June 7, 2006

Australian feed grain getting more expensive amidst tight supply

Australian cattle producers buying grain to feed livestock would have to deal with higher prices this season as dry conditions, higher oil prices and strong global grain prices all conspired to push up the cost of feed grain.

At the same time, the success of grain-fed beef exports is also putting more demand on supply, Ron Storey from Australian Crop Forecasters says.

Demand for grain domestically is based on the feedlot cattle market. Current strong demand for grain-fed beef in the consumer market would ensure that grain demand from feedlots remain strong, he said.

Industry watchers are very concerned about the supply of grain as these prices have risen considerably in the past two or three weeks, Storey said.