Puzzling global trend: more and more cattle finished on grain despite rising grain prices

Feedlot from above

A paradoxical trend, grain finishing of cattle in so-called feedlots has been gradually or drastically replacing pasture finishing despite the current high grain prices. How could this happen, when, logically, increasing grain prices should favour a move towards pasture finishing rather than away from it? Increasing scarcity of grassland is the main reason.

Grassland is frequently being converted into cropland because high crop and grain prices make production on lower yielding land profitable, where it was not profitable before. As the total amount of land does not increase, other locations and shorter fattening periods are required for cattle, since the remaining grassland has to be used for suckler-cows producing calves.

Feedlots are production units used to finish cattle on high energy rations based on corn and other grains for a period of three to five months. The largest of these farms can hold 100,000 animals at one specific point in time. While feed-lotting has been common practice in countries like Canada, the USA, South Africa and parts of Australia for many years, it has now expanded to countries which were famous for their pasture beef.

For example, in Argentina, feedlots now have an estimated share of 50 percent of total beef production. Brazil is another country where feedlots are expanding, but mainly to overcome seasonal drought periods and at a level of less than 10 percent of total production. With land competition increasing further, it can be expected that the trend towards grain-finishing will continue in other countries as well.

Click here for more feedlot analysis:

• C. Deblitz: Working Paper 2/2011 as PDF "Feedlots – a new tendency in global beef production?"
• C. Deblitz, K. Dhuyvetter, L. Davies: Working Paper 2012/4 as PDF "Benchmarking Australian and US feedlots"