Australian beef production in a global market- How do we compare?

Transcription

1 Australian beef production in a global market- How do we compare? Lloyd Davies, Agricultural Economist Agribusiness Today 2012 Profitable Beef in a Challenging Future

2 Outline of talk What agri-benchmark does Show a sample of the comparative results for 2011 My view of strengths and weaknesses of the Australian beef industry 2

3 What agri benchmark does? Global network of agricultural economists comparing beef production systems Independent and not for profit Initiated in Germany 12 to 15 years ago Use standardised methods to compare farms Australia in crop, beef and sheep networks. AU beef involvement over the last 5 years MLA + International support 3

4 Methodology used Farms chosen to represent common systems Use of a group approach or actual farm Actual farm data is typified Analysis of cow/calf and finishing separated Cost allocation to enterprises where possible Main comparisons are: US$/100kg LW produced cow/calf US$/100kg CW sold for finishing 4

5 Advantages of the network Valid comparisons can be made A large range of countries to compare Better understanding of other countries Compare relative strengths and weaknesses Large range of comparative graphs Continual software enhancements Recognition by others eg. IMS and FAO International contacts developed 5

6 Numbers of countries involved 67 beef finishing farms in 25 of the countries 47 cow-calf farms in 20 countries 14 sheep farms in 7 countries 6

7 Location of Beef Farms in Network Source : Deblitz

8 Preliminary results for Cow/Calf 2011 Overseas farms chosen Farm Region Breed FR-80 Limousin Limousin UK-100 Yorkshire EU crosses CA-800 Saskatchewan Unknown US-240 New Mexico British x EU AR-700 Cañuelas Angus BR-400 Mato Grosso Nelore 8

9 Australian Cow Calf farms Farm Region Breed AU-200 Southern Tablelands NSW British AU-500 NW Slopes NSW Angus AU-1000 Nth Qld Brahman 9

10 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Total Returns $US 000 US$ Other Beef finishing Cow calf

11 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU Whole farm returns and costs US$ ' Total Cost (P&L) Market returns

12 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Land Use in Hectares ha Pasture 8000 Hay or silage from grass Other hay or silage 4000 Other feed / grains 0 12

13 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Weaner prices US$/kg LW US$/kg LW Male Female Av. male & female 13

14 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Cull cow prices US$/kg LW US$/kg LW Cull cows

15 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Total Returns to the Cow Calf Enterprise US$/ 100 kg LW Sold Culls Weaners Subsidy Sold to breeders 15

16 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Other subsidies not related to production US$/farm Acreage payments Less favoured areas 16

17 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Comparative costs US$/100kg LW Total capital cost Total land cost 400 Total labour cost Non-factor costs

18 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Costs vs Returns US$/100kg LW Long term Cash + Depn Cash Returns

19 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Labour rates US$/hr Wages paid Calculated wages for family labour 19

20 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Labour productivity kg LW/hr kglw/hr

21 FR-80 UK-100 CA-800 SK US-500 AR-700 BR-400 AU-200 AU-500 AU-1000 Labour cost per kg of live weight produced US$/100kgLW Family labour Paid labour 21

22 Finishing Relative country results follow similar to cow calf. Comparisons on CW not LW Animal purchase is included as a cost on all farms. 22

23 Prices received for best line in 2011 US$/kg CW Example farm from: Price US$/kg CW Australia $3.50 France $4.90 Czech republic $4.33 Russian Federation $500 Canada $3.86 US $4.00 Argentina $3.80 Brazil $3.10 China $6.50 Indonesia $5.50 Tunisia $7.14 South Africa $

24 Exchange rate of 1 AUD to 3 other currencies 2008 to date 1 AUD buys: BRL USD EUR Appreciation of AUD 0 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 28/8/12 24

25 Weaknesses Generally South America is a lower cost producer Distance from high priced markets Mining Boom Recent appreciation of AUD High labour costs Skills attracted away from agriculture Ageing farmer population Distances to high priced markets Beef an expensive protein to produce Beef a luxury product and impact of GFC 25

26 Strengths Freedom from many diseases (Clean green image) High labour productivity Good QA systems established eg. NLIS World shortage of protein More wealthy people likely to seek premium beef No winter housing requirements Lower population pressures (environment) Scale of operation Education levels 26

27 Thank you 27