Marketing Feedlot Beef In Australia
Prior to the 1990s, feedlots were used either to combat drought or opportunistically by producers, gaining an advantage when the grain prices were low.
In the last ten years the Japanese beef market has been liberalised subsequently there has been an increase in demand for imported grainfed beef. Resulting in a huge growth of the feedlot sector within Australia. Cattle numbers in these feed lots has risen from 80 000 in 1985 to 640 000 in 2001. Also there is currently 850 feed lots accredited by the `National Feedlot Accreditation Scheme', combined to form a total capacity of 850 000 (MLA March 21 2002). Supply and Demand Patterns Australia is the largest exporter of beef in the world. if you take into account feedlot meat and live export, 650f total production is exported (MLA March 21 2002), Total numbers on feed reflect the supply and demand forces. Demand Forces The most significant is our international exchange rate, most importantly the US dollar. There are two main reasons for this.
The first is that the domestic price is driven by the price we get in US$ for "grinding beef". This is hamburger mince which comes from cull cows etc but which forms a huge part of our export market. Although this has no direct correlation with the feedlot market this is what drives market forces and sets price on the domestic market.
The second reason and more directly applicable to feedlot demand, is the price of our beef in Japan relative to the price of US feedlot beef. The US is our single biggest competitor.
Demand forces in Japan are critical to the overall feedlot activity, as 600f feedlot production goes to Japan.
The Australian domestic market makes up for 360f demand. The feedlot supply of this market prior to 1991 was only as an opportunity during drought times. Consumers are now demanding a more consistent and predictable product. Independent of season grain feeding or at least finishing on grain will...
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