WA feedlotters perform in ALFA March report

18 May, 2005 08:45 PM
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WA has increased its feedlot capacity by 117 percent since the March 2004 quarter, according to the Australian Lot Feeders Association (ALFA) and Meat and Livestock Australia (MLA) March survey.

ALFA councillor Paul O'Meehan said this reflected the ongoing growth in WA feedlot accreditation.

³By far there are a lot more accredited feedlots in WA following a push from Harvey Beef for producers to become accredited,² Mr O'Meehan said.

³These feedlots have always existed. There has also been a growth of about 20pc in response to Korean and Japanese market interest, which has been targeted by Greens.²

The survey found there was a record 856,025 head of cattle on feed nationally, which was an 11.3pc rise on the previous record of 759,000 head, set in the September quarter, 2004.

The figures were attributed to encroaching drought and continued strong demand for beef in North Asia.

Feedlot capacity reached a record 994,692 head and barring a major unexpected event, should reach the million mark within six weeks.

Feedlots were 86pc full, which was a also a record.

The number of cattle on feed in WA has risen by 35,752 head in the past year.

There was an increase in capacity from 41,564 to 90,210 with a jump of 23,125 in the past three months alone.

Additional background from MLA indicated grain prices were on the rise because of increasing dry conditions that could affect further growth of the Australian feedlot industry.

Mr O'Meehan said he did not expect grain prices to change much during 2005, however, a softening of prices could occur at the end of the year with the domestic market remaining stronger than international grain prices.

He did not expect this to effect cattle prices until summer next year when pressure from the eastern states could result in grain prices increasing.

He said the WA lotfeeding industry needed to keep an eye on developments in Japan and Korea with relation to the re-entry of the US.

This would determine if WA feedlot growth would continue on the same tangent as was being experienced.

The report said growth of the feedlot industry in recent years had provided a floor price for cattle prices during drought conditions.

This has been proven over the past four-year spell of drought conditions in much of eastern Australia, as well as having a significant effect in protecting the sustainability of vast areas of grazing land, which in the past were overgrazed due to the lack of alternatives for finishing cattle when drought prevailed.

³Lotfeeding in WA has definitely benefited cattle prices,² Mr O'Meehan said.

³There is strong producer competition in the feeder market. The margin between lotfeeders and processors is tight in WA. Producers should make the most of this.²

Total quarterly turnoff for WA has more than doubled over the past year to 39,623 in the March 2005 quarter, which came very close to matching Victoria's quarterly turnoff of 40,641 head.

ALFA president Sandy Maconochie said the figures were not surprising given the international market demand for Australian beef in the wake of the BSE detections in North America and with the increasing areas of land becoming drought affected in most Australian states and territories.

³Producers are opting to finish store cattle through feedlots to preserve more feed for their breeders and replacement heifers,² Mr Maconochie said

³Many feedlots were running at maximum capacity and the 856,025 head on feed at 31 March was a huge increase over previous levels of production.

³The international and domestic factors that are contributing to this record growth in the feedlot industry, cattle on feed and high quality beef turnoff will inevitably change in the foreseeable future.

³However cautious optimism is in order in relation to continued growth and development in the feedlot sector, providing significant numbers of new jobs in rural communities, export income and the long term sustainability of the Australian beef industry.²

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