The latest data from the lotfeeding sector, as well as ABS livestock production figures, continues to reflect the now firmly cemented importance of the sector to the cattle industry in Australia. Records for capacity and turn-off were set yet again, and the annual average number of cattle on feed has now eclipsed the 5 million head mark. Australia also exported a record volume of grain fed beef for a first quarter in the January to March period.
Cattle on feed numbers reached a record 1.63 million head in the March quarter, an increase of about 1% from the previous quarter, 9% higher than March period last year, and 30% above the five-year-average. This was driven by Queensland, which has 55% of the national cattle on feed, with numbers rising to above 931,000 head. Capacity also increased in that state, and utilisation kept up, remaining firm at 94%.
National utilisation also remained the same at 92%, with both South and Western Australia, who have a smaller portion of the fed cattle, jumping up, but NSW, which surged to 96% last quarter, dropping back down to 92% in March. That said, NSW was also the only state outside QLD which saw a sizable increase in feedlot capacity this quarter. Holding the national utilisation firm was the increase in total capacity, which also rose 9% to a record 1.78 million head.
And if they go in, they’ve got to come out, so records also fell for quarterly turn-off of grain fed cattle. For the first time more than 1 million cattle were turned-off from feedlots, up 11% from the quarter prior. It was 22% more than the same quarter last year, and 41% above the average. It was a record number for both NSW and QLD, but on the back of high utilisation figure in quarter four last year, NSW had the biggest turn-off increase since December, up 17%.
This aided the record total beef production for Australia for a first quarter this March, up 8% year-on-year. Cattle slaughter in turn was also up, however only by 6%, as grain fed cattle contributed to higher carcase weights. Grain fed beef exports held firm at 30% of Australia’s total volume headed overseas from January to March, with grain fed volumes down from December, but 21% higher than the same period last year. Grain fed exports to China increased significantly year-on-year and were also higher to South Korea and Japan.
What does it mean?
Trading conditions remained favourable for lotfeeders so far this year, with the feeder steer price holding fully firm from the previous quarter, and feeder heifers falling very slightly. Feed grain prices did rise in the first quarter, but remained well below the feeder cattle price, according to the ALFA survey, and have dropped again since autumn rainfall arrived in the south. That all said, finished steer prices also dipped away considerably post-March, but again have seen some resurgence in the past month. Grain fed beef keeping its market share of Australia’s total beef exports is a very positive sign in a record production quarter, especially considering the volume of lean beef we’ve had headed to the US of late and the amount of the market that takes up.
Key Points
- More than a million cattle were turned-off of Australian feedlots in the first quarter as total beef production reached a new high for that period.
- Feedlot capacity lifted to a record number once again, as numbers on feed sits 30% above the five-year-average.
- Asian markets driving grain fed beef exports, which remains at 30% of total Australian beef sent offshore.
Click on figure to expand
Click on figure to expand
Data sources: Meat & Livestock Australia, Australian Lot Feeders’ Association, Mecardo
