Key points:
- National feedlot capacity in Q4 2022 was 17%, or 225,000 head, higher than Q4 levels in 2018.
- Total grainfed turn-off accounted for 47% of cattle processed in 2022. This is a new record for the industry.
- Total turn-off of the NSW market share fell by 2% as the states rebuild their herds, leading to tightened supply.
In 2022, the lot feeding sector solidified itself as a major component of the Australian beef supply chain, accounting for a record 47% of total cattle slaughter.
With the release of the December 2022 quarter lot feeding brief, a year-in-review analysis has been conducted by MLA's Market Information team to gain insights into how the sector performed.
Capacity
National capacity for cattle on feed in 2022 continued its natural upwards trajectory, with the industry expecting to have space available for 1.532 million head (assuming 100% utilisation) in Q4 2022. Compared to Q4 2021, a further 5.5% or 79,000 head of pen space was delivered in 12 months.
National capacity for Q4 2022 is 225,000 head higher than Q4 2018 – an increase of 17.2%. All states have experienced strong growth compared with five years ago. The most significant increase occurred in Queensland, with its current pen space 17% higher (a further 123,000 head) than Q4 2018. WA and SA also experienced strong increases in pen space, rising by 16,600 and 19,700 head respectively since Q4 2018.
Turn-off
Total grainfed turn-off for 2022 reached 2.74 million head, the lowest yearly turn-off of grainfed cattle since the rebuild year of 2016.
Turn-off for 2022 remained firm year-on-year, although was 5%, or 140,000 head, lower compared to the five-year average.
Although actual volumes of grainfed cattle turn-off were down in 2022, its percentage as a total of slaughter reached a new record of 47% compared to grassfed. This further solidifies the critical role the lot feeding sector plays in not only dry years, but also during rebuild/retention years where cattle supply is tight.
The 10-year average for grainfed turn-off is 38%, so the 2022 grainfed percentage of the total demonstrates the shift the national herd is making towards producing more grainfed beef. Although due to Australia's production systems, grassfed beef will always play a major role in contributing large volumes of beef in actual terms.
Queensland and SA were the only states to register year-on-year increases in turn-off. Queensland rose by 3%, or 45,584 head, and SA rose by 2%, or 2,000 head. All other state turn-off levels fell, with NSW volumes down 8%, or 62,291 head, as the intensity of its rebuild and restocker demand directed cattle back into paddocks rather than feedlots.
In market share terms, NSW declined by 2% year-on-year to account for 25.1% of total turn-off in 2022. This was offset by a 2.4% increase in market share for Queensland which accounted for 60.2% of turn-off. Victoria, SA and WA all experienced declines. Looking at 2022 against five-year averages, all states' turn-off was down except WA, which remained firm in 2022. The major states of NSW and Queensland experienced the most significant turn-off falls, declining by 58,167 and 63,428 head respectively. These falls accounted for 87% of the total national turn-off decline in 2022, compared to the five-year average.
Looking ahead
Considering the significant number of cattle that entered feedlots and the record numbers on feed during certain quarters in 2022, continued buoyant supply of grainfed cattle is expected for 2023.
When compared to 2018, the current capacity data clearly indicates the significant growth the feedlot sector has experienced and the confidence it has in continuing to expand. Data suggests that over the next five years, the role lot feeding plays in delivering consistent, high quality beef to over 100 countries, as well as the need for increased numbers on feed to mitigate drought and meet consumer demand, should continue.
To read the full lot feeding brief, click here
Content by Ripley Atkinson, Senior Market Information Analyst
