LOT FEEDERS continue to field increased inquiry for space in yards with no shift on the horizon in the paddock feed situation across the big cattle finishing regions.
Discounting through January on feeder cattle compared to late 2018 has gone some way to offsetting high grain prices but feedlot operators are not expecting much in the way of cost pressure relief this year.
Numbers of cattle on feed, however, are likely to to stay relatively high during 2019, although they are unlikely to reach the records of last year.
Meat and Livestock Australia’s just-released cattle industry projections for 2019 point to solid international demand as providing a foundation for numbers on feed to settle closer to the one million head mark.
Despite cost pressures, lot feeders appear intent on maintaining valuable relationships with their customers, particularly in Asian markets such as Japan and Korea, MLA analysts said.
Australian Lot Feeders Association president Bryce Camm said the sharp short-term jump in the cattle market to come with widespread rain was not weighing too heavily on the minds of feedlot operators.
“Restockers will be chasing the lighter end, not the traditional feeder steer, to go back onto grass. There is a heavy discount on lighter weight cattle at the moment compared to feeders,” he said.
Saleyard feeders across the Eastern States are selling more than 10 cents a kilogram down on pre-Christmas prices, with yearling steers averaging 275c/kg liveweight, according to agents.
The story is similar in the west.
Trevor Hinke, who runs Kerrigan Valley feedlot near Hyden, said he was now sourcing steers for $30 to $40 a head less than pre-Christmas, but quality and supply was good.
“We are probably getting barley and wheat $80 a tonne cheaper at the bunk than Eastern States guys and we expect margins will be pretty similar to 2018 levels,” he said.
Mr Hinke said he was getting calls about taking smaller pastoral-type cattle from producers in the north who were on the verge of having to make offloading decisions if rain doesn’t arrive.
“Numbers on feed will remain static over here. We’re domestically-driven and it’s not an easy decision right now to truck beef over so our market is taking as much as we can produce,” he said.
Mr Camm said the sorghum harvest underway across Queensland’s Darling Downs and Northern NSW would not substantially change cost of feed for most lot feeders.
“Some will go onto sorghum inclusion diets but the winter crop is far more influential,” he said.
Meanwhile, lot feeders continue to be vigilant around heat stress monitoring as record temperatures across key feedlot regions show little sign of easing.
“Our industry’s general awareness around heat load management is now in a strong position. We have had very challenging heat conditions but operators have managed it appropriately,” Mr Camm said.
The MLA projections report said the nation’s feedlots have played a crucial role in mitigating beef production variability during drought.
Mr Camm agreed, saying recent seasonal conditions had cemented the idea there was no debate between grass and grain-fed.
“To sustainably produce high quality beef, Australia needs both and each relies on the other,” he said.