SITUATION ANALYSIS All data sourced from ABARES
COSTS TO THE PRODUCER
Farm costs, and the cost of living for farm families, have increased in-line with the national rate of inflation.
Costs have increased 40% since 2001 and about 30% in the decade to 2013.
THE INCOME COST SQUEEZE
In real terms, cattle prices have declined 30% over the decade.
This has led to an income cost squeeze. In the biological world of cattle production, it is impossible for an individual business, let alone an industry, to achieve the annual 3-5% gain in productivity that is needed to maintain positive margins.
Australia is not a cheap place to grow livestock.
The soils can be poor and nutrients may be bought in. There is the tyranny of distance. The rainfall is erratic and droughts are frequent. Australian businesses pay world parity prices for input costs including energy, equipment, and farm chemicals. We must pay first world wages to farm workers, business and community service providers, bureaucrats and politicians.
There is no way Australian cattle can be the “cheapest” in the developed world.
Going forward, we must correct the system that allows the Australian grass fed cattle producer to be excluded from the potential income that his animal generates.
