Impacts of high cattle prices is being felt by feedlots, with a sharp decline in feedlot numbers seen in the latest Australian Lot Feeder’s Association quarterly survey report.
Feedlot numbers in Queensland fell by 18,391 head to 495,578 head, or 3.6 per cent, in the March quarter compared to the December quarter. This represents a decline of close to 5 per cent in the past 12 months.
Declines were even more pronounced in NSW where cattle on feed numbers tumbled by about 19 per cent to 291,312 head from the December survey.
National cattle on feed numbers fell by 8.3 per cent from the December quarter to 914,902 head according to ALFA, with declines in all states except WA.
ALFA said high cattle prices were the major reason for the decrease in feedlot numbers, pointing to the record high Eastern Young Cattle Indicator (EYCI) price in February of 605.75 cents/kg.
The average EYCI price in March of 585 cents/kg was 37 per cent higher than March 2015. Cheaper feed grain prices have gone some way to lessen the impact of the higher cattle prices, with Darling Downs stock feed wheat values having fallen by about $70 a tonne over the same period.
Southern Queensland grain prices were steady to firmer last week, amid a lack of selling interest. Farmers remain reluctant sellers as they wait for planting rain, which is proving an underlying resilience in prices and this is unlikely to chance until the season breaks.
Stockfeed wheat was unchanged at $280 delivered into Darling Downs markets, although this is still up $20 in the last four weeks. Feed barley and sorghum bids continued to firm, helped by talk of exporter buying interest.
Sorghum bids into the Downs were $5 higher last week at $235 while feed barley was $up by a further $9 to $265.
Farmers are becoming increasingly anxious for rain to plant this year’s winter crops. Most growers are willing to plant well into June but will be looking for some soaking rains to take on the increased risk of planting later in the season.
Exporter buying interest in sorghum has strengthened in May helped by the weaker Australian dollar, but most of the rally appears to be weather driven.
Global wheat markets moved lower last week as expectations for the Northern Hemisphere wheat harvest continues to grow. Benchmark US wheat futures were modestly lower but this was largely offset by the softer Australian dollar. Warm and wet spring weather across Europe and the Black Sea country’s has paved the way for another round of large wheat harvests this year.
