October 23, 2008


Australian cattle on feed declines by 9 percent



Despite more favourable trading conditions for the feedlot sector, the overall July to September quarter survey by Australian Lot Feeders' Association (ALFA) showed a 9 percent decline in cattle numbers on feed from the previous quarter.


ALFA President Jim Cudmore said that while the decline in feed grain prices and the Australian dollar had improved feeder returns, the seasonal reduction in cattle numbers on feed in southern states was the over-riding factor in the result.


Seasonal conditions in Western Australia and parts of Victoria and South Australia that allows more cattle to be finished on grass, led to reductions of 86 percent, 35 percent and 10 percent respectively, he adds.


With northern New South Wales and southern and central Queensland also experiencing improved seasonal conditions, the stronger buyer demand for store cattle led to national feeder cattle prices increasing by an average 8-13 percent over the previous quarter which tempered any increase in cattle numbers on feed.


Overall grain fed cattle numbers declined from 685,756 to 622,689 at the end of the quarter, while capacity utilisation levels also declined from 60 percent to 55 percent.


However trading conditions are in general improving, due to the average 1-4 percent reduction in feed grain prices and the more recent decline in the Australian currency against ALFA's major trading partners.


Meat & Livestock Australia chief market analyst Peter Weeks said grain fed exports were down on-year in Japan and Korea (6 percent and 26 percent), due to continuing slow economic conditions and an increase in US exports.


However, the 20-percent and 3-percent decline in the Australian dollar against the Japanese Yen and Korean Won over the quarter (with further reductions during October) has seen export returns improve, Weeks added.

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