Beef Feedlotting
Victoria is a major contributor to Australia’s position as the world’s second largest exporter of beef. The state contributes almost 20% of beef production. In addition to export supply, Victoria is also one of the major domestic sources of feeder steers for Queensland and New South Wales feedlots. In 2009/10, the Victorian beef industry was valued at $1.3 billion, producing 380,000 tonnes of beef.
Value adding of co-products is an important secondary industry and includes hides to produce leather and animal tissues for use in pharmaceuticals. Victoria has a reputation for producing some of the best quality leather products and pharmaceutical constituents in the country.
Intensive beef production can lead to efficiency gains if the production system has a sufficient scale of operation. This production system can also have benefits to the surrounding community due to the relatively high requirement for labour. However, there are risks associated with any intensive animal production system. A number of the issues are highlighted on this page.
Marketing considerations
Successful marketing of any product requires producers to have a strong understanding of their customers’ needs and preferences. Potential customers of beef feedlots, both domestic and export, may include processors, retailers, supermarkets, food service industries and re-stockers.
Before investing in a feedlot, it is very important to investigate and establish relationships with potential contractors, buyers and processors. The components needed for producing beef should be derived according to the requirements of the target market.
This includes feeding regimes, animal genetics, product price, animal welfare and investment in infrastructure. In order to minimise associated risks and increase market security it is important to maintain a close relationship with the target customer.
An advantage of lot feeding is the ability to produce animals that are uniform in both weight and fat score. This enhances the capacity for forward selling or contracting as a suitable marketing option.
The following considerations need to be taken into account when marketing beef products:
- Identification of target markets
- Size of the market, market growth and competition
- Types of products to be marketed
- Capacity and continuity of supply to market annually
The wide range of markets available to the feedlot industry means that there is a broad spectrum of market specifications. Each market may require different specifications for delivery of each of its products. Factors determining market specifications include a wide range of carcase and eating quality criteria including liveweight, fat score, marbling and age. Payment from all markets can be based on liveweight, carcass weight, forward contracts, and spot prices to name a few.
Important export markets for grain fed beef include Japan, South Korea, USA and a number of high value Middle East and Asian markets.
Economic considerations
A budget is essential prior to establishing a feedlot. Budget considerations include:
- Cost of purchasing livestock and price received for finished animals
- Cost of additional labour if required
- Desired growth rate and days on feed
- Cost of feed, water and animal health products
- Costs of feedlot equipment and infrastructure
- Cost of stock that die or do not finish
- Cash reserves for unanticipated costs
The establishment of an estimated gross margin is a very worthwhile exercise. Beef prices, skin value, feed prices and the feed conversion ratio all influence gross margins. As well as affecting the gross margin, growth rate is important because it determines the period of time an animal must be fed.
Legal considerations
Feedlot operators are required to comply with the industry codes of practise.
The Victorian Code for Cattle Feedlots provides guidelines for the planning, design, approval and operation of cattle feedlots. As the code is imbedded in the planning scheme, the responsible authority is local government. The code deals with a range of measures including:
- Feedlot location, size and design
- Community amenity including odour, noise and off-site transport effects
- Waste disposal
- Land protection
- Ground and surface water protection
- Feedlot operations and maintenance
There are national guidelines to assist in achieving appropriate development and management of cattle feedlots in Australia, produced by industry, which have recently been updated: National Guidelines for Beef Cattle Feedlots in Australia 3rd Edition and National Beef Cattle Feedlot Environmental Code of Practice 2nd Edition. These are available from Ausmeat and Australian Lot Feeders Association (ALFA).
The Victorian Code of Practice for the Welfare of Cattle is consistent with the ALFA Code for the Welfare of Cattle in Feedlots. All cattle feedlot operators are expected to maintain cattle conditions in compliance with the ALFA Code, although this is not a statutory requirement.
Prior to construction and operation of a feedlot, operators must obtain the necessary planning and environmental approvals from their local government and the Environment Protection Authority.
There are many meat safety programs for the beef industry. The National Feedlot Accreditation Scheme is an industry self-regulatory quality assurance scheme that is mandatory for feedlots producing grain fed beef for export markets.
Production considerations
When sourcing animals for a feedlot system it is important to first consider the specifications set out by the target market and identify what animal characteristics best suit these targets. Components such as animal health, environment, quality, age and type all contribute to growth rate and feed conversion.
When designing a feedlot there are a number of available feeding systems to consider, each of which vary according to the desired size and intensity of the feedlot. Examples of feeding systems include: self-feeders containing dry grain mix and separate roughage; all-in mix containing grains, roughage and additives, often fed using an open trough or bunk system; and pellets.
When formulating feed rations it is critical to tailor the ration to meet the desired growth rates. Protein, energy, minerals and roughage, and the proportions of each are major contributors to potential growth rates of lot-fed animals. Common components of a feed ration include pulses, cereals, hay and silage, minerals and buffers.
Stock must have access to water at all times. The water requirement of a 450 kg steer ranges from 70–100 litres per day in hot dry conditions. There must be at least three days water supply in storage that can be distributed using a non-electrical means, that is, gravity fed from an overhead tank.
Intensification results in a need for an increase level of management of both livestock and the business requiring both specialised skills and improved monitoring strategies particularly of the livestock.
It is important that appropriate investigations are undertaken and specialist assistance and reports obtained before deciding to undertake any new venture.
