The competitiveness of Australian beef production in a global market

Transcription

1 The competitiveness of Australian beef production in a global market Dr Karl Behrendt Senior Lecturer in Agribusiness School of Agricultural & Wine Science Charles Sturt University

2 Overview What we do? International competitiveness of Australian beef production Some global challenges

3 agri benchmark understanding agriculture worldwide

4 Countries in the agri benchmark network 2014 Countries Farms Cow calf Beef finishing Sheep % of worlds beef 60% of worlds sheep Participating countries 2014 Contacts for further growth

5 Why global farm-level benchmarking? identify and understand driving forces for future trends in global agriculture; analyse the impact of changing economic, technological and political framework conditions on farming operations, farm structures and agricultural production; and provide relevant information for all clients who want to strengthen their position in a global agricultural economy. Understanding agriculture worldwide Know where you are Learn why you are where you are Identify opportunities

6 Australian farm competitiveness Typical farm results (2013 year)

7 Beef cattle distribution & Typical farms AU360/1550 China 2054

8 Australian beef cattle density AU360/1550 China 2054

9 Australian Beef Cattle herd size (head/business) AU360/1550 China 2054

10 AT-35 AT-120 DE-260 DE-280 DE-800 FR-60 FR-70 FR-200 IT-910 IT-2660T UK-45 UK-80 UK-90 UK-750 RU-640 CA-28K US-7200 US-75K AR-380 AR-630 AR-800 AR-26K UY-75 BR-60 BR-360 BR-400 BR-680 BR-800 BR-1750 CN-70 CN-300 CN-940 CN-2000 CN-150 ID-2 ID-4 ID-100 AU-65 AU-85 AU-150 AU-320 AU-360 AU-375 AU-415 AU-540 AU-15K NZ-375 ZA-3000 ZA-75K Beef finishing generally not profitable in the mid-long-term (2013) US$ per 100 kg Carcass weight sold Opportunity cost Depreciation Cash cost Beef returns Beef price + Beef by-products Beef price + by-products + government payments

11 AT-25C AT-30 DE-100 DE-300 DE-1100 DE-1400 FR-80B FR-80 FR-85 UK-70 UK-100 UK-105 RU-450 CA-200A CA-200B CA-800B CA-800A US-160A US-160B US-500 AR-800 AR-850 AR-1100 UY-220 UY-115 BR-1200 BR-2500 CN-2 CN-140 ID-2 ID-3 ID-4 AU-180 AU-200 AU-350 AU-560 AU-600 AU-880 AU-990 AU-1550 ZA-200 ZA-250 ZA-350 ZA-400 Cow/calf systems are low cost & profitable in the mid-term (2013) US$ per 100 kg Live weight sold Opportunity cost Depreciation Cash cost Weaner and transfer to beef receipts Weaner + transfer to beef + cull animals + breeding Weaner + transfer to beef + cull animals + breeding + government payments

12 Costs of meat production (US$/100kg Cwt) 1200 > 600 UK-80 DE-800 UK BR-60 DE-285 AR-800 AR-380 US-7200 AU-375 US-75K UY-75 BR-800 AR-630 BR-360 BR-400 ID-4 AU-15K BR-1750 AR-26K BR-680 AU-360 NZ-375 ZA-3000 ZA-75K BR-60 DE-285 AR-800 AR-380 US-7200 AU-375 US-75K UY-75 BR-800 AR-630 BR-360 BR-400 ID-4 AU-15K BR-1750 AR-26K BR-680 AU-360 NZ-375 ZA-3000 ZA-75K < 400 Total Costs UK-80 DE-800 UK-45 CN-940 CN-940 FR-70 AT-35 AU-415 CN-2000 CN-2000 AT-120 FR-60 ID-2 UK-750 IT-910 IT-2660T CN-70 CN-150 AU-320 DE-260 AU-65 AT-175T FR-200 DE-280 AU-85 AU-150 RU-640 ID-100 UK-90 CA-28K DE-525T AU-540 CN-300 CN-300 AT-120 FR-60 ID-2 UK-750 IT-910 IT-2660T CN-70 CN-150 AU-320 DE-260 AU-65 AT-175T FR-200 DE-280 AU-85 AU-150 RU-640 ID-100 UK-90 CA-28K DE-525T AU-540 FR-70 AT-35 AU-415 Cash Costs

13 Cost developments in beef production USD per 100 kg carcass weight and increase in percent 700 South Africa Australia Austria Spain Germany UK Italy France 110 % 130 % USA 150 % Argentina Poland Argentina Brazil China 290 % 0 '05 '07 '09 '11 '13 '05 '07 '09 '11 '13

14 AT-25F / AT-30 Short, medium and long term net profit margins for cow/calf/finishing farms DE-800 / DE-1400 FR-60 / FR-80B FR-70 / FR-80 ES-520 / ES-150 UK-45 / UK-70 UK-80 / UK-100 SE-100 / SE-95 PL-20 / PL-45 CZ-100 / CZ-420 UA-5600 / UA-295 UA-275 / UA-410 AR-630 / AR-800 AR-380 / AR-850 AR-800 / AR-1100 UY-75 / UY-220 BR-400 / BR-1200 BR-2500 / BR-2500 CO-350 / CO-220 CO-130 / CO-400 CN-2 / CN-2 CN-70 / CN-140 ID-1 / ID-2 ID-2 / ID-4 KZ-800 / KZ-500 AU-65 / AU-180 AU-85 / AU-200 AU-150 / AU-350 AU-415 / AU-560 AU-540 / AU-600 AU-320 / AU-880 AU-375 / AU-990 AU-360 / AU-1550 Short-term (Cash) Medium-term (Cash - Depreciation) Long-term (Cash - Deprec. - Opp. Costs) Long-term (excluding gov. payments) 100% 80% 60% Europe Americas Asia 40% 20% 0% -20% -40% -60% -80% -100%

15 ES-430 Short, medium and long term net profit margins for feedlots ES-520 ES-5500 ES-520 / ES-150 CA-28K US-7200 US-75K MX-1500 AR-26K AR-630 / AR-800 BR-680 PE-1700 CN-940 CN-2000 AU-15K ZA-3000 ZA-75K NA-25K 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% Short-term (Cash) Medium-term (Cash - Depreciation) Long-term (Cash - Deprec. - Opp. Costs) Long-term (excluding gov. payments) Europe Americas Asia Africa

16 AT-25C AT-30 DE-100 DE-300 DE-1100 DE-1400 FR-80B FR-80 FR-85 UK-70 UK-100 UK-105 RU-450 CA-200A CA-200B CA-800B CA-800A US-160A US-160B US-500 AR-800 AR-850 AR-1100 UY-220 UY-115 BR-1200 BR-2500 CN-2 CN-140 ID-2 ID-3 ID-4 AU-180 AU-200 AU-350 AU-560 AU-600 AU-880 AU-990 AU-1550 ZA-200 ZA-250 ZA-350 ZA-400 Weaned calves per 100 cows

17 Australia s farm performance and global Beef competitiveness Drought (while raising turnoff) lowered cattle, lamb and sheep prices and raised production costs (especially for feed and agistment). More to come in Beef finishing profits struggling (2 of 6 barely covered cash costs, 4 made a cash (short-term) loss). Feedlot made short and long-term profits. On a whole-farm basis though much better (5 of 6 with short term profit, only 2 cover opportunity costs and make long term profit) Finishing, Cow/calf & crops Still a very competitive low cost producer of beef - South American and NZ

18 Kees de Roest: Impact of CAP reform Italy beef farms decoupled payments per head sold

19 CAP reforms Italy beef farms profit/loss per head sold

20 Intensive Italian beef farms will be hard hit by a per ha payment system, while extensive farmers on poorer land gain

21 Universita Degli Studi Scienze Gastronomiche

22 Universita Degli Studi Scienze Gastronomiche SLOW FOOD Eat less meat (630grams/week) a quarter what we eat in Oz Meat causes cancer, heart disease, diabetes, depression, arthritis etc Replace it with plant substitutes such as legumes and oil seeds Buy higher quality meat and pay more Choose alternate cuts and meats or organs Eat meat slaughtered in your country, ideally local of native breed, from small-scale farmers Cheap prices mean animal and environmental exploitation Buy fatty meat as it is a sign of animal wellbeing

23 Thank you Dr Karl Behrendt School of Agricultural & Wine Science