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Australian feedlots continue to perform - MLA

30 August 2022
Meat & Livestock Australia

Numbers on feed remained at their third highest on record in Q2

The Australian lot feeding industry has continued to perform strongly in 2022, according to the latest Lot feeding brief released by MLA and the Australian Lot Feeders Association (ALFA).

In encouraging news, the latest Lot feeding brief revealed that the key confidence metrics of numbers on feed and national capacity have both remained at near record highs despite softening slightly from Q1 levels.

Numbers on feed remained at their third highest on record in Q2, despite falling modestly by 6% or 74,000 to 1.195 million head. While numerous headwinds such as increasing input costs for energy, fuel, cattle and grain were prominent, national capacity remained resilient, falling slightly by 13,668 head to 1.472 million – the second highest figure on record.

In line with slightly lower numbers on feed and national capacity, the utilisation rate fell 4% quarter-on-quarter to 81%. This figure was firm on year-ago levels but higher by 10% compared with Q2 2020, showing the growth in confidence and demand for product the sector has experienced in two years.

All states saw a reduction in numbers on feed in Q2. Numbers on feed dropped most significantly in Queensland, where volumes declined by 40,084 head and accounted for 54% of the total national reduction. This decline was partly due to smaller lot feeders stepping back from operating, with their smaller scale allowing more dynamism in the face of challenging conditions relating to inputs.

Meanwhile, the number of cattle on feed in WA continues to remain highly variable. After rising 82% in the March quarter, the state’s volumes fell in Q2 by 25%.

In encouraging news, numbers on feed in both Victoria and NSW remained relatively firm.

National turn-off for the June quarter reflected lower numbers on feed, falling by 10% to 667,542 head. During this period, reductions in turn-off across SA, NSW and Queensland were seen while volumes increased in Victoria and WA.

The lower volume of grainfed turn-off was reflected in a reduction of grainfed production as a percentage of total production. Grainfed production as a percentage of total production fell from 56% in Q1 to 45% in Q2.

Although Q2 figures were lower, they were still 4% above the 5-year average and 8% above the 10-year average – confirming large volumes of grainfed product continues to be delivered to market.

Grainfed exports

Although national turn-off volumes fell, grainfed exports improved by 15% or 10,181 tonnes compared with the March quarter – showing that robust demand for grainfed product in the export space remains.

Japan – Australia’s number one grainfed export market – increased encouragingly by 17%, while overall, the nation took 42% of total grainfed exports in the June quarter.

Demand from other markets outside of China, Japan and South Korea increased exports by 34% or 3,396 tonnes on Q1 results. These figures demonstrate the significant diversity of markets Australia exports grainfed product to, as well as the strong demand for product from other nations outside of the established grainfed markets.

In Q2, the lot feeding sector demonstrated its resilience and capacity to perform despite several headwinds faced during the quarter.

Overall confidence in the sector from the results of the Lot feeding brief show the industry is well positioned to continue to deliver high value, consistent product to a broad range of domestic and international emerging and established markets.

TheCattleSite News Desk


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