Grain Fed Cattle Numbers Fall

AUSTRALIA - Continuing the trend of quarterly fluctuations in grain fed cattle numbers on feed, results from the latest Australian Lot Feeders' Association (ALFA)/ Meat and Livestock Australia (MLA) March survey showed a five per cent decline.

18 May 2012

2 minute read

Oceania

Australian Lot Feeders’ Association (ALFA) President Jim Cudmore commented that the survey outcome was the result of predominantly the consistently high Australian dollar and the perpetuation of difficult international trading conditions.

“The Australian dollar for the quarter was up five per cent against the US year on year, feeder cattle up one per cent whilst strong US beef competition continued to eat into the subdued international beef demand that currently exists.”

“Although feed grain prices helped improve lot feeder margins (sorghum and wheat averaged 24 per cent and 20 per cent lower year-on-year in the Darling Downs), feeder cattle prices remained strong on the back of ongoing good seasonal conditions (and hence high re-stocker demand for young cattle),” Mr Cudmore said.

“The wave of cattle placed on feed in the final months of 2011 due to a fall in new crop grain prices across the eastern states, were not replaced in the March quarter of 2012.

“Cattle numbers on feed fell in Queensland, NSW and Victoria with Western Australia conversely experiencing an increase to levels more attune to those normally experienced this time of year.

“Capacity utilisation remained at 60 per cent following reductions in feedlot capacity in NSW, Victoria and South Australia mainly due to feedlots voluntarily suspending their quality assurance accreditation.”

Meat & Livestock Australia’s Manager for Market Information and Analysis, Tim McRae stated that “grain fed exports to our major markets were down, with a 16 per cent year-on-year decline to Japan and a 35 per cent reduction in Korea."

“Exports to Japan over the quarter were sluggish, influenced by slow demand, growing presence of the US in the market and increasing supplies of Japanese beef.

“Similarly, Korean exports during the first quarter of 2012 also stuttered, although from historically high 2011 volumes. Total grain fed beef exports were 42,860 tonnes for the March quarter - 16 per cent lower year-on-year.

“With global uncertainty likely to continue to impact upon the fundamentals affecting grain fed beef demand, lot feeders and exporters will be hopeful of price improvements in the next quarter.”