Farm Table says:
This report from MLA presents global agri benchmark network results for 2015. Agri benchmark is a global network and the cattle and sheep network has over 30 member countries.
The farm-level results in this report are drawn from the collection of ‘typical farm’ data in each country. In Australia data is collected for eight typical beef farms in Queensland, the Northern Territory, NSW and Victoria:
- Northern tablelands NSW; Angus + sheep + wool; pasture feed base
- Southern tablelands NSW; British breed; pasture feed base
- Western districts Vic.; Angus; pasture, hay, oaten grain feed base
- Central Qld; Bos Indicus; pasture, mineral supplements feed base
- South east Qld; Simmental X Droughtmaster; cattle + crops; pasture feed base
- Northern Territory, Bos indicus; live export; pasture, mineral supplements feed base
- Northern slopes NSW; Charolais X Angus; pasture, hay,sorghum feed base
- Central Qld, Bos indicus; cattle + crops; pasture, oats grazing feed base
The report firstly looks at global price and cost trends, beef price forecast, world beef supply, consumption and trade, then looks at the results in terms of whole farm productivity and enterprise performance indicators.
Whole farm profitability
- Few countries can boast long-term profitability on cattle enterprises at present, even though beef prices rose to record highs during the 2013-2014 period
- While cow-calf enterprises have generally been profitable in most countries, beef cattle finishing has not been a profitable business
over recent years due to the high cost of weaners and feed.
- Only some beef farms in Australia, Argentina, Uruguay, China, Kazakhstan, Ukraine and Indonesia made a profit, without government
payments, in 2015.
Pasture-based beef farm profitability
- In 2014, with much of the north Australian cattle herd being affected by drought (depressing cattle prices for all producers), the ‘typical’ Australian beef cattle pasture-based farms monitored by agri benchmark (all of which have both cow-calf and finishing operations) were mostly profitable in the short-term, with around half profitable or breakeven in the medium-term, but all unprofitable in the long-term.
- This situation changed significantly in 2015, which generally occurred due to a concurrent reduction in the costs of production (effects of drought reducing) and an increase in beef prices (but still not up to global levels).
- In 2015, all of the Australian systems achieved a short-term profit margin.
Efficiency of Australian producers
- Northern Australian cow-calf systems have relatively low stocking rates, on a par with similar range lands of Montana and Kansas (US), Alberta (Canada), and semi-Kalahari bosveld (South Africa). However, southern Australia’s higher rainfall systems maintain high stocking rates and land productivity, similar to the European and the more intensive South American systems.
- The majority of the world’s cow-calf systems tend to maintain similar reproductive rates at around or above 90 calves per 100 cows. However, north Australian systems maintain reproductive rates similar to comparable extensive cattle systems in South America (Brazil, Colombia, Paraguay, Uruguay) and Africa, which range from 50 to 80 calves per 100 cows. Southern Australian systems tend to perform comparably to European, North American and more intensive South American (Argentina, Uruguay) systems.
- Beef production per cow ranges from 100-480 kgs globally (kg live weight (lwt) produced per cow per year) – weaners are the main part for most systems, with culled adults being the second most important contributor. The performance of Australian systems is in the middle and is quite diverse, ranging from 210kg to 340kg lwt.
- In 2015, Australia had comparably low total returns from cow-calf operations, due to a combination of significantly lower weaner and cow prices and moderate production levels (weaning rates and production per cow) Labour costs in Australia are amongst the highest in the world, but have declined since 2013 in US dollar terms. Australia’s average wages paid for employed staff in 2015 is around USD19/hr, with the opportunity cost of family labour around USD21/hr.