The feedlot industry is now well established in Australia with feedlots being either small opportunity feedlots or much larger commercial feedlots. The industry sells into a stable domestic market which consumes 40% of feedlot beef and there is also a large export market, mostly to north Asia. As well as being an export earner, the industry is an important adjunct to the Australian pasture-fed cattle industry and also provides a flow-on benefit to other associated industries. Australian feedlots are situated in the grain growing regions of Queensland and New South Wales with the export feedlots finishing largely British breed steers on a grain based diet for export to Asia. A high percentage of feedlots (85%) are situated in the summer dominant rainfall area which is known for its high summer temperatures and humidity. Considerable research has been conducted into the effect of shade in feedlots in the southern states of the USA, with the earliest and best known being that by Bond and associates in California. The universal finding from the Californian work was that shade reduced radiant heat loads impacting on feedlot animals and improved the production of feedlot cattle. Animal welfarists are concerned with the welfare (well being) of animals and usually accept that animals can be used for food, fibre, other products and recreation, providing they are well cared for in the process. Animal welfare groups are quite active in Australia and keep a watching brief on animal production systems, especially intensive systems. Australian Governments have responded to public concerns by conducting a Senate Enquiry into Animal Welfare and encouraging the development of Codes of Practice for animal production systems. A number of definitions of 'welfare' have been put forward and they usually embrace the physical and mental well being of the animal, while 'good welfare' is often defined as when an animal does not have to make excessive adjustments in its internal physiology or behaviour to live and produce in an environment. 'Excessive adjustments', presumably, mean behavioural adjustments (e.g. open mouth breathing) and physiological adjustments (e.g. elevated rectal temperature) in an attempt to cope with the particular environment. Factors which describe or measure welfare include; provision of water and food, environmental temperature, social relationships, health, productivity, behaviour, physiological functions, biochemical functions, preference tests, frustration and housing. Cattle running in extensive systems in Australia have access to (and use) shade and do not suffer from heat stress. Open mouth breathing is not seen in grazing beef cattle at Alice Springs, for example, because cattle stand in the shade on hot days.In the feedlot industry in Australia, animal welfare groups are concerned about close confinement, boggy conditions and provision of shade. Close confinement is unlikely to be the issue in the feedlot industry that it is for the poultry industry because cattle are given 15 m2 of yard space per head which appears to be adequate. Much progress has been made by researchers in recent years in relation to boggy conditions by improving the design, hydrology, solid and liquid waste management, feedlot pad management and environmental sustainability of feedlots. Little interest has been shown in the benefit of shade to Australian feedlots and it is prudent and timely that a scientific approach be taken to investigating the benefits of shade.In the Chino Valley of California, 700 dairy cows died in a three day period as a result of unusually high temperatures being aggravated by unusually high humidity associated with a tropical storm. Adequate shade reduced the amplifying effect of radiation, coupled with high humidity and air temperature so that deaths were 33% of those in yards with inadequate shade.Northern Australia has a hot climate which at times predisposes feedlot cattle to heat stress. It is well known, although not well documented, that Australian feedlot cattle die from heat stress during occasional heat waves. Exposure of feedlot cattle to severe heat stress, especially where cattle die, is no longer tolerated by a discerning public and should no longer be an option for feedlot managers. Preliminary evidence suggests that the more heat tolerant Bos indicus derived breeds have an important role to play in Australian feedlots. However, current specifications for some markets state that British breeds rather than Bos indicus derived breeds should be finished in feedlots for product to be accepted by the market. If the scientific evidence suggests that British breeds have superior feedlot performance and superior carcase quality for the export market, compared to Bos indicus breeds, then the use of these breeds is justified by industry. The industry must, however, consider the welfare of these heat susceptible breeds in the hot Australian climate. A review of the literature showed that no research had been conducted on the effect of heat stress and the benefits of artificial shade to feedlot cattle in Australia. A preliminary study in a southern Queensland feedlot showed that shade reduced rectal temperature in Hereford steers from 40°C to 39°C, indicating potential for shade as a means of reducing heat loads, and improving the welfare of feedlot cattle. Work in an Australian commercial feedlot showed that cost effective shade structures could be incorporated into feedlots for about $25 per beast capacity; the equivalent of $1 per beast finished in the feedlot. Practical experience and radiation studies suggested that shade should be a high density, knitted, shade cloth (to exclude 85% of incoming solar radiation), at least 3.75 m above the ground, with a north south orientation, and supply at least 2.5 m2 of shade per beast. There is, however, little scientific evidence in Australia to support these suggested design specifications. In a number of experiments, medium density, knitted shade cloth caused a reduction (P 0.05) were found in a commercial feedlot when shade was supplied to Charolais Shorthorn cross or Santa Gertrudis Hereford cross steers. Findings from this commercial feedlot experiment indicated that shade was effective in eliminating deaths from heat stress during a severe heat wave and that an investigation was required to further document the extent of deaths from heat stress in Australia's commercial feedlots. Shade provided no benefits (P>0.05) to Zebu cross steers in a central Queensland research station experimental feedlot in terms of liveweight gain, feed conversion efficiency, blood cortisol, carcase quality and meat quality. The shaded Zebu cross steers had a higher (P 0.05) significant. There was no difference (P>0.05) between shaded and unshaded Hereford steers in carcase quality or meat quality, and there was no evidence of heat related pre-slaughter stress. In the Hereford experiment, shade significantly (P<0.05) reduced rectal temperature of steers. Statistically significant (P<0.05) relationships (with high R2 values) were found between some weather measurements and rectal temperature of shaded and unshaded Hereford steers, which provides an opportunity for predicting rectal temperature of shaded and unshaded Hereford steers from these weather measurements. Mean rectal temperature of unshaded Hereford steers regularly exceeded 40°C which is above published acceptable levels, whereas rectal temperatures of shaded Hereford steers at no stage exceeded 40°C. In the Hereford experiment, shade significantly (P <0.05) reduced the respiration rate of steers. Statistically significant (P<0.05) relationships (with high R2 values) were found between some weather measurements and respiration rate of shaded and unshaded Hereford steers, which provides an opportunity for predicting respiration rate of shaded and unshaded Hereford steers from these weather measurements. Unshaded Hereford steers drank more water than shaded Hereford steers although further replicated experiments are required to confirm this finding. High levels of open mouth breathing and aberrant behaviour were evident in unshaded Hereford steers and shade was effective in eliminating these behaviours. It is generally recognised that severely abnormal behaviour is inconsistent with optimal performance, health and well being and is unlikely to be accepted by the general community. Hereford steers used the shade at a higher rate than Zebu cross steers (91% vs 65%) in a similar experiment. Shaded Hereford steers were more likely to be recumbent than unshaded Hereford steers in an experimental feedlot and it has been suggested that failure to lie down is an early sign of heat stress. Different results were found in commercial feedlots where there was more competition for shade (see below). Early development work with automatic weather stations in commercial feedlots indicated their reliability left a lot to be desired. However, it was demonstrated that, while they were functioning, they would collect a wide range of daily and hourly weather data to assist feedlot staff in understanding weather patterns and to manage heat waves. Recent modifications to the design of the machines have occurred to make them more reliable in the feedlot environment. Correlation coefficients (0.88 to 0.89) between automatic weather station data and manually collected data showed that, while the machine was functioning, it was effective and efficient at collecting a range of data. From a large investigation into the behaviour of British breed cattle in commercial feedlots, a significant (P <0.05) difference between shaded and unshaded steers in the percentage of steers at the feed trough during the hot part of the day suggested that more shaded steers were inclined to eat during the heat of the day than unshaded steers. A higher (P<0.05) percentage of steers in unshaded yards (compared with shaded yards) congregated at the water trough, presumably to cool themselves or to satisfy a higher water intake requirement. There was a similar percentage of steers standing (rather than lying) in both treatments. The percentage of steers using the shade (78%) either standing or lying, across all sample feedlots, was surprisingly low and less than the 90% recorded in a previous experimental feedlot with Hereford steers, possibly indicating competition for shade in the commercial feedlots, or observation errors. A significant (P< 0.05) reduction in panting and slobbering was observed in commercial feedlots when shade was provided, which indicates a reduction in respiration rate. This supported the findings with Hereford steers in an experimental feedlot. Estimates of radiant heat load (RHL) in the animal zone in shaded and unshaded feedlots showed a reduction in RHL of 25% as a result of providing a medium, knitted, shade cloth structure. The lower radiant heat loads in the animal environment of shaded feedyards explain why cattle have lower rectal temperatures and respiration rates than in unshaded yards during the hot summer months. In view of a recent finding that medium, knitted, shade cloth transmitted 41% of the incident shortwave radiation, it is important that the effect of a more dense shade cloth on RHL in the animal environment and on animal performance be investigated. In this project it has not been possible to show a statistically significant difference between shaded and unshaded treatments in animal productivity. With further research, it may well be possible to demonstrate differences in productivity in some genotypes in some years. In the meantime the null hypothesis remains - that is, that there is no difference between shaded and unshaded feedlots in animal productivity. Some large commercial feedlots privately admit to heat stress deaths of up to 50 head of British breed cattle during heat waves. This information has not yet been documented. Cost-benefit analyses of feedlot shade are vitally important, but the difficult task is in the assumptions used and estimates of the costs and benefits in the analyses. Until research can demonstrate that shade clearly shows an unequivocal production benefit and that until deaths from heat stress are documented, it can not be said that shade will pay for itself. In a cost benefit analysis of shade in feedlots, some account needs to be taken of the consequence of poor (in the eyes of the public) animal care. The cost of perceptions of poor animal care and unacceptable animal welfare are reflected in reduced red meat consumption and additional costly regulation. The major conclusion from this project is that shade reduces heat load and improves the welfare of British breed feedlot steers and that steers with more than 50% Bos indicus content are unlikely to require or respond to the provision of shade. While market specifications rather than environmental adaptation dictate the genotypes finished in Australian feedlots, British breeds are likely to continue to be preferred, and shade will improve the welfare of these animals.