July 28, 2009

Australia feedlots are slowly regaining lost ground, thanks to lower input costs and steady domestic beef demand.

Cattle on feed surged 10 percent in the second quarter, and increased eight percent on-year.

The domestic market had been strong during the second quarter, but export growth had been hindered by the strengthening Australian dollar which had led to lower demand from importers, according to the Australian Lot Feeders Association president Jim Cudmore.

Feed grain prices are 37-percent cheaper than the same period last year.

Cattle numbers on feed rose mainly in New South Wales and Queensland, with the smaller lot-feeding states of Victoria, Western Australia and South Australia showing numbers in line with normal seasonal patterns, Cudmore said.

The weaker export market for grain-fed beef was a result of lower consumer demand, difficult conditions for importers and traders coupled with the return of US beef, said MLA chief market analyst Peter Weeks.