November 2, 2007

 

Australia's feedlots emptying out as grain prices rise

 

 

Australia is suffering a huge drop in feedlot cattle numbers as grain prices reached record highs, according to Meat and Livestock Australia (MLA).

 

The drop is most apparent in Western Australia, where there is only 13,323 cattle on feed.

 

The September ALFA/MLA quarterly survey confirmed expectations of a dramatic fall of cattle numbers on feed

 

Nationwide numbers fell by 22 percent from the June quarter to 680,519 head this quarter.

 

ALFA vice-president Jim Cudmore said the results reflected the impact of the most difficult trading conditions ever seen by the industry, which is exacerbated by the strong Australian dollar.

 

With customers reluctant to raise prices, feedlots could not offset higher feed input costs and are thus forced to reduce the numbers of cattle on feed, he added.

 

Grain supplies diverted to supply the biofuel industry on top of an already low grain stock worldwide has pressured grain prices in Australia, which is itself faced with the worst drought in a century.

 

Cattle on feed numbers in Queensland fell 15 percent to 62,561 heads for the quarter, a drop of 101,000 head on last year's data.

 

Feedlot utilization in Western Australia is standing at only 13 percent currently compared with the national utilisation of feedlots sitting at a 59 percent.

 

However, the low feedlot utilization numbers could also mean lower demand from big importers such as South Korea.

 

Moreover, meat quality from grass fed beef at this time of the year was high, according to V & V Walsh export manager Paul Crane. 

 

WA Lot Feeders Association chairman Paul OMeehan said the abundance of grass has also caused more owners to avoid feedlots.