The headline cattle on feed numbers weren’t that exciting, but we are finally starting to see the increased numbers on feed translating into grainfed cattle supply. The latest cattle on feed survey gave us few surprises but paints an interesting picture for supplies of grassfed cattle this year.
While the release of the data comes two and a half months after the end date for the survey, it is still worth taking a look at the quarterly cattle on feed survey. The headline number of a 1% fall in cattle on feed shows the sector taking a break from growth, but it’s only 16,000 head fewer cattle on feed. In fact, cattle on feed were 14% higher than December 2017 (Figure 1).
A 3% and 7% quarter on quarter fall in the biggest lotfeeding states of Queensland and NSW respectively, was offset by seasonal increases in southern states. The arrival of summer and lack of feed saw Victoria increase numbers by 7%, SA up 17% and WA gaining 60%.
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The only record set in the cattle on feed numbers was in South Australia, where the 40,439 head on feed was 93% above the same time last year. Grain which is ‘cheap’ relative to eastern states might be helping SA grow their lotfeeding industry due to competitive advantage.
There were plenty of records in grainfed cattle marketing as record numbers on feed flowed through the system. There were 9.4% more cattle turned off on a national scale, which was 15.5% more than December 17 and 8.3% larger than the previous record, set in March 2017 (Figure 2).
The marketing numbers in Queensland were even bigger, with 20% more cattle turned off feed than in September, 41% more than December last year, and 15% more than the previous record from September 2015.
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With record cattle exiting feedlots, for there to be only a 1% fall in numbers of cattle on feed, placements still need to be very strong. Placements of cattle on feed were up 6.4% on the September quarter, and 22% on December 2017. They are still finding cattle in Queensland, where placements were up 20%.
Key points
* Cattle on feed numbers were down marginally, but marketings hit a new record
* Despite strong grainfed cattle supplies, they are being replaced in feedlots, maintaining supply
* More cattle going through feedlots raises questions around the supply of grass-finished cattle going forward
What does this mean?
Grainfed cattle supplies continue to prop up cattle supplies in general. In the December quarter, grainfed cattle made up a record 42.6% of all the cattle slaughtered nationally (Figure 3). With similar numbers of cattle on feed at the end of December, we can safely assume the increased slaughter early this year is being driven by grassfed cattle, likely breeding stock.
Demand for feeder cattle to fill space should remain strong and prices relatively good. However, there is a continued trend towards cattle being fed grain and turned off earlier, rather than grass and sold later. Additionally, there is yet another cull of breeding stock going on currently. This raises serious questions around how the supply of prime grassfed cattle might fare for the remainder of 2019 and into 2020, it’s looking like it might be very tight.
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