TRADING conditions for lot feeders deteriorated in the September quarter, with the ALFA/ MLA survey recording a 25,000 head decline in cattle numbers on feed.
Australian Lot Feeders’ Association (ALFA) President Jim Cudmore said NSW was the only state in which cattle on feed numbers did not decline as lower lotfeeder margins and international competitiveness discouraged grain fed cattle placements.
“Increases in the price of feed grain, feeder cattle and a much stronger Australian dollar have all combined to negatively impact upon trading conditions," he said.
“Compared to just four months ago, feed barley and wheat prices were 41 per cent and 51pc higher (delivered Riverina) and 27pc and 39pc higher (delivered Darling Downs).
“At the same time feeder cattle prices reached a four year high during the quarter, 16pc above the same quarter last year - more than drowning out the modest 4pc rise in finished cattle prices.
“The fantastic season on the east coast has reduced the supply of suitable feeder cattle, and coupled with the positive rainfall outlook for the remainder of spring and summer, producers have been encouraged to retain stock to higher live weights. The good season has also ensured solid restocker demand from grass fed beef producers.
“Increases in the Australian dollar against most trading currencies during the September quarter also reduced international competitiveness for grain fed beef exports.
“Since the previous quarter, the Australian dollar was 2pc higher against the Japanese Yen, 4pc higher against the Korean Won whilst reaching parity against the US dollar in October.
Meat & Livestock Australia’s Manager for Market Information and Analysis, Tim McRae stated that “despite tough export conditions, Australian grain fed beef exports for the September quarter totalled 59,201 tonnes swt, 10pc higher than a year earlier, and 20pc higher than the June quarter”.
“However, whilst grainfed beef exports to Japan lifted 10pc for the September quarter, they declined 5pc to Korea, as US beef imports assisted by the weak US dollar continued to rise, up 127pc for the first seven months of 2010."
