a run-down in stocks and an increasing US presence in Japan and South Korea have led to stagnant demand for Australian beef, with grain fed beef exports to South Korea slumping 25 percent in the first quarter, said Peter Weeks, chief analysts at Meat & Livestock Australia.

But stocks of Australian beef in these markets have now depleted and with the depreciating Australian dollar, and resultant low import and wholesale prices, the potential to compete strongly is improving, Weeks said.

The local market also remains one of the best markets for grain fed beef, with the number of cattle destined for domestic consumption rising 18 percent on-quarter, he said.

Of the animals on feed in the first quarter, 66 percent were for export compared with 74 percent in the previous quarter, while 34 percent were fattened for domestic consumption, up from 26 percent.

Cattle numbers on feed decreased in New South Wales and Queensland while smaller lot feeding states, Victoria and Western Australia, increased in-line with normal seasonal patterns, ALFA said.