Insight: The story behind big demand from feedlots
A surge in demand for Australian grain-fed beef is fuelling demand for feeder steers with exports up 20 per cent year-on-year.
A surge in demand for Australian grain-fed beef is fuelling demand for feeder steers with exports up 20 per cent year-on-year.
And local exporters are taking advantage of a smaller supply of grain-fed beef from the United States and competitive cattle and grain prices to boost tonnages into major markets like Japan and China.
The national feeder steer indicator closed on Monday at 325c/kg for stock sold through saleyards monitored by the National Livestock Reporting Service.
But feedlotters are also sourcing numbers direct from producers and have been a dominant force in store sales, especially for the heavier end of offerings.
That demand is shown in the latest feedlot survey figures which showed a record number of cattle on feed in the March quarter at 1.35 million.
The Australian Lot Feeders Association survey showed a sixth consecutive rise in cattle numbers in feedlots.
ALFA president Barb Madden attributed the lift to “positive trading conditions”.
“Quarterly averages of feed grain and feeder steer prices have provided for supportive market conditions for cattle placement in the lot feeding sector,” Mrs Madden said.
A 4 per cent higher utilisation of feedlots to 85 per cent had flowed through to extra supply.
The latest figures for grain-fed exports for the year-to-date are to April with the 113,144 tonnes exported 20 per cent higher than last year.
Meat and Livestock Australia global supply analyst Tim Jackson said Japan remained the largest market for grain-fed beef and had taken 21 per cent more year on year at 82,864 tonnes.
After Japan, exports to China was the next highest and had increased its tonnage from January to April by 38 per cent year on year to 32,890 tonnes.
Not all markets are taking more grain-fed beef though, with exports to South Korea down 14 per cent year on year to 18,499 tonnes.
“The easing in Korean exports is largely because exports were so strong last year – when compared to the five year average the numbers are very healthy,” Mr Jackson said.
But the biggest lift percentage wise was to the United States, which has doubled its imports of grain-fed beef to 3156 tonnes.
“This lift in exports is partially due to the increase in supply, but also due to the decline in US exports, which were down 6 per cent in Q1,” Mr Jackson said.
“Since almost all of American exported beef is grain-fed, this boosts demand for Australian grain-fed beef in key markets, especially Japan and South Korea.”
Mr Jackson said strong numbers on feed and solid demand across our markets suggested grain fed exports would continue to rise over the year.
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