December 2, 2011

Feedlots Consuming More Grain Domestically in Mato Grosso

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The state of Mato Grosso has the largest cattle herd in Brazil (29 million head) and it is the largest grain producing state as well, which has encouraged an increase in feedlot operations in order to use more of the excess gain domestically. Currently, the state of Goias has the most number of cattle in feedlots, but with the current trend, Mato Grosso will assume the number one position in the near term.

According to the Mato Grosso Institute of Agricultural Economics (Imea) and the Cattle Producers Association of Mato Gross (Acrimat), the amount of cattle on feedlots in the state increased 29% in 2011 to 763,900. Over the last six years, the amount of cattle on feed in the state has increased fivefold. The state also produces 6.7 million hectares of soybeans and 2.0 million hectares of safrinha corn production. Therefore, farmers are anxious to use more of their grain production locally instead of paying high transportation costs to get the grain to livestock producers in southern Brazil.

Feedlot operations in the state are of two types. The traditional feedlot operation is where the cattle are placed to be finished before slaughter. The other type could be called semi-feedlot operation where the cattle are placed on feed just during the dry season (May to September) when pastures are dry and the cattle generally lose weight. When the rains return in September, the cattle go back out on pasture. Not only does this reduce the time required for the cattle to reach market weight, cattle prices are also generally higher at the end of the dry season due to the lack of supply. In addition, since less pasture is required for the cattle, farmers can convert some of the excess pasture for additional soybean production.

Imea estimates that 50% of the feed used in the state's feedlots is produced by the feedlot operators. The composition of the feed is generally 58% corn, 10% sorghum, 8% soybean meal, 8% cotton seed, 8% soybean hulls, in addition to millet and other ingredients.