Feedlots Face Major Changes
AUSTRALIA - Australia's struggling feedlot industry is on notice it must change, or continue to see companies go out of business.
14 February 2008
1 minute read
Grain prices are high and cattle are more expensive, because farmers are hanging onto stock after the good rains in eastern Australia.
Richard Koch managing director of the Australian agricultural information service Profarmer told ABC that 70 per cent of feedlots are in the red, and in the future, cattle will spend more time on grass.
"The industry may contract for a period and contract back to larger and more efficient operations", he said.
"The days of chucking a few cattle on feed and hoping for the best are gone.
"Feedlots will have to manage their margins much more stringently and look at risk management practices to ensure that any cattle they do feed, they can earn a buck out of".
ABC said that the industry is reluctant to make any big changes just yet, with most feedlotters wearing the increasing costs.
Manager of the Charlton Feedlot in Victoria, Stephen Reynolds, told ABC they have to absorb costs to keep key markets.
"You can't pass it on at the moment", he says.
"Grainfed beef is competing with grass-fed beef on the butcher and supermarket shelves and certainly we're wearing a lot of pain, the whole feedlot industry is wearing a lot of pain at the minute.
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