Six thousand Black Angus cattle at the Gundamain feedlot in New South Wales are bulking up on a diet of rolled barley, silage, cottonseed, and molasses, gaining up to 50% of their body weight over 90 days to reach around 600 kg (1,323 lb). This rapid fattening process is designed to meet growing global demand for high-quality grain-fed beef.

Gundamain is part of a structural shift in Australia’s cattle industry. The country, with vast pasturelands and a relatively small population, has become the world’s second-largest beef exporter, shipping $8.6 billion worth of meat in the first nine months of 2025, according to customs data. Feedlots are helping Australia supply beef more consistently while gaining market share from U.S. exporters, particularly in Asian countries that favor grain-fed meat.

“We're constantly being asked for product,” said Tess Herbert, whose family owns Gundamain. The feedlot plans to double its capacity to 12,000 head in the coming years to meet rising demand.

Rapid Rise of Grain-Feeding

Industry data shows the number of cattle on feed in Australia hit a record 1.6 million in June 2025, up from 1 million five years ago. Analysts project this number could reach 2 million by 2027, meaning roughly half of all Australian cattle will pass through feedlots before slaughter, up from 40% today.

This growth contrasts with the United States, historically the pioneer of feedlots and largest producer of grain-fed beef. Prolonged droughts have reduced U.S. cattle numbers to their lowest level since the 1950s. As of November 1, 2025, the U.S. had 11.7 million cows on feed, down 260,000 from a year earlier. The USDA forecasts a decline in U.S. beef production this year and next.

“An acceleration in demand has driven the growth,” said Grant Garey, president of the Australian Lot Feeders’ Association. “Reduced production from the U.S. is definitely playing a role.”

Feedlots, which have been used in the U.S. for nearly a century, provide energy-dense diets that produce larger, fattier cuts prized by consumers. Australian grain-fed beef exports rose to 324,421 tons in the first nine months of 2025, up from 224,230 tons during the same period in 2020. Most of this meat is exported to Japan, South Korea, and China, while U.S. exports to these markets have declined in recent years.

Supply Security and Profitable Expansion

Beyond market access, feedlots mitigate Australia’s weather volatility, providing a more reliable supply chain independent of rain and grass availability. “It gives you security over your supply chain,” said Matt Dalgleish, a meat and livestock analyst.

Analysts forecast continued expansion. Simon Quilty of Global AgriTrends expects cattle on feed to reach 1.75 million next year and 2 million by 2027, driven by strong profits and demand. Major operators include Mort & Co, JBS, NH Foods, and Teys Australia, which is owned by U.S. agribusiness giant Cargill.

However, Australia is unlikely to replicate the U.S., where over 90% of cattle are grain-fed. High feedlot construction costs and expectations of U.S. production recovery are limiting new investments. Moreover, there is growing demand for grass-fed beef, considered less industrial and more sustainable.

“We’re moving toward a 50-50 market between grain- and grass-finished cattle,” said Dalgleish. “Grain-finished animals are the most lucrative, but there’s a growing premium market for grass-finished. Australia is in a strong position to serve both.”