The Australian Lot Feeders Association (ALFA) and Meat & Livestock Australia (MLA) have recently released the September lot feeding brief, providing a comprehensive overview of current trends in the lot feeding sector.
This report highlights continued growth in the industry, with record-breaking figures in several key areas.
Steady Growth in Capacity and On-Feed Numbers
The industry has seen a steady increase in capacity, with minor rises in major lot-feeding states contributing to a national capacity boost of 21,231, reaching an all-time high of 1,576,858. Additionally, the number of cattle on feed has continued its upward trajectory, increasing by 1,545 to 1,258,377 head.
This slight increase positions the September quarter as the second-highest volume of cattle on feed on record, surpassed only by Q1 2022. Utilisation rates have remained stable at 80%, marginally above the five-year average of 79%.
Turn-Off Rates and Time on Feed
Despite these increases in capacity and on-feed numbers, the quarterly turn-off experienced a 10% decline, falling to 618,017 head in the September quarter. This is the lowest quarterly turn-off figure since Q4 2013, indicating a trend towards cattle spending longer periods on feed.
Feeder Steer Prices and Supply
The feeder steer market has played a significant role in this record quarter for lot feeders. September saw a 46¢ decrease in the National Livestock Reporting Service (NLRS) feeder steer indicator quarter-on-quarter, equating to a 42% decline year-on-year.
Yardings increased by 23% to 80,397 head in the quarter, while weights remained relatively stable at 408kg per head, 8kg lower than in the June quarter.
Grain Prices
In contrast to the easing stock prices, wheat prices have seen their third consecutive quarterly increase, growing by 8% to $439 per tonne. This represents a $49 per tonne increase compared to the same period last year.
These rising grain prices continue to exert pressure on overall ration costs, offsetting the impact of reduced feeder prices for lot feeders.
Grain-fed Beef Exports
Grain-fed beef exports have shown a robust performance in the national export of red meat, increasing by 10% to 85,050 tonnes. This makes the 2023 September quarter the largest quarter on record for grain-fed beef exports. This record was supported by rising export volumes to Japan, South Korea, and China.
After a slight decrease in the second quarter, exports to Japan and South Korea recovered, increasing by 3% and 10% respectively. Exports to China continued to grow for the third consecutive quarter, reaching 22,998 tonnes.
This volume is the second-largest for grain-fed exports to China, following the record imports of 2019 driven by African Swine Fever (ASF), which caused a protein shortage in the country.
