Australian Lot Feeders' Association (ALFA) president Jim Cudmore attritubed the increase to a weaker Australian dollar, and lower feeder cattle and grain prices.

In all the number of cattle on feed rose from 622,689 to 719,379, while utilisation of feedlot capacity rose from 55pc to 59pc, ALFA reported today.

"Notably feedlot cattle numbers increased in all states with the majority of the growth (52pc) in Queensland (as dry weather increased yarding numbers) followed by WA (20pc), NSW (12pc), Vic (11pc) and SA (5pc)," Mr Cudmore said.

"Over the quarter the Australian dollar declined by 24pc against the US dollar, 32pc against the Japanese yen and 2pc against the Korean won.

"In addition, national saleyard feeder cattle prices averaged 4pc lower than the previous quarter while feed grain prices declined by an average of 23pc due mainly to fuel price reductions and increased domestic and international supply."

However, Mr Cudmore said the outlook was being tempered by the global financial crisis and its impact upon the demand for beef.

Meat & Livestock Australia's chief market analyst, Peter Weeks, said conditions have stagnated beef trading and created worldwide beef demand uncertainty.

"The return of the US into our major export markets has also impacted upon the industry and, in combination with slower economic conditions, grain fed exports fell in 2008," Mr Weeks said.

"Grain fed exports into our major market Japan, declined 8pc for the quarter and 13pc for the 2008 calendar year.

"Similarly, grain fed exports into Korea were down 10pc for the quarter and 24pc for the year."