Rising feed promise? Grain-fed cattle sector hits record 40% in Australia

By Kacey CULLINEY

- Last updated on GMT

© istock/sarah1810
© istock/sarah1810
The number of beef cattle on feed in Australia has hit record levels and end product prices remain high, opening up lots of opportunity for feed makers, says a Rabobank analyst.

Grain-fed cows now represent 40% of Australia’s beef cattle sector, with numbers on feed surpassing the one million head mark in Q1 of this year, according to Rabobank data.

Angus Gidley-Baird, senior analyst for animal proteins at Rabobank, said while part of this had been due to reduced slaughter numbers, there were plenty of other factors driving the rise in feed use.

“Looking at the last few years, there’s been a fairly steady growth of cattle on feed, and whether that’s due to the fact we’ve seen low grain prices; the fact we’ve got some good, strong export markets in Japan, Korea and China; or whether retailers are just keen to get consistent products, we’re seeing these increased numbers,”​ he told FeedNavigator.

On top of this, he said beef prices were at record levels due to shortages in stock versus demand.

“What’s happened is we had both sheep and cattle in a couple of years of high production as a result of dryer seasons, but last year the season turned for most of South Eastern Australia and we’ve seen producers hold onto livestock. Effectively, this has caused a shortage in supply and a little bit extra in demand,”​ he explained.

What this meant for feed makers, he said, was increased opportunity to develop and sell products to cattle producers who, essentially, had more cows to feed and more money to spend.

“With a little bit more optimism and positivity in industry, you get people spending a little bit more… It’s moved away from an opportunistic, supplementary operation where producers are just trying to cover the season; transitioning to a defined industry with solid export markets in Japan, Korea and a growing presence in China, that’s sort of a foundation to provide the feed lot operators with certainty to increase and upscale.”

Nutrition, productivity and ‘fit for purpose’

He said many cattle producers would probably use the solid market status to take a step back and consider investment options.

“Producers might be entertaining the idea of looking at different ways of doing things or new technologies or feeding regimes,”​ he said.

There may be some producers considering options to enhance cattle diets with supplements or minerals, he said, particularly in light of increasing pressures on antibiotic and hormone use.

In addition, Gidley-Baird said there was a new focus in cattle on the final product being ‘fit for purpose’.

“Some of the technology like scanning equipment now allows processors to objectively measure things. On the one hand, the producer is paid in cents per kilo but then the processor might be asking for a particular product. The motivator for the producer has therefore shifted to making the product fit for purpose, rather than just as many kilos as possible, and this is only going to evolve more as some of the scanning and feed technology develops further,”​ he said.

Related topics: Markets, Australia, Cattle - beef, Grains

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