Australian Cattle on Feed Lowest Since 2000

AUSTRALIA - According to the organisation Meat and Livestock Auatralia the number of cattle in Australian feedlots fell further during the final quarter of 2007, as the industry continued to face very high input costs and unfavourable market conditions. Cattle on feed during the December quarter fell 14% on the previous quarter and 36% year-on-year, to 584,472 head – the lowest quarterly total since March 2000.
calendar icon 18 January 2008
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Meat & Livestock Australia

2007 saw feedlot operators forced to progressively cut back numbers, as record high grain prices, historically high feeder cattle prices and falling export prices (in A$ terms) impacted margins. The 36% decline in cattle on feed over the past year saw capacity utilisation rates fall to only 51% during the December quarter - the lowest level on record.

Photo: Meat and Livestock Auatralia

The reduction in numbers on feed combined with sluggish Japanese demand and a rising A$, impacted grainfed beef shipments for the final quarter of the year. Exports to Japan and Korea during the December quarter declined 18% and 10% year-on-year, respectively.

Given the decline in cattle numbers, grainfed turnoff for the quarter fell 25% year-on-year, to 481,497 head. Total grainfed cattle turnoff for 2007, at 2.4 million head, was back 8% on 2006’s record 2.63 million head. Grainfed cattle made up an estimated 29.7% of the national adult cattle slaughter during 2007, down from 32.9% in 2006 and 34.1% in 2005.

An easing in feeder cattle prices during the final quarter of the year provide some positive news for feedlots, with prices averaging 12% lower than the September quarter. Feeder cattle prices have increased during the first few weeks of January, with greater interest being shown towards heavy yearlings and grown steers.

Forecast for a bumper summer sorghum harvest has also seen some weakening in feed sorghum prices, with widespread rains recorded across growing regions since November. However, high input costs are likely to constrain feedlot numbers for some months to come, with a favourable 2008-09 winter grain harvest critical.

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