Cattle on feed numbers down: feedlot survey

The number of grain-fed cattle on feed has dropped by 5 per cent, according the Australian Lot Feeders' Association (ALFA)/Meat and Livestock Australia (MLA) March feedlot survey.

ALFA president Jim Cudmore said the survey outcome was predominantly the result of the high Australian dollar and the perpetuation of difficult international trading conditions.

"The $A for the quarter was up 5 per cent against the United States (dollar) year-on-year, feeder cattle were up one per cent while strong US beef competition continued to eat into the subdued international beef demand that currently exists," he said.

Mr Cudmore said although feed grain prices had helped to improve lot feeder margins - sorghum and wheat averaged 24 per cent and 20 per cent lower year-on-year in the Darling Downs - feeder cattle prices remained strong on the back of ongoing good seasonal conditions (and hence high re-stocker demand for young cattle).

"The wave of cattle placed on feed in the final months of 2011 due to a fall in new crop grain prices across the eastern states were not replaced in the March quarter of 2012," he said.

"Cattle numbers on feed fell in Queensland, New South Wales and Victoria. WA conversely experienced an increase to levels more attune to those normally experienced this time of year.

"Capacity utilisation remained at 60 per cent following reductions in feedlot capacity in NSW, Victoria and South Australia, mainly due to feedlots voluntarily suspending their quality-assurance accreditation."

MLA market information and analysis manager Tim McRae said grain-fed exports to Australia's major markets were down, with a 16 per cent year-on-year decline to Japan and a 35 per cent reduction to Korea.

"Exports to Japan over the quarter were sluggish, influenced by slow demand, growing presence of the US in the market and increasing supplies of Japanese beef," he said.

"Korean exports during the first quarter of 2012 stuttered, although from historically high 2011 volumes.

"Total grain-fed beef exports were 42,860 tonnes for the March quarter - 16 per cent lower year-on-year.

"With global uncertainty likely to impact on the fundamentals affecting grain-fed beef demand, lot feeders and exporters will be hopeful of price improvements in the next quarter."