Cattle on feed in WA forecast to increase

The number of cattle on feed across Australia remains stable, above one million head, despite uncertain market dynamics, but feedlot numbers are down almost 110,000 head, or 10 per cent compared with last year, when the drought took hold.

Australian Lot Feeders’ Association and Meat and Livestock Australia’s July to September quarter survey results had 1,010,320 head of cattle on feed, a 128-head increase from June.

The survey found feedlot occupancy levels at 70 per cent, down from more than 90 per cent when cattle on feed peaked at 1.24 million head.

New South Wales and WA recorded increases, while all other States recorded declines in the number of cattle on feed.

New South Wales increased by 32,263 head, or 12 per cent, while WA increased by 842 head, or 2 per cent.

WA Lot Feeders’ Association vice-president Ivan Rogers said cattle on feed in the State were likely to increase in the December quarter as feedlots took on new seasons weaners to be turned off through 2021. “The feedlot sector is a major supplier of high-quality beef to the food service and retail supermarket sector and will continue to become more important over time,” he said.

“High prices for new seasons weaners may provide a challenge to margin but it is expected that the reliance on grain-fed beef will lead to appropriate adjustment to grain-finished pricing.”

Mr Rogers said grain prices were marginally lower than in 2019-2020 and this would aid lot feeders in deciding whether to grain feed.

“The WA beef industry has fared relatively well through COVID-affected 2020, with all abattoirs remaining at full operational capacity and there being no interruption to supply,” Mr Rogers said.

“The beef supply chain should be recognised and congratulated on this achievement.”

Mr Rogers said WALFA expected a modest repositioning of cattle into feedlot programs in future months and years in response to higher grain-fed prices, improving genetics and increased Statewide feeding capacity.

In other States, Queensland declined by 20,019 or 3 per cent on feed, Victoria decreased by 10,248, or 18 per cent, and South Australia decreased by 2711, or 7 per cent.

ALFA president Bryce Camm said national feedlot utilisation remained steady in the September quarter at 70 per cent, and above 1m head, despite uncertain market dynamics.

“It’s a positive sign for the feedlot industry to see feedlot utilisation stabilise in line with the five year average despite market dynamics associated with improved seasonal conditions, herd rebuilding intentions and the uncertainly that COVID-19 continues to play on trading conditions,” he said.

“National feedlot capacity reached a new record, increasing slightly from the June quarter to 1,449,200 head, demonstrating continued confidence in grain fed beef production and the resilience of lot feeders.”

MLA market information manager Stephen Bignell said while cattle were dearer and closed 4 per cent up, to finish at 406¢/kg lwt, wheat ex-Darling Downs eased 21 per cent to average $338/tonne and barley averaged $298/tonne, a decline of 18 per cent on the previous quarter.

“Lot feeders faced subdued supply and dearer feeder cattle due to strong restocker demand, however this was offset by easing grain prices factoring in improved harvest expectations and continued demand for finished cattle which supported prices through the quarter,” he said.

“The Queensland 100-day grain fed steer over-the-hook indicator continued to trade at elevated levels, averaging 649¢/kg carcase weight in the September quarter, 6 per cent higher than the June quarter and 10 per cent above year-on-year levels.”