Right place, right time for cattle

Short supply and strong demand has put the cattle industry right where it needs to be, according to WA Lot Feeders Association chairman Ivan Rogers.

Last year, cattle were trucked east in record numbers, live cattle trade increased and dry conditions in both the South West and Rangelands pushed many producers to destock.

“It’s always good for an industry to have strong demand. In 2011, those producing calves are experiencing strong demand and feedlotters buying calves are seeing strong demand from processers, which, in turn, have strong demand from retailers,” Mr Rogers said.

“This is exactly where we have to be as an industry — strong demand is tightening prices and it’s up to us to manage supply.”

The Tammin-based feedlotter said the sector would experience extra pressure to turn off a consistent quality supply of domestic trade yearlings for domestic processors, and as numbers in the South West dropped, feedlotters would look to the north.

“Buying cattle from the north to feedlot is nothing new. It’s our job as feedlotters to ensure we produce a consistent quality on the way out,” he said.

“We need to remember that the Rangelands are coming out of drought and the recent rains mean we can look to those areas and support those producers.”

The east could be an option for some, but Mr Rogers said it was unlikely given the competitive market at present.

Williams feedlotter Gordon Atwell is feeling positive about the industry, despite the tight numbers.

He has bought as many cattle locally as possible and will start buying regularly from the saleyards to top-up numbers.

“Every animal we buy from now on is booked in and has a home. We are not punting like we normally do,” he said.

However, for the few remaining feedlotters in the north, it’s a different story.

Darren Cobley from Walkaway feedlots 3500 head a year and said, in the short term, the tight numbers were making it difficult.

“There are not too many people trading cattle up here and once the calves are gone, they are out of the system,” he said.

But Mr Cobley is hopeful the situation will improve in the long term.

“It might mean processors put out more forward contracts to guarantee supply,” he said.

At the start of March, ABARES predicted the shortage of cattle would force beef prices up 11 per cent to 320 cents a kilogram in 2010–2011 and another 5 per cent in 2011–2012 to 335 c/kg.

ABARES also predicted demand would fall by 2015–2016, with prices decreasing to an average of 305c/kg in saleyards.