Feedlotters feel the pinch

Record movements of cattle to the eastern states in 2010 and the opening up of the Bos Taurus live cattle trade in Middle Eastern markets is being blamed for a shortage of cattle available to fill feedlots in WA.

With steer prices reaching up to $2.60/kg, stock levels in feedlots are down on the same time last year with high stock and grain prices making margins hard to attain for domestic lot feeders.

Uncertainty in the WA processing sector is also making it hard for lot feeders to secure long-term contracts with many also having to adapt to Coles’ decision late last year to move away from beef enhanced by hormone growth promotants.

Bridgetown cattle producer Mike Introvigne agreed that the shortage of cattle in WA was starting to become evident.

“Certain categories are starting to run out. The ball is now in the producers’ court and I think it will come down to who’s got the most money as to which buyers get cattle, ” Mr Introvigne said.

Mr Introvigne said the situation didn’t help the long-term sustainability of the industry.

“What we are seeing now is similar to what happened in the sheep industry; the difference is the cattle supply issue has certainly been exacerbated by the dry season, ” Mr Introvigne said.

Mr Introvigne said he was concerned about the viability of WA processors, saying this was something that had always been a problem in the industry with a lot of small plants trying to do the best they can while competing with much bigger and more efficient works in the eastern states.

“People won’t go back into cattle unless we have the numbers for a processing industry with improved capacity and efficiency, ” Mr Introvigne said.

“The next few years will be profitable for cow-calf producers but rather than relying on supply and demand to determine cattle prices into the future now is the time to start the development of a really highly efficient processing sector.”