australian feed grain supply and demand report 2016 · the 2016/17 winter crop harvest is expected...

Australian Feed Grain

Supply and Demand

Report 2016

Prepared by: JCS Solutions

October 2016

2 Feed Grain S & D Report 2016

Feed Grain Supply & Demand

Report 2016

A report for the

Feed Grain Partnership

October 2016

Prepared by John Spragg

JCS Solutions Pty Ltd

15 Pine Grove Road

Poowong North Vic 3988

Phone: 03 5659 9256

Mobile: 0402 831 843

Email: [email protected]

JCS Solutions Pty Ltd makes no representation about the information contained in this document. It is

provided as is without express or implied warranty of any kind. JCS Solutions Pty Ltd disclaims (to the

full extent allowable by the Law) all warranties with regard to this information, including all implied

warranties as to the accuracy of the information. JCS Solutions Pty Ltd shall not be liable for any

damages whatsoever including any special, indirect or consequential damages resulting from loss of

profits, whether in an action in contract, negligence or otherwise arising out of or in connection with

the information contained in this document. Neither JCS Solutions Pty Ltd nor any of its employees or

agents warrants that the information within this document is error-free.

mailto:[email protected]


Contents 1. EXECUTIVE SUMMARY .................................................................................................................... 4

2. INTRODUCTION ............................................................................................................................... 5

3. AUSTRALIAN GRAIN PRODUCTION ................................................................................................. 6

3.1. Total Grain Production ............................................................................................................ 6

3.2. Wheat Production ................................................................................................................... 7

3.3. Barley Production.................................................................................................................... 9

3.4. Oat Production ...................................................................................................................... 10

3.5. Sorghum Production ............................................................................................................. 11

3.6. Triticale Production ............................................................................................................... 12

3.7. Rice Production ..................................................................................................................... 13

3.8. Lupin Production ................................................................................................................... 14

3.9. Field Pea Production ............................................................................................................. 15

3.10. Canola Production ............................................................................................................. 16

3.11. Other Oilseed Production ................................................................................................. 17

4. GRAIN END USE ............................................................................................................................. 18

4.1. Domestic versus export use volumes ................................................................................... 18

4.2. Wheat use in Flour Milling & Ethanol ................................................................................... 19

4.3. Barley Use in Malt Production .............................................................................................. 19

4.4. Oilseed Crushing ................................................................................................................... 21

4.5. Grain Use in Animal Feeding ................................................................................................. 22

4.5.1. Beef Sector ................................................................................................................... 28

4.5.2. Dairy Industry ................................................................................................................ 31

4.5.3. Poultry Meat ................................................................................................................. 35

4.5.4. Layer Industry ............................................................................................................... 36

4.5.5. Pig Production ............................................................................................................... 38

4.5.6. Sheep............................................................................................................................. 40

4.5.7. Aquaculture ................................................................................................................... 41

4.5.8. Horse Industry ............................................................................................................... 42

5. REFERENCES .................................................................................................................................. 42


1. EXECUTIVE SUMMARY

The 2016/17 winter crop harvest is expected to be a record in terms of total grain production. The

major grain, being wheat, is forecast by ABARES to reach 28MMT. Together with large barley and oat

crops and the expectation of at least an average summer sorghum crop, Australia is placed to have a

large surplus grain crop. After meeting domestic feed, flour and malt production, it is forecast that

the grain surplus will be in the order of 28MMT. When carryover grain stocks are included, the next

12-18 months will see plentiful grain supply for the domestic market end users.

Both wheat and barley crops continue to provide increases in crop yield. Although the area planted

is increasing at a slower rate, increased cropping production efficiency is providing production

growth to meet the expanding domestic market needs. It is of note that 2016/17 provides the ninth

successive cropping year that has not been limited by drought conditions. Based on Australia’s

climatic history, droughts that significantly reduce crop yield are more frequent than once every nine

years.

The decline in production of triticale and lupins that are dedicated feed grain crops has continued.

Triticale as a crop is likely to disappear from Australian grain production as breeding programs have

been scaled back. On the east coast lupin production has fallen below 80,000 tonnes and likely to

decline further. Together with the reduction in field pea production, Australia’s reliance on imported

soybean meal has been increasing, reaching 730,000 tonnes in 2014/15 and expected to increase

further as the poultry and pig industries continue to expand. Although canola meal production has

been increasing, the inability of Australia to supply protein sources to replace imported soybean

meal continues to be a limitation to the supply chain.

Animal feed use is forecast to have increased to 13.0MMT in 2015/16. For the 2016/17 year there

will be a drop in feed use, with this being due to a drop in both beef feedlot cattle on feed and the

downturn in the dairy industry.

The chicken meat, egg and pig industries are forecast to continue their growth with expansion of

farming operations.

The longer term ten year outlook for Australian feed use is that by 2024/25 a demand figure of

14.6MMT will be reached.


2. INTRODUCTION

The Feed Grain Partnership (FGP) was established in 2007 to integrate and identify collaborative

Research and Development initiatives across participating R&D funding agencies involved with the

feed grain and livestock supply chain.

Members of the FGP are:

Australian Egg Corporation Limited (AECL)

Meat and Livestock Australia (MLA)

Grains Research and Development Corporation (GRDC)

Rural Industries Research and Development Corporation (RIRDC) – Chicken Meat Program

Australian Pork Limited (APL) & Pork Co-operative Research Centre (Pork CRC)

Dairy Australia (DA)

Stock Feed Manufacturers Council of Australia (SMFCA)

The FGP seeks to generate information relating to the production and use of Australian feed grains.

A critical aspect of the FGP work is to better understand the use of grain by the livestock industries

and gaps in supply and demand. Since 2008 FGP has funded work looking at grain supply for the

domestic market end users and issues relating to value adding these grains via livestock into meat,

milk and eggs.

This report commissioned by the Feed Grain Partnership is written to provide an update report on

grain production and feed grain demand since the last report written in July 2014. The update looks

at trends in production and potential impact on the domestic grain market.


3. AUSTRALIAN GRAIN PRODUCTION

3.1. Total Grain Production

The 2016/17 cropping year will be the ninth successive year of average to above average Australian

crop production (Figure 1). The ABARES September Crop Report has forecast the 2016/17 winter

crop at a record 46.14MMT, when canola is excluded this is 42.3MMT. Through the growing period,

forecasting organisations have repeatedly increased the forecast to account for the optimal growing

conditions. Although above average rainfall has created problems for some regions, the outlook is

for above average yields.

Figure 1. Total grain production (excluding canola) by state 1997/98 - 2016/17 (‘000 tonnes)

Source: ABS Agricultural Commodities and ABARES Crop Reports

NSW, VIC, SA and WA are all forecast by ABARES to be 10-15% above the previous five year average

production. The WA grain crop has been affected frosts through September and GIWA in their

October 2016 crop report suggests grain production could be 1 million tonnes lower than previously

forecast. Qld is forecast to meet the five year average production and Tas below average.

Table 1. Total grain production by state (‘000 tonnes) 2016/17 versus previous 5 year average

Tonnes 2016/17 Prev. 5 year ave. 2016/17 change

NSW 11,149 10,177 9.6%

VIC 5,712 5,203 9.8%

QLD 3,094 3,108 -0.5%

SA 7,160 6,478 10.5%

WA 15,276 13,310 14.8%

TAS 56 65 -13.9%

TOTAL 42,333 38,297 10.5%

Source: ABS Agricultural Commodities and ABARES Crop Reports for winter cereal crop and summer crop volumes

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

TAS

WA

SA

QLD

VIC

NSW

20 year

average

35.1MMT


Wheat and barley, as the two largest volume crops, are forecast to be 11.3% and 12.8% above

average production for 2016/17. A much larger oat crop is forecast, whether all this grain is

harvested is yet to be seen and depends on the area cut for oaten hay. ABARES include triticale and

maize in their forecast. The figures in Table 2 for 2016/17 triticale and maize production is the five

year average for each crop.

Table 2. Total grain production by crop (‘000 tonnes) 2016/17 versus previous 5 year average

Tonnes 2016/17 Prev. 5 year ave. 2016/17 change

Wheat 28,079 25,225 11.3%

Barley 9,496 8,420 12.8%

Oats 1,551 1,227 26.4%

Sorghum 1,933 1,952 -1.0%

Triticale 143 173 -17.4%

Maize 426 426 0.0%

Lupins 549 633 -13.2%

Peas 300 270 11.0%

Total 42,476 38,325 10.5%

Source: ABS Agricultural Commodities and ABARES Crop Reports,

3.2. Wheat Production

The 2015/16 wheat crop at 24.2MMT ensured Australia has ample supplies of wheat for domestic

demand use till the next harvest. To this will be added the second largest wheat crop in 2016/17 at

28.0MMT. There are some in the industry that are speculating that the ABARES forecast is

conservative and Australia is looking at the largest wheat crop in our history topping 30MMT. The

final crop yield will depend on the effects of wet conditions and disease risk and how the crop

finishes.

Figure 2 identifies that the area planted to wheat has plateaued over the last eight years.

Figure 2. Wheat Production 1969/70 – 2016/17 (tonnes and hectares)


0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Tonnes

Hectares


The 2016/17 wheat harvest is forecast to provide record yields at an average 2.2 tonnes/ha. The

impact of climatic conditions is clearly seen (Figure 3) with the yield drop in drought years 2002/03,

2005/06 and 2006/07. The overall trend is for increasing yield over time.

Figure 3. Wheat Yield 1969/70 – 2016/17 (t/ha)


The percentage of wheat grown on the east coast has remained at 45% over the last two years with

this forecast to be unchanged for 2016/17 (Figure 4). The majority of the wheat crop is grown in WA

and SA, where there is a greater surplus available for export markets.

Figure 4. Percentage of wheat grown east (Qld, NSW and Vic) versus west (SA and WA) 1967/70 to

2016/17.


0.0

0.5

1.0

1.5

2.0

2.5

t/h

a

0%

10%

20%

30%

40%

50%

60%

70%

80%


3.3. Barley Production

Barley production for 2016/17 will be another large crop, although unlikely to reach the record

2003/04 crop (Figure 5). The growth in barley production is seen with the volume of grain increasing

faster than the area planted.

Figure 5. Barley Production 1969/70 – 2016/17 (tonnes and hectares)


ABARES crop report is predicting the 2016/17 barley crop to be well above average yield at 2.4t/ha

(Figure 6). When drought years are excluded, there is a strong trend for increasing barley yield.

Figure 6. Barley Yield 1969/70 – 2016/17 (t/ha)


0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Tonnes

Hectares

0.0

0.5

1.0

1.5

2.0

2.5

3.0

t/h

a


3.4. Oat Production

ABARES is forecasting for 2015/16 a 25% jump in oat production over the previous five year average.

If this is achieved the 1.6MMT oat crop will be the largest since 2005/06. The final volume of oats

produced may vary greatly depending on the area cut for hay, higher value in grazing for sheep and

cattle and climatic conditions leading into hay making versus grain harvest.

Figure 7. Oat Production 1969/70 – 2016/17 (tonnes and hectares)


Although better seasonal conditions are in place, ABARES is only projecting an average oat yield of

1.8 tonnes/ha. Figure 8 illustrates the plateau in oat yield since the mid 1900’s.

Figure 8. Oat Yield 1969/70 – 2016/17 (t/ha)


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Tonnes

Hectares

R² = 0.4496

0.0

0.5

1.0

1.5

2.0

2.5

t/h

a


The yield comparison between wheat, barley and oats since 1969/70 is shown in Figure 9. The rate

of increase for barley yield remains ahead of wheat, while oat yield has been left behind. Some

speculation exists relating to the breeding challenge for oats destined for hay production versus

grain yield and whether this has reduced the increase in yield of oats relative to wheat and barley.

Added to this is the relative breeding focus and finding for wheat and barley compared to oat

breeding.

Figure 9. Wheat, barley and oat yield 1969/70 – 2016/17 (t/ha)


3.5. Sorghum Production

The 2015/16 sorghum crop as reported by ABARES was 2.0MMT, making this an average production

year. Figure 10 identifies the high yielding and larger area planted in 2007/08 year. ABARES is

forecasting another average year for 2016/17. The current wet conditions in NSW and Qld are

providing plenty of soil moisture for crop production, however the area planted will be affected by

not being able to plant wet paddocks.

Figure 10. Sorghum production 1997/98 – 2016/17 (‘000 tonnes and hectares)

Source: ABS Agricultural Commodities and ABARES Crop Reports.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

t/h

a

Barley

Wheat

Oats

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Tonnes

Hectares


Sorghum crop yield (Figure 11) has been on an average 3 tonnes/ha in recent years and well below

potential crop yield under more favourable growing conditions.

Figure 11. Sorghum yield 1997/98 – 2016/17 (T/ha)


The trend for increasing sorghum production in Qld has continued, while the volume from NSW

remains in decline (Figures 12 and 13).

Figures 12 and 13. Sorghum production Qld and NSW 1997/98 – 2016/17 (‘000 tonnes and

hectares)


3.6. Triticale Production The demise of triticale production in Australia is almost complete, with ABARES ceasing to include

the crop within its 2015/16 and 2016/17 forecasts. Figure 14 shows the small volume and low area

planted. With GRDC making the decision to cease funding triticale breeding, and the crop being

significantly disadvantaged in relative yield against wheat and barley, the production of triticale has

all but ceased. The loss of triticale is a major negative for the domestic feed grain market as it has

been historically a dedicated feed grain.

R² = 0.093

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

T/h

a

-

500

1,000

1,500

2,000

2,500

3,000Sorghum Production - '000 Tonnes

QLD

NSW

-

100

200

300

400

500

600

700

800

900Sorghum area - '000 ha

QLD

NSW


Figure 14. Triticale Production 1997/98 – 2016/17 (‘000 tonnes and hectares)


3.7. Rice Production

The relevance of providing rice production data is due to its availability of rice milling by-products

including rice hulls, pollard and broken rice. ABARES reports the 2015/16 rice crop at only 250,000

tonnes, this being low due to reduced irrigation water availability. With higher irrigation dam levels,

the forecast 2016/17 rice crop is 920,000 tonnes (Figure 15).

Figure 15. Rice production 1997/98 to 2016/17 (‘000 tonnes and hectares)


0

100

200

300

400

500

600

700

800

900

1000

Tonnes

Hectares

0

200

400

600

800

1000

1200

1400

1600

1800

Tonnes

Hectares


3.8. Lupin Production

Figure 16 identifies the ongoing trend of decline in lupin production. The last four years provides

some indication that production may have stabilised at around 500,000 tonnes.

Figure 16. Lupin production 1997/98 - 2016/17 (‘000 hectares and tonnes)


Lupin production at 80,000 tonnes in NSW/Vic (Figure 17 shown as East production) is insufficient

volume for feed manufacturers to pursue purchase and use. The majority of lupins are grown in SA

and WA where their continued use as an animal feed grain appears more sustainable as it is

providing some agronomic benefits for grain growers. Lupin breeding is targeted to WA, with only

one breeding company left with a breeding program.

Figure 17. Lupin production East and West 1997/98 - 2016/17 (‘000 tonnes)


0

500

1,000

1,500

2,000

2,500

Tonnes

Hectares

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

West

East


3.9. Field Pea Production

The last three years has seen a further decline in the area of field peas planted, falling to only

200,000 hectares (Figure 18). Although 2016/17 is forecast to see a jump in volume to 200,000

tonnes, this is due to increased yield rather than planted area. The final harvest volume will depend

on weather conditions through to harvest and potential impacts of wet weather and crop disease.

Figure 18. Pea production 1997/98 - 2016/17 (‘000 hectares and ‘000 tonnes)

The larger drop in field pea production has occurred in WA and SA, shown in Figure 19 as West

production. Production in the eastern states appears to have stabilised at 100 – 130,000 tonnes

annually. At this low supply level, the stockfeed industry has insufficient volumes to chase a

consistent supply availability and commitment of raw material manufacturing silos.

Figure 19. Pea production East and West 1997/98 - 2016/17 (‘000 tonnes)


-

100

200

300

400

500

600

700Tonnes

Hectares

-

100

200

300

400

500

600

West

East


3.10. Canola Production

The growth in Australia’s canola crop is seen in Figure 20, with the planted area running between 2.5

to 3 million hectares and production being over 3 MMT. This volume more than meets the domestic

canola oilssed crush and ensures sufficient meal is available for domestic demand.

Figure 20. Canola production 1997/98 - 2016/17 (‘000 hectares and ‘000 tonnes)


Canola yield has remained flat at 1.2 tonnes per hectare. The ABARES forecast 2016/17 yield at

1.3t/ha looks low. However canola disease in the present year’s crop may limit yield potential from

the higher rainfall growing conditions. The Australian Oilseed Federation September canola crop

report puts the 2016/17 crop above ABARES figures at 3.4MMT grown on 2.16 million hectares. This

provides a crop yield of 1.57 t/ha, if this occurred it would be a canola yield record.

Figure 21. Canola yield 1997/98 to 2016/17 (T/ha)


0

500

1000

1500

2000

2500

3000

3500

4000

4500

Tonnes

Hectares

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6


3.11. Other Oilseed Production

The Australian cotton crop is directly affected by irrigation water availability, as well as rainfall for

dryland cotton production. ABARES is forecasting a jump in cottonseed production to just over

1.2MMT (Figure 22) for 2016/17 with more favourable dam water levels. This volume will more than

meet domestic demand for cotton seed oil crushing and the feeding of whole seed to beef feedlots

and dairy herds. The surplus cottonseed will be destined for export markets.

Figure 22. Cottonseed production 1997/98 to 2016/17 (‘000 tonnes)

Source: ABARES

Figure 23 shows the volume of soybeans and sunflower grown. It is seen that there has been no

growth in volumes over the last 20 years. The majority of soybeans go into human food manufacture

and full fat soybean meal for animal feeding. The small size of Australia’s soybean crop and lack of

domestic soybean meal availability results in the importation of large volumes of South American

meal. The sunflower crop remains small relative to canola and cottonseed production and provides a

small volume of seed for crushing and sunflower meal availability.

Figure 23. Soybean and sunflower production 1997/98 to 2016/17 (‘000 tonnes)

Source: ABARES

0

200

400

600

800

1000

1200

1400

1600

1800

0

20

40

60

80

100

120

Sunflower

Soybeans


4. GRAIN END USE

4.1. Domestic versus export use volumes

The increase in grain production is shown in Figure 24 and illustrates an increasing production level.

This has provided an increasing grain export volume that on average is 63% of the total grain crop.

Grain retained in Australia for domestic use is an average 12.9MMT through the years 2001/02 to

2014/15. This grain is used in flour and malt production, industrial starch and ethanol, animal

feeding and retained seed for planting.

Figure 24. Grain Production 2001/02 to 2016/17 and Exports 2000/01 to 2014/15, excludes canola

and cottonseed (‘000 tonnes)

Source: ABARES Crop Reports

Wheat exports when expressed as a percentage of production are historically in the range 60-80%

(Figure 25). The forecast large 2016/17 wheat crop will result in a higher percentage of the crop

being supplied into export markets. Based on the domestic demand it is expected that close to 80%

of the 2016/17 wheat crop will need to be exported.

Figure 25. Percentage of the Australia wheat crop exported 2000/01 to 2014/15


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Production

Exports

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%


4.2. Wheat use in Flour Milling & Ethanol

There is a lack of published data available on Australian flour production, with ABS data collection

ceasing in June 2009. It is estimated that current flour production is 2.3MMT, with this requiring the

milling of almost 3.0MMT of wheat. Flour for human consumption through baking is the largest

demand, followed by industrial use for starch and ethanol production (Figure 26). Export of flour has

declined and represents a minor portion of flour milling production.

Figure 26. Australian flour production 1977 – 2016 (tonnes)

Source: 1977 – 2009 Flour Millers’ Council (ABS), 2010-2014 export flour ABARES, human consumption JCS Solutions estimate based on

domestic population growth, industrial JCS Solutions estimate.

NSW is the state with the greatest flour milling capacity at over 65%. The significance of the flour

industry for animal feeding is the supply of millmix as by-product that is readily utilised by feed

manufacturers. The volume of millmix available is related to the volume of wheat milled and the

efficiency or milling extraction rate. Based on typical extraction rates, the volume of millmix

produced is around 650,000 tonnes/annum.

4.3. Barley Use in Malt Production

Total use of barley in Australia for malting is 800k to 1 MMT per annum and around 200,000 tonnes

of this is used in domestic brewing, the balance of malt produced is exported. Domestic beer

consumption has been in decline with consumption replacement by wine and cider. The Australian

malting operations are dependent on processing for export malt markets.

Figure 27 shows the split in barley destination between domestic feed, malt and export. ABARES

crop reports in 2011 ceased to provide data for barley use in domestic malt production. Data from

2011/12 to 2015/16 is based on best estimates assuming domestic malt production has remained

relatively consistent.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Export

All Human Consumption

Industrial


The volume of barley used in feed varies with supply and price. The 2015/16 year has seen an

increase in barley inclusion in animal feeds as the price relativity between barley and wheat has seen

incentive for feed manufacturers to use lower cost barley across south eastern Australia.

Figure 27. Barley Use in Domestic Feed, Malt and Exported Surplus 2002/03 – 2014/15 (‘000

tonnes)


On average 70% of the Australian barley crop is used for animal feeding, either in domestic or export

markets. In large cropping years, as will occur in 2016/17, more barley typically enters the export

and domestic feed markets.

Figure 28. Barley use in either malt or feed markets (‘000 tonnes)

Source: ABARES Crop Reports 202/03 to 2010/11, ABARES 2011/12 – 2012/13 exports, JCS Solutions estimates 2013/14

Malting combings are a small volume by-product generated from domestic malt production and are used in animal feeding. Based on malting barley volumes, there is around 30,000 tonnes of malt combings generated around Australia annually.

0

2,000

4,000

6,000

8,000

10,000

12,000

Export

Malt domestic use

Feed

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Malt Barley

Feed Barley


4.4. Oilseed Crushing

The domestic canola oilseed crushing industry has continued to expand with further capacity

upgrades being completed in the last two years. There is no published statistical data on the volume

of canola seed crushed or the meal supplied to the domestic market. Best estimates from industry

sources is that the canola crush is approaching 1MMT with around 600,000 tonnes of meal being

supplied. Of this a small portion, 36,000 tonnes in 2014/15, was exported with New Zealand being

the major market destination.

Cottonseed crushing capacity generates 90 - 120,000 tonnes of meal annually. Additional smaller

volumes of sunflower, safflower and linseed meals are also produced.

The importation of soybean meal has continued to grow with over 700,000 tonnes being imported in

2014/15 (Figure 29).

Importation of other vegetable protein meals such as copra meal and palm kernel meal remain low

and subject to low demand from better seasonal conditions in pasture grazing for the dairy and beef

grazing sectors.

Figure 29. Vegetable protein meal exports and imports 1997/98 to 2012/13 (‘000 tonnes)

Source: ABARES

The importation of soybean meal has grown at a rate equivalent to the increase in canola meal

availability from Australian crushing plants as shown in Figure 30. The large imported soybean meal

volume raises a number of issues:

0

100

200

300

400

500

600

700

800Soybean Meal Import

Other Meal import

Canola meal export

Cottonseed meal export


Australia has been unable to develop a domestic soybean production sector capable of

justifying a soybean crushing plant to supply larger volumes of soybean meal.

Canola meal has not been used as a replacement for the growth in soybean meal use.

Soybean meal remains the dominant global protein meal commodity that governs Australian

protein meal prices.

Figure 30. Imported soybean meal and domestic canola meal supply 1997/98 to 2014/15 (‘000

tonnes)

Source: ABARES - domestic canola seed use extrapolated to meal supply if all crushed.

4.5. Grain Use in Animal Feeding Animal feeding remains the largest domestic end use for Australian grains. Based on total feed use of 13MMT, this is estimated to use 9.5MMT of grains annually. Although grain breeding and production is focused on human consumption of milling wheat and malting barley, the reality is that the greater volume of grain goes to feeding poultry, pigs, cattle and other livestock species either in Australia or overseas. This report identifies the trend in domestic feed use, with this provided by JCS Solutions based on available livestock data. Australia has no data collection of feed use and the data shown below is derived from available livestock production in terms of animal numbers or meat produced. Assumptions relating to feed conversion efficiency and feed intake have been made to calculate a projected feed use by industry sector and state. For some industries such as horses, there is no data on actual horse numbers and best guess estimates are included.

Total Australian predicted annual feed use (Table 3) for 2015/16 was 13.0MMT. Table 3 shows the split between states and livestock sectors. The data includes both compound feed manufactured through feed mills and feeds that are mixed on site, also referred to as home-mixed. The data excludes pasture, hay and silage intake for dairy, beef, sheep and horse feeding.

Due to more significant changes occurring in the beef feedlot and dairy feeding sectors that are discussed below, the 2016/17 feed use total is forecast to decline by 9.3% to 12.1MMT

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

Canola Meal domestic crush supply

Soybean Meal imported


Table 3. Feed use by industry sector and state (tonnes/annum) 2015/16

NSW Vic Qld SA WA Tas Total

Poultry Meat

1,007,832

714,102

651,817 583,091 191,231 28,160

3,176,233

Layer

282,134

218,426

263,931 59,157 72,809 13,652

910,109

Pig

253,389

328,207

361,421 308,488 195,864 8,206

1,455,576

Dairy

447,884

1,876,997

191,864 153,361 145,990 242,637

3,058,734

Beef

1,112,106

259,431

1,907,478 99,995 122,994 41,325

3,543,329

Sheep 28,905

48,441

3,938 33,833 128,364 2,839

246,320

Horse

138,127

92,804

93,164 22,542 18,105 6,235

370,977

Aquaculture 6,000 2,200

22,000 6,000 6,000 98,000

140,200

Other 36,722

56,306

21,797 9,787 14,472 4,649

143,733

TOTAL

3,313,099

3,596,915

3,517,409 1,276,254 895,829 445,703

13,045,210 Source: JCS Solutions estimates

The data within table 3 includes the following:

Poultry Meat – largely chicken but also includes duck, turkey and minor poultry species and breeding flocks to support these industries.

Layer – egg production including commercial layer farms and an estimate of “backyard” laying hen feed consumption.

Pig – commercial piggery operations.

Dairy – the concentrate based component of dairy cow intake - excludes pasture, hay and silage.

Beef – largely feedlot ration intake, plus stud cattle feeds and live cattle export feeds.

Sheep – lamb feedlot intake, supplementary feeds for breeding stock and live sheep export feeds.

Horse – breeding, performance and leisure feeds.

Aquaculture – manufactured feeds for salmon, trout, prawn, barramundi species, excludes wet pilchard feeds for tuna feeding.

Other – includes specialty feeds for other species such as goat, alpaca, ostrich, emu, laboratory animals, zoos, etc.

Feed Demand Trend and Outlook

The following Figure 31 provides a projection through to 2024/25 when feed demand reaches

14.6MMT. Feed use is based on livestock industry growth as discussed in the following relevant

sections of this report. For 2016/17 the projection is for feed demand to drop to 12.1MMT after

which demand will return to previous year growth rates. The assumptions behind this forecast are

presented below.


Figure 31: Total Australian Feed Demand to 2024/25

Assumptions made to provide 2016/17 and 2017/18 and further forward feed demand projections.

2016/17 2017/18 going forward

Poultry Meat 2.2% annual feed demand growth

rate

2.2% annual feed demand growth

rate

Poultry Layer 2.4% annual feed demand growth

rate


rate

Pig 0.5% annual feed demand growth

rate, less than recent years due to

lack of expansion investment


rate, less than recent years due to

lack of expansion investment

Beef 20% decline in cattle on feed Recovery as beef herd rebuilds

Dairy 10% decline due to low milk prices Recovery with increasing global and

local milk prices

Horse Static Static

Aquafeed 4.8% annual feed demand growth

rate


rate

Packaged Products Static Static

The projected annual feed volumes to 2024/25 are subject to a number of uncertainties that would

impact negatively on the livestock industries. These include:

0

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1. Exotic animal disease outbreak. Events that have occurred in the last 10 years are avian

influenza and equine influenza. These and other diseases could occur subject to there being a

breakdown in Australian biosecurity.

2. Seasonal conditions. A major drought is highly likely to occur within the next 10 years. If there

are dry years, not an extreme drought, this can have a positive impact on feed volumes as there

is lesser availability of pasture resulting in an increase in dairy feed use and supplementary

feeding sheep and cattle and beef feedlots finishing cattle. In the year or years that are affected

by a severe drought, it is expected feed volumes will drop due to high grain prices and lower

economics in feeding beef and dairy cattle.

3. Industry economics – either global commodity prices are depressed or the domestic market is

over supplied resulting in reduced prices and farmer viability.

4. Activist actions – as has occurred with live cattle exports in 2010, government intervention in

response to activists can impact livestock industries operating systems and viability.

5. Import approvals – Government decisions to open Australia to imports where there are

currently biosecurity controls stopping or limiting importation. Equivalent to what happened

with pig meats in the 2000’s.

6. Chicken meat and egg consumption – will these continue to grow at existing rates or hit a

consumption plateau.

7. Population growth - continues at the existing rate resulting in growth in domestic demand for

livestock products.

8. Food safety event – results in loss of confidence and consumption of a particular livestock

industries products.

The increase in feed demand to 2024/25 has been broken down into forecast change by State. This

estimate includes assumptions relating to which livestock sectors and states will grow faster than

others.

Table 4. Feed Volume Increase 2015/16 to 2024/25

NSW Vic Qld SA WA Tas Total

Increase - tonnes 379,431 329,168 403,907 253,266 153,586 99,544 1,616,646

Increase - % 11.5% 9.2% 11.5% 19.8% 17.1% 22.3% 12.4%

Tasmania is projected to have the highest growth rate due to the increase in aquafeeds and dairy

feeds. They are however both coming from low volume bases and overall volume remains small

relative to other states.

South Australia and Western Australia benefit from a faster expansion of intensive pig and poultry

feeding resulting from more favourable grain prices, land available for farming operations and more

agreeable environmental approval processes.

Queensland and NSW rate of growth in percentage terms is lesser but in volume terms are the

highest. This is due to expansion in poultry production growth.

Victoria is projected to be the slowest in growth as broiler and dairy feed use is projected to have limited further growth potential.


Feed Volume Change over Time

The change in volume of feed used by each of the five major livestock use industries is shown in Figure 32. Total feed use has increased from 9.5 MMT in 1999/00 to 13.0 MMT in 2015/16. The beef feedlot industry has seen considerable growth since 2008/09 and during 2015/16 exceeded the feed volume used during 2006 to 2007. Poultry meat feed use is seen to be the most consistent in growth rate. During 2015/16 the three larger feed use industries in poultry meat, beef and dairy all exceeded 3 MMT.

Figure 32. Feed use by industry sector by year 1999/00 to 2015/16 (tonnes/annum)

Source: JCS Solutions estimates

The relative rate of increase of the major livestock industries is shown in Figure 33. This data has been compiled by JCS Solutions from published production data and provides an indexed growth rate (base year 1993/94) to demonstrate the relativity between livestock industries and the grains industry. Growth has been defined in volume production terms as follows:

Grain – wheat crop tonnes

Chicken Meat – tonnes

Laying hens – flock size

Beef Feedlot – number turned off

Pig Meat – tonnes

Dairy – tonnes grain use (cow herd number X kg grain/lactation)

The beef feedlot and chicken meat industries have shown the greatest growth. The dairy sector after growing rapidly through to 2005 has plateaued. The layer industry is seen to be in a growth stage following a number of stagnant years in terms of flock size. The pig industry remains relatively flat in terms of pig meat production. The grains industry as defined in terms of wheat production has grown by 50% over the 22 year period.

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Dairy

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Poultry Meat

Pig

Layer


Figure 33. Industry growth 1993/94 to 2015/16, indexed from 1993/94

Sources: Derived from ABS, ALFA, Dairy Australia, AECL

Feed grain use by the domestic livestock industries, as shown in Figure 34, is compared against wheat production. Grain production is seen to be growing at a marginally slower rate than livestock production. However due to the greater volume of grain produced, relative to domestic grain demand, the growth in grain production has been sufficient to meet livestock industry use. What figure 34 clearly illustrates is the impact severe droughts have on grain production. If Australia always had at least average grain production years, there would be no grain supply security problems for domestic feed grain users. The large wheat crop forecast for 2016/17 is seen to lift the grain production index above that for livestock demand, where 2016/17 will see a decline in feed grain use for livestock feeding in the beef feedlot and dairy sectors. Figure 34. Australian domestic livestock feed grain use and wheat production, indexed from 1993/94

Sources: ABS, Dairy Australia and JCS Solutions estimates

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Livestock Grain Use

Grain Production


Domestic Grain Use Of the 13MMT of feed used in Australia in 2015/16, this is estimated to have contained 9.5MMT of grain. When flour milling, malting and seed retained for sowing are included, the total volume of grain used domestically is 14.2MMT. Grain use in animal feeding IS considerably higher than that in domestic flour milling and malting production. 2016/17 will provide a large surplus of grain, estimated to be in excess of 28MMT that is available for export. Figure 35 illustrates the consistent grain production and surplus available for export since the 2006/07 and 2007/08 drought years. Figure 35. Grain use by sector 1993/94 - 2009/10 (tonnes)

Sources: JCS Solutions derived from published industry data

4.5.1. Beef Sector

Beef Feedlots Cattle on feed data released by ALFA, shown in Figure 36, identifies that the beef feedlot industry in 2015/16 exceeded the number of cattle on feed in the 2006 record period. There is seen to have been relatively consistent growth, with cattle on feed just falling short of one million head in the December 2015 quarterly report. At the time of writing, the July-Sep 2016 ALFA survey is yet to be released. Based on reported high store cattle prices, difficulty in sourcing suitable cattle and negative feeding margins it is anticipated that there will be a significant fall in cattle on feed. Industry sources are suggesting the figure may fall to 700 – 800,000 cattle on feed during 2016/17. This has already been seen with less demand for feed grains in the Queensland and northern NSW markets.

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35,000,000

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45,000,000

Export Surplus

Seed

Malting

Flour

Feed


Figure 36. Cattle on feed, national quarterly data 1999-2016 (head)

Source: ALFA/MLA Quarterly Feedlot Surveys

The share of cattle on feed (Figure 37) shows the dominance of Qld and NSW. Both states have seen an initial drop in numbers through the first half of 2016 that will continue through the year. Figure 37. Number of feedlot cattle on feed by state 1999-2016 (head)

Source: ALFA/MLA Quarterly Feedlot Surveys

With the fall in cattle on feed and lack of feeding profitability, there is surprisingly activity in feedlot capacity expansion. It is yet to be seen the level of expansion relative to some feedlots that could

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Vic

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WA


either reduce activity or exit the industry. The forecast for 2017 is for tight store cattle supply as graziers finish steers on pasture and hold heifers for breeding purposes. The number of females slaughtered during 2013-2015 was above historic levels (Figure 38) and resulted in a decline in the national breeding herd. It will take 2-4 years for the breeding cow numbers to rebuild, until this occurs there will be a shortage of cattle for feeding. MLA has forecast that numbers of cattle being slaughtered in 2017 will decline by 2 million head from over 9 million head in the 2014 and 2015 years. Figure 38. Australian female cattle slaughter - ‘000 per month

Source: ABS

Beef Supplementary Feeding Significant volumes of feed products were used in supplementary feeding cattle through the dry years experienced in northern Australia. Rainfall occurring during 2016 has provided ample pasture production for cattle remaining on grazing properties. Figure 39 sourced from The Long Paddock shows rainfall for the last six months, with much of Australia receiving above average rainfall. For the remainder of 2016 there is limited demand for cattle supplements apart from some potential for dry pasture feed supplementation when pastures dry out. Figure 39. Rainfall Percentile 6 Months – April to September 2016

© The State of Queensland (Department of Science, Information Technology and Innovation) 2016.

050

100150200250300350400450500

https://www.longpaddock.qld.gov.au/rainfallandpasturegrowth/index.php?area=aus


Live Cattle Export Feeds The growth in live cattle exports are shown in Figure 40 with over 1 million head exported for each of the last three years. In 2015/16 cattle destined for slaughter were 88.6% of live cattle exported, the balance being beef and dairy breeder cattle. The Northern Territory, WA and Qld are the three main export states, with ports located on the north of each state shipping the greatest volume. Breeding stock are largely exported from southern ports.

Figures 40 and 41. Live cattle exports for Australia and by state 2000/01 – 2015/16 (no. head)

Source: MLA LiveLink export statistics The growth in live cattle exports, particularly those from Vic, SA and Fremantle WA have provided an increase in demand for cattle feeds that include higher roughage content.

4.5.2. Dairy Industry

The dairy industry has experienced the greatest volatility in terms of milk prices, milk production, feed demand and farmer confidence. The sudden drop in milk prices, announced by the two largest milk processors in April 2016, has had a major impact on the industry. Within the last FGP report the dairy industry was seen to be either heading for an optimistic growth period or alternately would continue a slow decline in terms of national milk production volume. The last six month period has resulted in the industry contracting further with the 2015/16 production volumes being 9.5 billion litres. The outlook for 2016/17 from Dairy Australia, is for a decline in milk production as low milk prices has resulted in a reduction in the national herd size as some producers have existed the industry and others reduced herd size. There has been a reduction in concentrate feeding rates as farmers are not encouraged to chase higher milk yields at present milk prices. Figures 42 provides an optimistic and pessimistic prediction of milk production through to 2020/21. Dairy Australia data, shown in Table 5, confirms that milk production for July to August 2016 has fallen nationally by 9.7%. The greatest decline in production has occurred in Tas, Vic, SA and NSW. The production drop will continue through 2016/17 and national milk production will fall to around 9 billion litres for the year. The outlook for 2017/18 and global milk prices remain more positive for the Australian dairy industry. The medium to long term question is whether the dairy industry will respond with a period of expansion, both additional herds and cow numbers, or alternately the industry continues a slow process of decline. Even under the optimistic outlook presented below, national milk production is unlikely to reach 10 billion litres by 2021 and remains significantly below the 1999 to 2003 production years.

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700,000

WA

NT

QLD

VIC

NSW

SA


Table 5. Milk production July - August 2015 versus 2016

NSW VIC QLD SA WA TAS AUSTRALIA

% change 16/17 & 15/16

-8.0% -10.7% 1.2% -16.7% 1.0% -13.3% -9.7%

Source: Dairy Australia

Figure 42. National milk production 1994/95 to 2020/21 (‘000 litres)

Source: Dairy Australia 1994/95 to 2015/16, 2014/15 to 2018/19 JCS Solutions data two scenarios

Prior to this year’s drop in milk prices, Tasmania has been the state experiencing growth in milk production, reaching 900,000 billion litres (Figure 44). The last two years has also seen a turnaround in NSW, with milk volume increasing. In contrast to these states, milk production in Qld and SA has continued to decline. Victoria as the dominant dairy state consistently produces around 66% of Australia’s milk. Figures 43 and 44. Milk production by state 1993/94 to 2015/16 (billion litres)


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WA

Optimistic scenario

Pessimistic scenario


The average herd size per farm continues to grow as shown in Figure 45. WA and Tas have the largest dairy herds with both these states having increased significantly over the last ten years. The increase in herd size is assisting in compensating for total cow numbers as farmers exit the industry. Data on the national herd size and number of dairy farms is yet to be released for 2015/16. It is anticipated that the exit of farmers due to milk prices will result in a more significant fall in total dairy cow numbers from the previous 1.6 to 1.7 million cows in milk. Figure 45. Average herd size for each state 2005/06 to 2014/15 (number of cows per herd)


Milk yield per cow per lactation has not increased over the last eight years (Figure 46). Based on national production declining in 2015/16 it is expected that the 2015/16 milk yield per cow will not have increased. Based on low milk prices during 2016/17, there is expected to be a drop in average production per cow. With this highly likely, we will have had no production increase per cow in the last ten year period. Based on the genetic capacity of cows being bred, the low production rates in global terms, represents a major loss of production volume capacity. Figure 46. Milk production 1994/95 to 2014/15 (litres/cow/lactation)

Source: Dairy Australia data.

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NSW

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QLD

SA

WA

TAS

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Figure 47 provides data on average grain/concentrate feeding rates from 1994/95. Data is published by Dairy Australia based on farmer survey results. No data is available for 2015/16 and an estimate of feed use has been provided together with estimates through to 2020/21. The 2015/16 year provided contrasting outcomes in terms of dairy concentrate feeding rates. The first 9 months were characterised by increased feed use based on reasonable milk prices and dry spring and summer conditions across Victoria and Tasmania. From April to June 2016, feed demand was impacted by the announcement of low milk prices, together with increased culling of older cows and farmers drying cows off early. For 2016/17 feed use is forecast to remain lower at an average 1.55 tonnes/cow/year. Apart from the continuing low milk prices, better spring rainfall and pasture production is allowing dairy farmers to cut back on feeding rates. It is anticipated that for 2017/18 as milk prices increase, there will be more incentive for feeding and feed use will return to levels seen in prior years. This projection assumes there are no severe drought years that results in higher feeding rates. Figure 47. National average grain/concentrate intake 1994/95 to 2020/21 (kg/cow/annum)

Source: Dairy Australia, 2015/16 to 2020/21 JCS Solutions projection

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4.5.3. Poultry Meat

During 2015/16 chicken meat production increased in line with the previous 4.5% per annum average 20 year growth rate (Figure 48). Based on this growth continuing, it is projected that chicken meat production will reach 1.35 million tonnes in 2019/2020. Figure 48. Australian Chicken Meat Production (tonnes)

Source: ABS 1993/94 – 2015/16, 2016/17 to 2019/20 JCS Solutions data predictions

The chicken meat industry is undergoing some significant changes in terms of where the industry is shrinking versus other regions that are destined for growth. Based on public announcements, Inghams are exited from production in Sydney/Newcastle, with further expansion to occur in SA and south east Queensland. In contrast Baiada have announced they are ceasing production in Victoria in early 2017, with their expansion to occur in NSW (Griffith and Tamworth) as well as South Australia. With expensive real estate around Sydney/Newcastle and Melbourne, there is a relocation of chicken meat production occurring. This is allowing the major processors to consolidate breeding, hatching, feed production, growout farms and processing plants. Chicken meat is seen to be easier to transport between states. The growth of SA is shown in the combined SA/WA/Tas production (Figure 49). The major growth in terms of the construction of new growout farms over the next five years will occur in NSW and SA. What is less certain is whether existing growers for Ingham in NSW and Baiada in Melbourne are taken up by other independent chicken meat companies or a majority of this production capacity is lost and/or replaced by new shedding in other regions. Figure 49. Chicken meat production by state 1997/98 to 2015/16 (tonnes)

Source: ABS

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Chicken meat production growth is coming directly from growing more birds. Figure 50 identifies that carcase weight has remained stable in recent years, indicating that the weights birds at killed at are meeting market requirements. Figure 50. Relative increase in total chicken meat produced, number of birds slaughtered and average carcase weight 1997/98 to 2015/16. Date indexed to 100 at 1997/98.

Source: ABS

Chicken Meat Consumption Gidley-Baird (2016) noted that in Western cultures there is a limit to the amount of chicken people will eat. Over the last 20 years, consumption has plateaued at 45 kilograms per year in Western countries.

Australian chicken meat consumption has reached this level and there is a question as to whether there will be any slowing of domestic consumption rates in coming years. Population growth is at 1.5%, this being considerably lower than the 20 year chicken meat industry growth of 4.5% per annum. The Australian industry is domestic market focused, and unless there was a move to increase export products, we may see a ceiling on chicken meat consumption over the next decade.

The price competiveness of chicken meat has been strengthened through record beef and sheep meat prices. With further gains in genetics and new shedding the chicken meat sector is set to remain highly competitive against other meats.

To date there has been growth in free range production. However the introduction of RSPCA approved production, based on alternate production standards, has been used by the industry and supermarkets to present an alternative to free range production. Organic chicken meat production has remained very low volume niche production.

4.5.4. Layer Industry

The Australian egg industry has been undergoing a growth phase as consumption of eggs has been increasing more rapidly than population growth. Figure 51 shows that over the last six years the rate

100

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200Total meat produced

No Chickens slaughtered

Ave carcase weight

https://www.rspca.org.au/what-we-do/rspca-approved-farming-scheme

https://www.rspca.org.au/what-we-do/rspca-approved-farming-scheme


of growth has increased, although no data is available from AECL for 2015/16. Based on the most recent growth rate, if this continues the laying flock will exceed 20 million hens by 2020. Figure 51. Australian Laying Hen Flock (000’s)

Source: 1996/97 -2006/07 ABS, 2007/08 – 2014/15 AECL, 2015/16 – 2020/21 JCS Solutions data predictions.

Figure 52 shows the rise in egg consumption with this jumping from a flat 160-170 eggs per person prior to 2003 to 210-220 eggs in 2012-14. Figure 52. Egg consumption (eggs/person/year)

Source: AECL

The market swing to free range eggs is seen to have stabilised through 2012-2015, with cage eggs retaining 50% market share (Figure 53). The operation of large scale cage production farms provides a large volume of eggs that cannot be easily or quickly converted to free range supply. The significant move in the last twelve months has been government involvement through consumer affairs ministers in introducing a new national standard for free-range egg production, this including

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10,000

15,000

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25,000


stocking density at a maximum 10,000 hens/hectare. Egg packaging must state the actual stocking density in use for free range eggs. This move provides increased certainty for producers looking to expand in free range egg supply. For the significant investment in cage systems, there remains uncertainty as the major supermarkets are endeavouring to reduce or cease their sales of cage eggs. Apart from the loss of capital invested in cage systems, there would need to be major investment in larger scale free range farming operations to replace cage farms. Compared with laying hens kept in cages, the maintenance requirement in alternative systems is higher due to the increased activity of the hens. It has been calculated at +10% for hens producing barn eggs and +15 % for hens using free range. This higher maintenance requirement results in additional feed use as the proportion of eggs from free range production increases. Figure 53. Retail egg sales by production system 2002/03 to 2-14/15 (%)

Source: AECL retail survey data

4.5.5. Pig Production

The last eight years has seen consistent growth in pig meat production, averaging 2% per annum. This rate of growth, if it continues, will put national pig meat production in 2020/21 at a level equivalent to that seen at the peak of the industry in 2002/03 (Figure 54). Figure 54. Australian Pig meat production 1993/94 to 2020/21 (tonnes)

Source: ABS, 2016/17 to 2020/21 JCS Solutions data prediction

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ABS data as shown in Figure 55 provides the trendline change in the sow breeding herd. No ABS data has been released for 2015/16, but based on the increase in meat production and rise in the number of pigs slaughtered an estimate of 276,000 breeding sows is included. Should the industry continue to grow the sow breeding herd has the potential to reach 300,000 sows by 2020. Figure 55. Australian Breeding Herd Number of Sows – ‘000s

Source: ABS

In terms of pig meat production by state there continues to be some shift in the location of pig farms and where pigs are being processed. Figure 56 shows the continuing decline in NSW, moving from the largest production state to the second smallest in the space of less than ten years. This has occurred as many smaller and older pig operations have closed and the relative difficulty in obtaining required approvals for the construction of new piggeries in NSW. With the closure of some pig processing abattoirs in NSW, there is added pressure in transport costs to move pigs longer distances for slaughter, with this putting further pressure on NSW producers. WA is seen to be the state undergoing industry expansion, with new operations coming into production through 2014 and 2015. These are largely free range piggery operations utilising available land suited to pig production. SA, Vic and Qld are of an equal size producing the greatest volume of pig meat. Figure 56. Pig meat production by state 1993/94 to 2015/16 (tonnes)

Source: ABS, 2013/14 extrapolated from ABS 10 month data, 2014/15 JCS Solutions data prediction

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There would appear to be a slowing in the growth of pig meat imports as shown in Figures 57 and 58. Pig meat imports in 2015/16 at 166,000 tonnes represents around 30% of pig meat used (both domestic production and imported pig meat). The increase in pig meat imports is in line with the growth in the domestic production rate. Figure 57. Pig meat imports 2001/02 to 2015/16 Figure 58 Imported pig meat as a % of total (tonnes) (domestic plus imports) 2003/04 to 2015/16

Source: ABS

4.5.6. Sheep

Similar to the grazing beef sector, the sheep industry has been influenced by climatic conditions and

favourable rainfall for pasture grazing. This has led to a decline in the need for both supplementary

feeding as well as lamb feed lotting. However due to the high value of breeding stock there is more

financial incentive for producers to ensure their breeding ewes and lambs are well fed. Feed

volumes for this use are however low relative to other livestock industries.

Live sheep export

The greatest demand for sheep feeds is in supplying feed for prefeeding and shipping of live sheep. The number of live sheep exported from Australian ports seems to have stabilised at around 2 million head annually, shown in Figure 59. There were no shipments from Portland Victoria during 2015/16 and limited numbers shipped from Adelaide. Fremantle is the only port shipping larger numbers of sheep.

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Figures 59 and 60. Live sheep exports for Australia and by state 2001 - 2013 (no. head)

Source: MLA LiveLink export statistics

4.5.7. Aquaculture

The Australian aquafeed market is heavily weighted to the demand for salmon feeds in Tasmania.

Lesser volumes of trout, barramundi and prawn feeds are used.

Atlantic Salmon production is more significant in the demand for feeds. Tasmanian production

commenced in the mid 1980’s and takes advantage of the cold and clean waters. The Tasmanian

industry now produces almost 47,000 tonnes per annum (Tasmanian Salmonid Growers

Association). The industry is reliant on the supply of manufactured feeds. Salmon feeds are required

to be extruded and manufacture is highly technical to ensure the right pellet density and floating

and sinking specifications. Based on a feed conversion ratio of 1.4:1 current salmon feed use is

66,000, based on the industry forecast growth this will increase to 78,000 tonnes by 2019/20.

Trout farming is based in the Snowy Mountains and Victorian Alpine regions. The requirement is for

the supply of cold water. The trout industry has declined with less favourable high summer

temperatures and resulting water temperature increases having a significant negative effect on

production.

Prawn farming is significant in Queensland where 93% of farmed prawns are produced. North coast

NSW farms have struggled to survive. The Australian Prawn Farmers Association places prawn

production at 5,000 tonnes in 2014, ABS figures put prawn production at 3,774 tonnes. A major new

prawn farming development is planned for Western Australia that would become the largest

Australian producer.

Barramundi production has been a growing market with freshwater inland farms being built. The

largest operation is in the Northern Territory.

The Southern Bluefin Tuna industry in South Australia commenced in 1991. Since its start, it has

relied on feeding baitfish (pilchards or sardines) to tuna kept in sea cages. Although there has been

large expenditure spent on the development of manufactured feeds, the majority of tuna are still

fed baitfish. Fresh caught sardines represents 80% of bluefin tuna feeding, the remainder is

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imported as frozen fish mainly from California. A total of around 75,000 tonnes of baitfish is used in

Bluefin tuna feeding. A small quantity of manufactured feeds are in use.

4.5.8. Horse Industry

Since the last FGP report, there is no known published statistical data on horse numbers in Australia. Historic reports put the Australian horse population at 800,000 to 900,000 horses, this excluding wild horses. Without the availability of any data limits the ability to project estimated feed use volumes and trends in the industry.

5. REFERENCES

Australian Bureau of Agricultural and Resource Economics and Sciences, Australian Crop Report,

September 2016.

Australian Bureau of Agricultural and Resource Economics and Sciences, Australian Fisheries and

Aquaculture Statistics 2014, December 2015.

Australian Bureau of Statistics 2016, 7121.0 Agricultural Commodities.

Australian Bureau of Statistics 2016 7215.0 Livestock Products Australia.

Australian Egg Corporation Limited 2015, AECL 2015 Annual Report.

Australian Lot Feeders Association 2016, ALFA/MLA National Accredited Feedlot Surveys

Dairy Australia, 2016, Latest Production and Sales Statistics

http://www.dairyaustralia.com.au/Markets-and-statistics/Production-and-sales/Latest-

statistics.aspx

GIWA, Crop Report 4 October 2016

Previous FGP Feed Grain Supply and Demand Reports are available on the FGP website

http://www.feedgrainpartnership.com.au/fgp_activities/information_sharing__supply_and_demand

_analysis/

http://www.dairyaustralia.com.au/Markets-and-statistics/Production-and-sales/Latest-statistics.aspx

http://www.dairyaustralia.com.au/Markets-and-statistics/Production-and-sales/Latest-statistics.aspx

http://www.feedgrainpartnership.com.au/fgp_activities/information_sharing__supply_and_demand_analysis/

http://www.feedgrainpartnership.com.au/fgp_activities/information_sharing__supply_and_demand_analysis/

australian feed grain supply and demand report 2016 · the 2016/17 winter crop harvest is expected...

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