Cattle producers move towards grain-fed beef as consumer demand and drought risks rise

Australia Broadcast Center

5 days ago

As cost-of-living pressures force many shoppers to tighten their purse strings, premium meat options like grass-fed beef are getting harder to sell, and cattle producers are taking note.
Across Australia they are opting to feed their stock grain rather than relying on pasture, both to meet consumer demand for cheaper meat and protect themselves from drought.
While an abundance of grass on western Queensland grazier Josh Phelps's Tambo property might be reassuring right now, he said previous droughts had taught him not to rely on temporary feed.
"We're really tending towards the grain-based model," he said.
Initially his stock graze on pasture across 19,000 hectares before being finished in a feedlot — a purpose-built facility where cattle are kept in large outdoor pens and fed a consistent diet for up to 120 days.
"We've had a run of [good] seasons which we're very grateful for," he said.
"To be honest, it's been a bit of a healing period. Those terrible teens are still front of mind for some people, but I think we came through that and learned a lot of lessons.
He said the approach not only ensured the animals had a reliable source of food in dry times, but also produced a more consistent animal before being sold to meatworks.
"It creates a lot more control and a bit of a safety net," he said.
But it was not just drought that pushed the producer in this direction.
Mr Phelps said increasingly red meat consumers were being lead by price.
"In the end it comes down to the consumer," he said.
"They're just happy to buy that regular cut from the supermarket which is generally grain-fed.
Mr Phelps is one example of a trend toward grain-fed beef that is playing out across the country with more cattle in feedlots at the start of 2025 than ever before.
Erin Lukey, senior market analyst with Meat and Livestock Australia, said 1.5 million head of cattle were in feedlots in the first quarter of 2025, up 11 per cent on the previous year.
"The grain sector has grown drastically and consistently, especially in the last five years," Ms Lukey said.
"Nationally we have 90 per cent utilisation, which is how full pens are.
"Feedlots as a drought mitigation tool has also increased in popularity."
According to MLA, which researches and markets Australian beef globally, Queensland feedlots are at 93 per cent capacity and New South Wales are at 91 per cent.
With feedlots so full, meat processors have limited capacity to take new animals, but Ms Lukey said that would not stop producers making the switch.
"More grain-fed product is going to flow to the processor," she said.
"Which means we're going to produce more grain-fed beef."
Stefan Vogel, general manager of research at Rabobank, said most of the beef on Australian shelves was grain-fed or finished on grain, and consumer habits had a large impact on production.
"When they [customers] go to supermarkets, they're trying to find ways to save money and increase the value of their basket," Mr Vogel said.
"There's a demand for quality products at a reasonable price.
"Feedlots play an integral role not only for the local consumer but also for Australia as a reliable supplier of meat in the global market."