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Lot feeders resilient amid red hot cattle market

18 November 2021

Key points:

  • In the September quarter, cattle on feed numbers were 10% above the five-year average, showing the growth of the sector
  • National capacity declined across the board, with WA falling 24%, driven by increased restocker demand to rebuild herd numbers
  • The 100-day Grainfed Steer OTH price is in record territory, averaging 694c/kg cwt for the September quarter

The latest Australian lot feeding brief for the September quarter highlights the continued strength of the lot fed market and cements the industry’s position within beef production as critical to delivering consistent supply while records and seasons dictate market terms.

A key statistic that demonstrates the growth of the sector amid record livestock prices is for the September quarter in 2021, the number of cattle on feed was 10% above the five-year average. The national utilisation rate remained firm at 77%, in line with the five-year average, although when compared against the uptick in numbers on feed this overall increase demonstrates confidence in the sector.

National capacity declined slightly for most states. Victoria and SA remained firm, but the key providers of NSW and Queensland fell 6.9% and 2.6%, respectively. WA experienced the largest fall of 24%, indicative of the herd rebuild taking shape for the state following a strong rainfall across autumn and winter.

At the market end, the National Feeder Steer Indicator recently broke another record, hitting 546.93c/kg cwt overnight. This is a rise of 124c/kg cwt, or 24%, in 12 months. Queensland’s Feeder Steer Indicator rose 23c overnight to also reach 546c cwt. Following rain in the states key supply regions over the past week, the price has lifted 25c/kg cwt.

The 100-day Grainfed Steer price for a 240–260kg cwt animal continues to trade at record levels, averaging 694c/kg cwt, 7% above year-ago levels. Tight supply as the herd rebuild continues is driving market conditions and the OTH price to its current high level.