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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