Australia's cattle on feed numbers decline

The number of cattle in Australian feedlots during the September quarter fell by 9 percent on-year, to 622,689 head but trading conditions largely improved with easing feed grain prices and a plummeting A$, offsetting the impact of higher feed cattle prices.

However, trading conditions failed to deliver an overall lift in numbers on feed as Western Australia and New South Wales (NSW) influenced the national total, while a jump in the turnoff of shortfed cattle also eroded numbers on feed for the quarter. Grainfed cattle turnoff for the quarter totalled 604,911 head - up 17 percent on the previous quarter.

In contrast to the other states, Queensland lot feeders increased numbers on feed during the past quarter to 376,126 head - the highest quarterly result since June 2007 and up 3 percent and 5 percent, respectively, on the September 2007 and June 2008 results. Queensland lotfeeders should also gain in coming quarters from an above average harvest across key feed grain regions of northern NSW and Queensland, assisting in lowering grain prices and production costs.

Grainfed cattle destined for export markets fell 9 percent for the quarter, to 458,318 head - steady with the corresponding quarter last year. Similarly, cattle on feed destined for the domestic market fell to 159,241 head - back 9 percent on the previous quarter and 23 percent year-on-year.

While the economic turmoil engulfing world markets in recent months may impact demand for grainfed beef, especially with recession fears in Japan, the much lower A$ against the US$ and Japanese yen should more than offset any demand impact.