MLA: Grainfed beef lifts to new heights
Over the past five years, the Australian feedlot sector has grown by 24%. Despite slowed growth this quarter, the sector remains strong, with the number of cattle on feed staying above 1.4 million head, sustaining record-breaking growth. Capacity has held steady at 1.6m head, resulting in a stable utilisation rate of 87%.
National turn-off in the third quarter rose by 39% (or 241,913 head) to 859,930 head, marking the second-largest quarter on record. High numbers on feed have now flowed through the system as cattle finish feeding programs. Encouragingly, the sustained numbers on feed suggest that the high turn-off is not a signal of reduced capacity or intensity in current programs.
Queensland, the largest lot feeding state, slightly declined this quarter in both capacity and cattle on feed. Capacity decreased by 1%, while cattle on feed dropped by 3% to 829,2128 head, maintaining 90% capacity. The state turned off just under half a million head, up 10% to 499,834 head, the third-largest figure on record.
NSW continues to set state records, increasing capacity by 1%, and numbers on feed by 3%, reaching 397,342 head with an 84% utilisation rate. Favourable conditions allowed feedlots to restock pens, lifting numbers by 42% from the previous quarter to 277,883 head.
In SA, dry conditions encouraged greater use of feedlots for finishing. The sector achieved record capacity, up 6%, and record numbers on feed, up 9% to 75,697 head. Utilisation was nearly at a record 96% despite a record turn-off, which rose by 8% to 46,690 head.
The Victorian lot feeding sector experienced minimal change, with capacity and utilisation remaining stable in Q3. Numbers on feed eased by 1% to 59,762 head. Victoria was the only state to decrease its turn-off rate, which dropped 5% to 39,869 head. Unlike SA, Victorian feedlots appear less inclined to absorb cattle for finishing despite dry conditions.
WA experienced an unusually large quarter. Typically a seasonal sector, Q3 is generally the low point, however, this quarter saw growth across all data points. Capacity rose by 8%, numbers on feed increased by 26% to 62,393 head, resulting in a 70% utilisation rate. Turn-off also climbed 35% from the previous quarter to 45,654 head.
For the first time on record, grainfed exports in the September 2024 quarter exceeded 100,000 tonnes carcase weight (cwt), up 11% from the previous quarter record and 19% higher than the same period in 2023. Despite and overall increase in total beef exports, the grainfed portion held steady at 28%. The ongoing drought in the US has impacted global red meat export dynamics, driving demand for Australian beef.
Japan, despite a 9% decrease, remains Australia’s largest grainfed market, importing 32,511 tonnes cwt, or 32% of all grainfed exports. This reduction opened opportunities for record-breaking exports to China and Korea.
China accounted for 25% of grainfed exports, importing 25,059 tonnes cwt, while Korea, our third largest market, made up 21% of exports, with 21,301 tonnes cwt.
The remaining 22% went to other markets, with grainfed exports to the US rising by an impressive 59% to 4,661 tonnes cwt.
Both major feedlot inputs, livestock and feed, have increased this quarter, placing additional pressure on feedlot margins. However, a reduction in both input prices over September offers a positive sign.
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