By Angus Brown | Source: MLA, ALFA.
Meat and Livestock Australia (MLA) and the Australian Lotfeeders Association (ALFA) have released their quarterly survey of Australian Feedlots. For the second quarter in a row, the numbers of cattle on feed has broken the record, but it was seemingly a case of maintenance rather than growth.
The numbers of cattle on feed grew in the September quarter, but it was only marginal. The total number of cattle on feed was up 0.6% to 1.266 million head. That was only up a little over 6,000 head, which is unusual. It’s only unusual as cattle on feed numbers usually swing pretty strongly, we haven’t had a move less than 1% since the June-16 quarter.
The biggest feedlot state, Queensland, did have a more marked move, with cattle on feed rising 3.6% to 652,074 head. Queensland holds 57% of the National cattle on feed inventory. The rise in Queensland was offset by small falls in NSW, Victoria and the usual seasonal large fall in WA, where there were 30% fewer cattle on feed.
For National cattle on feed numbers to be relatively steady, placements and marketings need to be at the same level. Figure 1 shows a fall in placements and a rise in marketings halted the growth in numbers of cattle on feed in September.
National Placements of cattle on feed fell 7% in the September quarter. Weakening lotfeeding margins may have had an impact on the number of cattle on feed entering feedlots. Additionally, feedlots are still at record utilization levels of 86%.
Queensland is at the highest utilisation levels of 90%, while WA is at only 34%. There is not a lot of space to put extra cattle on feed in eastern states, which limits how much higher cattle on feed can go without new capacity coming online.
Marketings of grainfed cattle rallied 4.4% in the September quarter to record their third highest level on record. With over 1.1 million head of cattle on feed in June, marketings had to be higher and are likely to rally again in the December quarter.
Key points
* The numbers of cattle on feed reached a new record in September.
* Placements were lower than the June quarter, but still historically strong.
* Grainfed cattle supply should remain well above average for the coming months.
What does this mean?
Figure 3 shows feedlot ‘carryover’ hit record levels at the end of September. The ‘carryover’ number is simply the number of cattle on feed at the end of June, minus the number marketed in December. This tells us how many cattle in feedlots have been there for more than 3 months.
The large numbers of heavy grainfed cattle which were due to be marketed in the December quarter had no doubt kept a lid on finished cattle prices and should continue up until Christmas, possibly beyond.
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