Australia’s feedlot expansion reshapes beef supply

AUSTRALIA – Australia’s cattle industry is accelerating its shift toward intensive feeding as thousands of Black Angus cattle at the Gundamain feedlot consume barley, silage, cottonseed, and molasses to reach slaughter weight.

After roughly 90 days on feed, the animals gain up to half their body mass and reach about 600 kilograms, a response to rising global appetite for grain-fed beef.

This growth sits within a broader transformation in a country that remains the world’s second-largest beef exporter, shipping meat valued at about US$5.67 billion in the first nine months of the year based on customs data converted from Australian dollars.

Feedlot expansion is enabling processors to supply grain-fed beef more steadily to overseas buyers, helping Australia take space from U.S. suppliers in Asian markets that prefer marbled cuts.

According to Gundamain co-owner Tess Herbert, export customers continue to request more product, prompting plans to increase the site’s capacity from 6,000 to 12,000 head.

Industry figures show that cattle numbers on feedlots reached a record 1.6 million at the end of June, rising from about 1 million five years earlier.

Analysts expect the figure to approach 2 million by 2027, which would mean roughly half of Australia’s slaughter cattle will pass through feedlots compared with about 40 percent today.

This expansion contrasts with shrinking cattle supplies in the United States, where ongoing drought has pushed feedlot numbers to their lowest point in decades.

U.S. data from early November put the national herd on feed at 11.7 million head, around 260,000 fewer than a year before, with federal projections pointing to reduced beef output this year and next.

Grant Garey of the Australian Lot Feeders’ Association said domestic growth has been driven by stronger demand as well as reduced U.S. production.

Grain-fed exports from Australia rose to 324,421 tons in the first nine months of the year from 224,230 tons in the same period of 2020, with most shipments headed to Japan, South Korea and China.

These markets have taken less U.S. grain-fed beef in recent years, allowing Australian exporters to lift their presence.

Supply Stability

Australian analysts say feedlots also help operators manage the country’s sharp swings between wet and dry seasons by maintaining a consistent supply chain.

Although drought can affect grain harvests, national production typically exceeds the volumes required by feedyards.

Global AgriTrends’ Simon Quilty said strong profitability is encouraging continued investment, supporting forecasts that cattle on feed could climb to 2 million within two years.

Large operators include Mort and Co, JBS, NH Foods and Teys Australia, which is linked to U.S. agribusiness Cargill.

Even so, Australia is not expected to mirror the United States, where more than 90 percent of cattle enter feedlots, partly due to the high cost of new facilities and expectations that U.S. beef output will rebound.

Analysts also point to rising demand for grass-fed beef, which attracts consumers seeking less industrial production.

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