October 9, 2014

Profits among Australia's feedlots are flat despite the record number of cattle being fattened, according to Don Mackay, president of Australia Lot Feeders' Association.

Returns tend to be eaten by the high cost of grains, Mackay said, with grains cultivated in southern Australia being delivered to northern feedlots at AUD80-AUD100 (US$71-US$89) per tonne.

"Over the last couple of years, (despite) the lower value of live cattle going into the feedlot sector, the profits have disappeared because of the cost of grain," he said.

Mackay also believed that the availability of cattle for feedlots may decline sharply in the next 12 months. The situation is made worse by producers force-selling breeding herds due to drought.

"I don't think we've seen as much demand internationally like we're seeing it today… So the number of animals available will start to become an issue," he warns.