September 4, 2013

 

Australia's cattle on feed rise by 9%

 

 

During the June quarter, Australia's cattle on feed numbers rose by 9% due to poor grazing conditions across the country during the past 12 months.

 

The sharp increase in these by-quarter on-feed numbers lifted the national tally on-feed to 873,000 head for June, making it the largest second-quarter result since 2007.

 

The largest State by-quarter increase was experienced in Queensland, where numbers jumped by almost 50,000 head to 523,000. This sharp increase in the Queensland intake is a result of poor seasons in the Northern Territory and the western parts of that State, which led to higher off-farm turnoff figures. This situation is unlikely to ease any time soon as more than half of this cattle-dominant State is now drought declared.

 

Larger intakes were also experienced in Victoria (up 26%), South Australia (up 8%) and Western Australia (up 39%), where quarterly on-feed numbers rose to 50,900, 24,000 and 34,000 head respectively.

 

The survey, which is conducted each quarter by Australian Lot Feeders' Association (ALFA) and Meat & Livestock Australia (MLA), also found that feedlot utilisation in Queensland had increased to near maximum capacity, at 83%, which was 10% above the national average.

 

However, in stark contrast, it was also unearthed that feedlot capacity in Victoria and New South Wales has shrunk markedly by 20%, despite the tough grazing conditions across the southern half of Australia.

 

The most possible reasoning behind this contraction is a number of smaller capacity opportunity feeders mothballed their feeding operations due to a preserved lack of profitability stemming from high feed grain and hay prices entering the autumn intake period.

 

Furthermore, the huge quarterly increase in on-feed numbers attributed to the southern States have been found to be the same as the numbers in the corresponding quarter 12 months ago. This tends to support previous anecdotal evidence that less speculative feeding was conducted by small-scale operators in the southern States this winter during to the tight margins offered under captive supply arrangements.

 

ALFA president Don Mackay said the June quarter outcome was predominantly the result of lower feeder cattle prices as grass-feeders in several States destocked due to drier than average seasonal conditions.

 

McKay said feeder prices started the June quarter with a continuation of the easing from the March quarter, before bottoming out in mid-May, and then recovering through June.

 

McKay said the ALFA/MLA quarterly feedlot survey also found the number of cattle held in New South Wales general remained unchanged as lot feeders in that State was unable to take advantage of cheaper cattle spilling from Queensland and the Northern Territory due mainly to transport costs.