September 21, 2006
Australian cattle on feed at record levels
Australian feedlot activity has hit record levels, both in terms of feedlot capacity (in excess of 1.1 million head) and numbers on feed (940,000 head in June 2006).
Capacity has increased by ten percent while numbers on feed are currently seven percent higher than a year ago, according to Cattle Network.
Feedlot activity are often a good indication of the level of exports of Australian beef to Japan.
High prices and lack of competition in the Japanese market have pushed numbers to record levels in Australia.
Dry weather and poorer pasture conditions may see numbers increase in the short term, while in the longer term, tighter cereal supplies and thus higher prices would decrease numbers on feed.
Regardless of weather conditions, feedlot turn-off is likely to increase. Worsened drought conditions would bring a sharp increase in feedlot numbers by the end of 2006 before declining steadily throughout next year.
Meanwhile, live exports of Australian Cattle are forecast to increase nearly 10 percent to 640,000 head in 2007, up from 585,000 head estimated for 2006.
Even if achieved, exports at this level are still below the ten-year average of 737,000 head.
Continued dry conditions may result in live export levels rise slightly but would not surpass record levels seen in 2003.
Live export numbers have been restrained by high domestic cattle prices and more cattle being supplied to the processed beef sector.
A stronger currency and higher fuel prices have also affected live cattle exports. Still, live exports to Indonesia, Malaysia, Israel and Mexico looks set to improve
Furthermore, the "Standards for Privately Owned Quarantine Facilities for Ruminants" published in May this year is expected to help exports to the US. Previously, ruminants could only enter the country through USDA designated centres, which limits the numbers to be exported. Now, quarantine can be done in privately owned facilities, which expands export options.
