CATTLE on feed for the October to December 2017 quarter decreased 51,572 head, or five per cent from the previous quarter, according to the results of the latest Australian Lot Feeders’ Association (ALFA) and Meat and Livestock Australia (MLA) survey.
The easing in numbers brings cattle on feed to a total of 973,176 for the first time in three consecutive quarters of record breaking levels above the one million head mark.
Changes in the numbers on feed across states were mixed. Declines were seen in New South Wales (down by 11,170) and South Australia (5,259) with Queensland seeing a reduction of 78,490 head. Victoria and Western Australia both reported increases, with Victoria lifting by 13,990 and Western Australia by 29,357 head.
ALFA president Tess Herbert said the easing in cattle numbers on feed in the December quarter was expected given the change in trading conditions for both grain availability and demand for cattle.
“Despite cyclical pressure on feedlot input costs driving a reduction in numbers on feed we continued to see strong demand for high quality grain fed beef right up to the end of 2017,” Ms Herbert said.
“2017 was a record year for Australia’s grain fed beef exports lifting 5pc from the previous year and resulting in 272,682 tonnes delivered to global customers.
The year ended strongly with grain fed beef exports up 11pc from the same quarter last year, Ms Herbert said.
“Demand from Japan – our biggest export destination for grain fed beef – resulted in a 7pc year-on-year increase for the December period; whilst China lifted 44pc from year-ago levels,” she said.
“Feedlot capacity figures have risen again during the quarter and total 1,293,623 head as more capital works came online reflecting further investor confidence and solid demand signals for Australian high quality grain fed beef.”
Scott Tolmie, MLA’s Manager of Market Intelligence, said the major indictors for feedlot input costs - the price of cattle and the price of feed grain – had been unfavourable for lot feeders in the last quarter which translated to lower numbers on feed.
“Good rainfall across NSW and Queensland during October encouraged stronger competition amongst restockers resulting in higher cattle prices. The national saleyard feeder steer indicator closed 2017 at 307¢/kg liveweight - a 37c,or 14pc,increase from where it finished in the September quarter,” Mr Tolmie said.
“The effects of the poor 2017-18 winter harvest due to well below average winter rainfall resulted in wheat ex-Darling Downs averaging $323/tonne, while barley averaged $317 for the December period, an increase of 48pc and 68pc year-on-year respectively,” he said.
Mr Tolmie said that despite pressure on the input side the price received for finished cattle held up well with the Queensland 100-day grain fed steer over-the-hook indicator declining just 2pc in the December quarter to average 507 cents per kilogram liveweight.
“Diverging cattle and over-the-hook prices, combined with a rise in feed grain prices during the quarter, will have put pressure on feedlot margins over the period which is reflected in the lower numbers on feed,” Mr Tolmie said.