AUSTRALIA - Higher beef exports are not helping producer margins in Australia, which are down year on year for the 2012-13 season.
Average income declines have been confirmed at 15 per cent lower than the previous season, putting a halt to gains made over 2011-12, an Australian Bureau of Agricultural Resource Economics and Sciences study has concluded.
The report categorises farms by size and region – north and south. A small beef unit in Australia consists of 100-400, medium 400-1600, large 1,600-5,000 and very large >5,400 head.
Greatest cash income falls were seen in larger units whereas medium sized holdings saw income rise by 21 per cent. Specialist beef producers fared better overall, posting average losses of four per cent on the previous year, roughly AUS$ 52,000 per farm.
Losses can be attributed to weak cattle prices as input costs have mounted in the light of ‘poor seasonal conditions’, according to market analysts at Meat and Livestock Australia.
Critical drought conditions inland, east coast flooding and widespread wildfires plagued Australian cattlemen through the first half of the year.
Emergency loans and forage donation schemes have been orchestrated by territory and national government to support struggling businesses.
While farmers struggled to move cattle to grass and buy in feed, slaughterhouses became increasingly busy dealing with rising throughput as farmers resorted to early slaughter, particularly in Queensland.
Average eastern state slaughter numbers rose by 18 per cent year on year for April and May.
The industry then opted to push the resulting beef glut to foreign markets, causing May beef exports records to be smashed after six of waiting.
The previous monthly record, set in November 2006, was beaten by over 8,000 tonnes and crossed the 100,000 tonne threshold for the first ever time.
This was despite a reinvigorated US beef industry targeting the newly available Japanese market, Australia’s biggest beef buyer, following trading approval in the New Year relating to bovine spongiform encephalopathy fears.
Dr Emerson, Minister for Trade and Competitiveness in Australia stressed the attributes of many of Australia’s export destinations as markets of ‘huge opportunity’.
Expanding middle classes in China, South Korea and Japan, are prompting Australian trade officials to increase personnel in developing trade channels into such countries.
However, ABARES statistics show that little benefit from increased trading is filtering down to producer level.
Their producer outlook for the coming year is for ‘increased financial pressure’ on farm businesses as land values fall with incomes.