Oversupply and end consumer drive differences in feedlot prices: JBS data at Brahman conference

Speaking at the Australian Brahman Breeders' Association conference, JBS feedlot livestock manager Jason Carswell gave a candid review of the current feedlotting situation and how Brahmans can fit it.

Mr Carswell is based at JBS's big feedlot and processing facility Beef City, near Toowoomba. JBS is the country's largest meat processing company.

JBS's five beef feedlots across Queensland and NSW have the capacity to feed 165,000 head and at the moment have 152,000 on feed, covering many breeds.

The grain-fed cattle supply Angus, Shorthorn and Wagyu brands, plus generic brands.

JBS expects its grain-fed business to increase, subject to world markets, with possibly 50 per cent of its product grain-fed in the future, Mr Carswell said.

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The requirement for 100 per cent Brahman feeders had increased over the years, and JBS also buys a large number of Brahman-cross cattle, he said.

From January to July this year, JBS bought 47,000 crossbred cattle at an average price of $4.86/kg. In the same period, it purchased 17,000 Brahmans at an average of $4.53/kg.

"Our price difference between crossbred and Brahman cattle has always been about 20c. This year it has jumped to 33c," Mr Carswell said.

"The main reason has been when the boats stopped (as Indonesian feedlots facing foot and mouth disease reduced their orders) we quoted a large number of Brahman steers. We bought from blokes we haven't bought from in ten years.

"We increased our number by about 4000 but we couldn't buy them all.

"It all comes back to supply and demand."

JBS specifications for a Brahman feeder steer are 380 to 499kg, milk and two teeth.

From the last quarter of 2019 to the last quarter of 2021, JBS processed approximately 30,000 Brahman steers, mostly through its Dinmore plant in Queensland.

Mr Carswell provided this breakdown on average feedlot and carcase performance:

Mr Carswell said there had been a 15pc price difference between a marble score 0 and 2 in the end price JBS was able to achieve.

That equated to a 40 to 50 cent a kilogram live weight difference.

"Hence, the difference in the way Brahman cattle are priced," he said.

"Of course, we are talking averages here and there were certainly Brahmans that performed well above the average.

"What we buy for is dependent on what we sell for and that is driven by end consumer demand."

Over time, Mr Carswell sees the gap returning to the more traditional 20c/kg.

Elders northern livestock manager Paul Holm dismissed the concept of 'discounts' for certain cattle, saying producers should view grids as an opportunity to collect a premium.

"Every step you take along the way is a chance to secure extra cents per kilogram over and above the base rate," he said.

"There are bos indicus cattle that grade Meat Standards Australia and achieve the top per-kilogram rates and there are flatbacks that don't.

"The bottom line is making production choices that pay and supplying the article that is in demand."