September 26, 2007

Australian cattle feedlots threatened by high grain prices

Feedlot producers in Australia are worried what the future holds due to warnings of falling cattle prices and a shortage of water and feed.

Major feedlots say tight supply of expensive grain is forcing them to cut returns to suppliers.

Cargill's Ian Keith says world meat prices are stable but grain prices continue to rise, thus, returns to cattle producers will drop from the current market level of US$2 a kilogramme.

He said despite the drought and the increasing costs of grain, Australian cattle farmers are still at mercy of world markets in grain prices.

Keith said farmers should find a level that will make it feasible for feedlotters to operate.