Markets

Demand allows feedlot growth to defy high input costs: ALFA chair

Liz Wells, May 17, 2019

 

AUSTRALIA’S feedlot sector has been able to continue its expansion in the face of challenging seasons which have driven feed inputs to record levels.

Speaking to the Queensland Agricultural Merchants’ annual gathering in Toowoomba yesterday, Australian Lot Feeders Association (ALFA) chairman Bryce Camm said the feedlot sector had played a valuable role in counteracting the impact of difficult seasons for grassfed cattle producers.

Mr Camm is the chief executive officer of the Wonga Plains Feedlot on the Darling Downs in a family operation which started lotfeeding cattle in the 1970s with a licence for 3000 head, which expanded to 10,000 head in the 1990s.

The feedlot has a licence to expand to 21,000 head.

“We’d love to have a 21,000-head feedlot now because I could probably fill every pen twice.”

He said this was despite the ration cost being at around $495 per tonne.

“We all know where the price of grain is. It still remains at exceptionally high levels, and roughage, silage and almond hulls too. And yet, we see demand at its highest.”

Record numbers on feed

ALFA’s March-quarter figures released this week show numbers of cattle on feed at a record 1.145 million head, up 3.1 per cent from the record December-quarter figure.

ALFA president Bryce Camm. Photo: Liz Wells

“Everyone said it would start to come down. It’s again at a record.”

Custom feeding forms part of the income of many feedlots, Wonga Plains included, and Mr Camm said custom feeders were helping to push up numbers as the industry sought to use grain rations to increase its beef earnings.

“It is disappointing to have conversations that say ‘I can’t help you’ in terms of feedlot capacity.”

The Camms run 24,000 head of cattle on their northern grazing properties, and buy up to 20,000 head of trade cattle, with lighter cattle generally going on to feed.

It gives the operation an empathy with the outcomes grassfed producers wishing to achieve improved returns through custom feeding.

“There are a lot of swings and roundabouts.”

He said the challenging seasons had pushed an increased number of “out-of-spec” cattle, such as cows and weaners, into feedlots.

“It’s a really interesting period. The feedlot industry is one that’s standing there ready to help.”

Rising, diverse demand

Mr Camm said he saw strong demand for Australian beef, with tensions between the United States and China possibly feeding demand for this important Asian market.

“It continues to see more growth and opportunity for the feedlot sector here.”

Mr Camm said consumer demand was diverse, with grassfed beef holding appeal attached to its rangeland production, and grainfed beef holding appeal for quality and market positioning.

“It shows the dynamic nature of where the feedlot industry is at.”

He said grassfed and grainfed production was growing to promote the increased options around beef now being offered to consumers.

“It’s a really interesting thing going on in the consumer’s head.

“I see that not as a threat but as an opportunity in taking them on a journey around production.”

Mr Camm said the Australian feedlot industry had a long history of quality assurance and advancement which would position it to continue the journey.

 

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