How are Australian BEEF producers performing globally?
12 January 2017
According to the latest agri benchmark results, the results were varied somewhat across the globe, but the Australian highlights include:
- Australia remains an efficient beef producer, with a moderate to low cost of production
- While cow-calf enterprises were generally profitable in 2015, cattle finishing was not, although it had improved from 2014 levels
- Typical Australian beef farms achieved the highest levels of profitability since 2006 and were mostly profitable on both a short- and medium-term basis in 2015, but only two of the eight systems being monitored were profitable in the long-term – given Australia’s relatively high opportunity costs of land and labour
- Australia has moderate to low calf weaning rates and cow herd productivity, compared with similar systems
- Australia achieves moderate-to-high weight gains in southern farming systems, but low gains in extensive northern systems
- In 2015, Australian cattle prices rose appreciably, partly catching up on earlier global price rises, following the impact of the prolonged 2012-2014 drought (cattle oversupply) and a high A$.
Other findings include:
- Global beef prices were generally on the decline into 2015 in USD terms, but rose in local currency terms, which highlights the effect of a rising USD
- Few countries can boast long-term profitability in beef production at present, though higher beef prices improved results for Australian farms in 2015, whereas globally, profitability fell marginally for most countries
- This, together with continued climate volatility (especially drought) and growing resource and environmental constraints, suggests that global beef supply response will be moderate, and are unlikely to lead to a major beef price over-correction (as earlier global cattle production and price cycles have).
For the full the full beef report, click here.
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