October 28, 2008

Australian cattle numbers decline despite easing grain prices


The cattle figures in Australian feedlots during the September quarter declined 9 percent year-on-year, to 622,689 heads. Despite the decline in numbers for the quarter, trading conditions improved tremendously with easing feed grain prices and a plunging A$ offsetting the impact of higher feeder cattle prices.


However, the improvement in trading conditions failed to deliver an overall increase in numbers on feed. Lower numbers on feed in WA and NSW influenced the national total, while a leap in the turnoff of short fed cattle also affected numbers on feed for the quarter. Grain-fed cattle turnoff for the quarter totaled 604,911 heads, 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 heads, the highest quarterly result since June 2007 and up 3 and 5 percent, respectively, on the September 2007 and June 2008 results. Queensland lot feeders should also benefit 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.


Grain-fed cattle destined for export markets fell 9 percent for the quarter, to 458,318 heads, steady with the corresponding quarter last year. Similarly, cattle on feed destined for the domestic market fell to 159,241 heads, 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 grain fed beef, especially with recession fears in Japan, the much lower A$ against the US$ and Japanese yen should more than offset any demand impact.

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