A senate committee has called for an extensive review of tax arrangements to ensure foreign entities investing in Australian agriculture pay appropriate levels of tax and do not receive an unfair advantage over Australian investors.

The Senate Rural and Regional Affairs and Transport References Committee has been looking into the Foreign Investment Review Board (FIRB) national interest test since July last year.

Committee chairman Senator Bill Heffernan says the inquiry is grappling with “one of the most significant contemporary issues in Australia's agricultural industry” - that is, how to properly manage and encourage foreign investment for the industry's and the nation's benefit.

He notes the debate is balanced between the significant infrastructure, wealth and job creating benefits brought by foreign investments versus the increasing community concerns that certain recent trends in foreign investment are not necessarily in Australia’s national foreign interest.

In particular concerns heard by the committee have surrounded what is seen as an increasing trend of foreign governments seeking to invest in Australia for food security purposes, and the inadequacies of existing legislation to deal with this emerging trend.

The committee has also heard evidence that tax incentives or loopholes were benefiting foreign investors over Australian investors in the agriculture industry.

In an interim report released today, the committee makes recommendations in relation to two issues - relevant tax arrangements and the out-dated legislative framework surrounding foreign investment in Australian agriculture.

The committee notes that it will address many other issues relating to foreign investment in its final report due in February next year. These include the regulatory framework surrounding foreign investment in Australia, the global context of food security, information gaps regarding foreign investment, the scrutiny and transparency of FIRB in applying the national interest test and the foreign investment review threshold.

After hearing evidence on tax arrangements senators noted that it was “reasonable to conclude” that a sovereign entity investing directly in Australia and exporting for non-commercial purposes, such as for humanitarian reasons, could avoid paying tax in Australia.

The committee has released six recommendations designed to close taxation and legislative loopholes surrounding foreign investment in Australia.

To view the full interim report and more detail on each recommendation click here

Recommendation 1
The committee recommends that in order to prevent tax revenue leakage and market distortions, the government undertake an extensive review of the tax arrangements applying to foreign investments and acquisitions in the agricultural sector.

Recommendation 2
The committee recommends that as part of the broader review outlined in Recommendation 1, the government should review Australia's tax laws that apply to tax exemptions for not-for-profit activities for foreign entities. The review should examine ways to prevent tax revenue leakage when foreign government entities undertake agricultural production in Australia for humanitarian purposes or for food security.

Recommendation 3
The committee recommends that the government require that any non-commercial production from agricultural land and businesses by foreign government entities (including for the purposes of food security) is undertaken within relevant Australian Government foreign aid programs.

Recommendation 4
The committee recommends that as part of the broader review outlined in Recommendation 1, the government should investigate ways of developing more rigorous tax liability arrangements for both government-owned and private foreign entities, particularly in relation to capital gains and passive income. In this regard, further efforts should be considered to limit the scope for foreign investors to use business structures, and other possible loopholes, not available to domestic competitors in order to reduce their tax burden.

Recommendation 5
2.46 The committee recommends that as part of the broader review outlined in Recommendation 1, the Government review the tax barriers for Australian organisations that limit Australian investment in long-term development projects in Australian agriculture. The review should explicitly compare tax arrangements for domestic entities to those faced by potential foreign investors in Australian agriculture. The review should also consider possible reforms of tax regulation to improve incentives for Australian capital investment in agriculture.

Recommendation 6
3.8 The committee recommends that the government undertake a review of the Foreign Acquisitions and Takeovers Act 1975 with the aim of developing proposed amendments that address contemporary issues of foreign investment, particularly in agriculture.
3.9 The review should specifically consider:

• the definition of 'rural land' and 'urban land';
• drawing a distinction between the treatment of rural land and agricultural business; and
• any limitations that the Foreign Acquisitions and Takeovers Act 1975 may place, either explicitly or implicitly, on the Foreign Investment Review Board's ability to effectively review the level and nature of foreign investment activities in Australia.

Stephanie Coombes has been named the 2013 NAB Agribusiness Rising Beef Industry Champion, announced last night at the annual industry awards event held in Canberra.

Sasha Lanyon from South Australia was awarded the NAB Encouragement Award and Steven Pocock from Queensland won a leadership scholarship to Marcus Oldham College, sponsored by the Australian Beef Industry Foundation.

“The quality of all eight candidates was outstanding,” said Cattle Council of Australia president Andrew Ogilvie.

"It made the task of choosing one winner very difficult.

"They all exhibited excellent communication skills combined with a mature knowledge of the industry and the challenges that lie ahead.”

Stephanie, 23, is the president of the WA Farmers Federation Young Farmers council and sits on the WA Farmers Federation Meat Council.

A passionate advocate for the agricultural industry, Stephanie has a strong presence in social media and has developed her own personal brand in 2012 to identify herself within the wider community and activity engage in discussions with consumers.

Read Steph Coombes earlier article on Beef Central: Why I work on the boats that take our animals overseas 

She is an accredited stockman in the live export industry and her blog series the “Live Export Diaries” provides first hand photos and videos about the industry and has received a great response from consumers.

Future goals include working in the live export industry implementing education and training programs in destination markets, ensuring industry remains actively engaged with both the Australian and global community, and supporting and developing the next generation of people entering agricultural industry.

This award is made possible through Cattle Council’s partners including NAB Agribusiness and the State Farming Organisations.

Glenn Cox, Regional Agribusiness Manager for NAB agribusiness said the importance of investing in the future of agriculture through initiatives such as the 2013 NAB Agribusiness Rising Beef Industry Champion award cannot be underrated.

“We see the investment back into the industry as fundamental in supporting the next Generation of Australian Farmers," he said.

“NAB Agribusiness is proud to have been a major partner of the Cattle Council Australia Rising Champions initiative since its inception in 2010.

"We are delighted to continue our association with the CCA and specifically the sponsorship of the Rising Beef Industry Champion Award.”

Higher grain costs and a softening in exit price have impacted negatively on Beef Central’s latest 100-day grainfed trading budget, calculated today.  

The latest fortnightly breakeven has projected a loss of $38 a head, $20 worse than a fortnight ago, for flatback steers entering the feedlot yesterday and closing-out on March 13 next year after 105 days on feed.

The result represents a gradual deterioration compared with a positive $5 trade four weeks ago and +$21 projected profit back in mid-October.

For yesterday’s trading budget, the prescribed flatback feeder steer buy price ex Darling Downs has drifted south again, easing 5c to 185c/kg.

There are bids evident in the market for feeders matching our description from 180c through 190c at the moment, and possibly above that for large runs of suitable cattle.

Current feeder steer prices for all descriptions remain delicately poised, however, and much will depend on weather patterns in the run through to Christmas.

Comparing EYCI with QCMI

It’s worthwhile pausing for a moment to compare today’s steer price (185c) with the current downward pressure being seen on the Eastern Young Cattle Indicator, which this week fell to two-year lows around 331c/kg.

The Queensland Cattle Market Index figure, in contrast, has held up much better in value. While the QCMI (built more around slaughter-based and heavier cattle) could not be described as robust at present, it still sits around 181c.

Since July, the QCMI has gone from 199c to 182c (an 8.5pc decline), whereas the EYCI over the same period has gone from to 390c to 331c (15.2pc decline).

That reflects the point that the QCMI is based on a summer-rainfall dominant market, while the EYCI is relatively more influenced by winter/spring rainfall. While Queensland has been partly affected by the absence of good spring rain, the impact was much more evident and more serious in NSW, and that is clearly reflected in the EYCI’s recent performance.

The result has also been seen in the big flow of cattle into southern Queensland feedlots over the past eight weeks.     

Yesterday’s breakeven steer value of 185c/kg prices him at $831, back $23 on two weeks ago, and $135 less than what he was worth back in January – the high-point for the year for feeder price of $967.

Ration price for this week’s trading budget have been adjusted upwards $5/tonne to $290/t.

That reflects the lack of downwards on grain price during this year’s harvest, unlike what traditionally happens at this time of year. The absence of that normal seasonal dip this year is probably driven by continued high international grain prices.

Secondly, the fact that Downs feedlots are now pretty full, and close to capacity in some examples has probably meant feedgrain buyers have had to be more bullish in their buying strategies, which has probably assisted in holding the market up.  

An ‘expectation’ of a decline in grain prices was starting to be seen in softening feedlot ration prices going back into September/October, but when this year’s harvest started to come off, when some of the old-season cheaper grain was exhausted, with rations starting to be priced 100pc on new grain, market-to-market, there was a resulting lift in ration price.

While Beef Central has applied a $290/t ration price in its latest calculation, ration prices above $300/t are currently not uncommon in some Downs feedlots. Due to the higher occupancy rates now being enjoyed, some feedlots may be again expanding their margin/mark-up on their ration charge, having taken a hit on margin earlier when occupancies were lower.     

The current ration price represents a total feeding cost over 105 days of $454 on our trading steer, up $8 from a fortnight ago. Total production cost is calculated at $1378, back $16 on mid-November’s feeding budget figure, due to lower feeder price more than offsetting higher ration price.

Cost of gain, using our chosen variables (2kg/day ADG, for 210kg gain over 105 days) has gone up a little to 216c/kg yesterday, +3c/kg, in line with higher ration price. This time last year, the cost-of-gain was 187c/kg on a 250/t ration price, about $40 or 16pc different from today’s figure.

Feeders back a year ago were worth 210c/kg, however.

All the above variables deliver a breakeven yesterday of 391c/kg dressed weight on a 100-day feeding exercise, down from 395c/kg a fortnight ago, due mostly to lower cattle price.

Current public grid prices from Southeast Queensland processors for March, week two, are around 380c/kg, down 10c on two weeks ago, representing a trading loss on the current proposition of minus-$38.

That shift in forward contract price reflects the current rise in numbers of cattle currently on feed, and coincides with a reduction in processing capacity in that period early next year, with one large grainfed processor in southern Queensland likely to be on annual maintenance closure.

Spot market position

Forward contracts on cattle exiting the feedlot today, and forward-bought in mid-August were around 385-390c. Breakeven on those cattle was around 400c, suggesting processors/traders are technically losing about $30/head on those cattle. However that result may have in fact edged a little into the black on some cattle, based on the recent better feedlot performance during spring.

• Beef Central's regular 100-day grainfed breakeven scenario is based on a representative standard set of production variables, ex Darling Downs. They include a 356kg dressed weight; ADG of 2kg; consumption 15kg and a NFE ratio of 7.5:1 (as fed); $25 freight; typical implant program. Bank interest is included. It is important to note that variations exist across production models (feed conversion, daily gain, mortality, morbidity, carcase specification); from feedlot to feedlot; and between mobs of cattle. For a more specific performance forecast on a given mob of cattle, consult with your preferred custom feeder.

Census backs Rocky’s beef capital status

The Fitzroy Natural Resource Management (NRM) region of Queensland maintained the mantle of the largest cattle region in Australia, according to Meat & Livestock Australia. Drawing on results from the Australian Bureau of Statistics’ 2011 national census, the Fitzroy region surrounding Rockhampton had 2.7 million cattle as at June 30, 2011, the most cattle of any NRM region in Australia. The Northern Territory, which is classified as a single NRM region, was the next largest with 2.1 million head, followed by another four Queensland NRM regions: Desert Channels (1.7 million head), Southern Gulf (1.59 million head), Burdekin (1.43 million head) and Border Rivers and Maranoa Balonne (1.2 million head). Across the other states, the largest cattle region for WA was the massive Rangelands (1.06 million head), which covers around 90% of WA. In NSW, the largest cattle numbers were in the Northern Rivers (941,324 head), while Glenelg Hopkins (928,242 head – south west Victoria) region was the largest in Victoria. For the Australian sheep flock, the Lachlan region of central NSW surrounding Forbes was the largest with 6.16 million head, followed by the Glenelg Hopkins (5.49 million head) region of Victoria, the NSW Central West (5.12 million head), Murrumbidgee (4.78 million head – centred on Wagga Wagga) and the South West of WA (4.3 million head).To view map showing the distribution of cattle by NRM region in Australia click here

US net farm income forecast to decline in 2012

Net farm income in the United States in 2012 is forecast to decline by almost $4 billion from its all-time high in 2011, according to the USDA’s 2012 farm income forecast released this week. Net cash income is expected to decline almost $2 billion. While the projected overall value of US agricultural production is expected to increase in 2012, the gains will be more than offset by increases in purchased inputs and payments to stakeholders. In particular, feed expenses are forecast to increase almost $10 billion in 2012. Farm equity is projected to achieve a new record high in 2012 as expected growth in farm assets exceeds the expected increase in farm debt. Debt repayment capacity utilization (DRCU)--a measure of farm exposure to financial risk--is forecast to tick upward while remaining at a near-historic low level. For further information click here

Independent Expert Scientific Committee to CSG and Coal announced

Federal environment minister Tony Burke has announced the membership of the new Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development. The group will review coal seam gas proposals and large coal mining developments and their potential impact on water resources when referred by the Commonwealth and state regulators. "The work of this committee will give communities reason to be confident that future decisions about coal seam gas and large coal mining development are informed by the best possible science,” Mr Burke said. "The committee will advise me on research priorities that address critical gaps in scientific understanding of the actual and potential water related impacts associated with coal seam gas and large coal mining activities, and scope what research is needed to reduce these knowledge gaps." The members of the group are: Ms Lisa Corbyn (Chair);  Professor Craig Simmons;  Emeritus Professor Angela Arthington; Ms Jane Coram; Dr Andrew Johnson; Mr Jim McDonald; Professor Dayanthi Nugegoda; and Emeritus Professor Peter Flood . For further information and biographical profiles on each member click here

New APVMA advisory board 

The Department of Agriculture, Fisheries and Forestry has welcomed a new advisory board for the Australian Pesticides and Veterinary Medicines Authority (APVMA). The new board will support the APVMA, which is responsible for the assessment, registration and ongoing quality of agricultural and veterinary chemical products. The advisory board will provide expert advice and recommendations to the APVMA’s chief executive officer relating to the performance of a function or the exercise of a power.  DAFF First Assistant Secretary, Agricultural Productivity Division, Matt Koval said the board is made up of individuals that meet seven specific areas of expertise, together with an additional member who provides complementary expertise. The Department acknowledged outgoing chair Mr Mark Allison, and members Mr Wayne Cornish, Mr Claude Gauchat, Ms Jenni Mack, Professor Michael Moore and Dr Simon Robinson for their service to the authority. APVMA advisory board appointees are:

• Associate Professor Dr Lyn Fragar AO, Chair (NSW) - Public health and occupational health and safety
• Mr Roger Toffolon (NSW) and Dr Sandra Baxendell PSM (QLD) - Regulation, under State or Territory law, of chemical products (two members)
• Mr Selwyn Snell (NSW) - Agricultural chemical industry
• Dr Lisa Wade (NSW) - Veterinary chemical industry
• Mr John Hassell (WA) - Primary production
• Dr Gordon Reidy (NSW) - Environmental toxicology, including knowledge of the effect of chemical in ecosystems
• Mr David Lawson (QLD) - Protecting consumer interests
• Ms Bronwyn Capanna (NSW) - Optional additional member with experience in a field relevant to the APVMA’s functions

Ludwig launches new climate change strategy

Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig has launched a revised Climate Change Research Strategy for Primary Industries (CCRSPI) which he says will help build a sustainable, strong and viable future for Australia’s primary industries. Minister Ludwig said the strategy is designed to identify and help to mitigate the impacts of climate change through a wide range of research, development and extension. It supports a number of existing programs and policies including the $429 million Carbon Farming Futures Program, which helps farmers reduce on-farm emissions and enhance productivity. Mr Ludwig said up to $50 million in competitive grants are available under the latest round of the Filling the Research Gap Program, while a $64 million Extension and Outreach Program was helping primary producers make sense of carbon farming opportunities, and participate in the Carbon Farming Initiative. More information is available on the CCRSPI website www.ccrspi.org.au.

Help on way for Indian couch grass invasion

Queensland’s Department of Agriculture, Fisheries and Forestry is bringing pasture management experts Stuart Buck and Brian Johnson to the Burdekin district to help local graziers battle an Indian couch invasion. Indian couch is outcompeting improved pasture species in some areas, predominantly Buffel grass, and has the ability to adversely affect productivity. DAFF FutureBeef extension officer Lauren Williams said it was a symptom of pasture rundown and the two workshops will detail the causes and symptoms of rundown and management practices to bring back desirable species and improve pastures. The workshops will give graziers an in-paddock view of degraded pasture, and then some practical solutions. The free "Improve Pasture Management and Give Couch the Boot" workshops will be held on December 4 at Alpha Golf Club, Alpha and on December 5 at Lancewood Station, Nebo-Mt Coolon Road. Both workshops will run from 8am to lunchtime.  To register for the workshops, or for more information, contact Lauren Williams on 49 67 07 32 or email Lauren.Williams@daff.qld.gov.au

The achievement of Angus bulls in topping national herd bull price statistics this year for the first time represents the culmination of a decade-long program to elevate the breed into a position of greater market strength.

Where only five or six years ago, Angus bulls were statistically among the cheapest on the market among the six or seven most popular breed options used in the Australian beef industry, they are now amongst the most expensive.

See Tuesday's Beef Central article outlining the improved performance seen in Angus herd bulls, relative to other breeds, which saw the breed set a $5627 average for 6306 bulls sold at auction this year.  

Demand, from both northern and southern Australia, has obviously been a big driver of that result. But talking to breed society personnel, independent breeding consultants and others, there appears to be a whole raft of other reasons in play.

Just one of those, perhaps more to do with international rather than domestic trends, is the growing popularity of ‘brand Angus’ in the marketplace.

The USDA has suggested there are more than 60 commercial beef brands in the US that carry the word, ‘Angus’, in their name. Best known, of course, is the enormously successful Certified Angus Beef program, but there are dozens of other success stories.

Despite Australia being much less reliant on grainfeeding as a finishing option than US production systems, and a grading system which is far less oriented towards the presence of marbling as a quality determinant, Australia continues to follow the US mantra of ‘Black is Beautiful.’

Brand-driven price signals in some cases have pushed this. Teys Australia’s MSA grid continues to offer 5c extra for black cattle for its Teys Black Angus program, for example, and other large processors offer similar programs.

Some large processors do not offer a specific Angus premium on slaughter cattle, but point out that within MSA, British cattle tend to grade to a lower boning group giving a better percentage grading. Many lotfeeders offer 5c/kg premium on Angus feeder cattle over other Taurus options.

While some would argue that the financial reward to the producer for selling Angus-specific trimmings for use in McDonalds and Hungry Jack’s burger patties is negligible, the ‘premiumisation’ of burgers through such heavily-promoted marketing programs has continued to provide a strong psychological rallying-point for some commercial beef producers.

Looking at the Angus bull sale statistics generated since 2007, it is evident that the breed has logged steady, but significant improvement. In the raw auction sales data published below, produced by Angus Australia for sales over the past six years, a number of trends are evident:

• The steady improvement in average price
• A large decline in the number of individual Angus bull sales held (down 50 percent)
• The consequent decline in the overall number of bulls sold at auction (down 16pc on the record 2006 year, when 7544 bulls were sold)
• While less statistically significant in indicating overall breed trends, there nevertheless has been a steady increase in the top price achieved for Angus bulls year-to-year. The figure has  more than doubling since 2007 to the new breed record price of $110,000 set at the KO Angus sale near Kangaloon in NSW in August.

Some might argue that the apparent lift in demand for Angus bulls, reflected in the average price achieved, has been driven by the big reduction in numbers of bulls offered at auction.

That argument can be partly countered, however, by the evidence that more Angus bulls than ever are now being sold out of the paddock, rather than through the auction ring.      

Angus Australia chief executive Peter Parnell cautions over interpretation of the figures presented in the above table.  

“We have not seen too many Angus seedstock herds close their doors in the past five years, in fact we’ve had an increase in membership. So it’s hard to imagine that the number of sales held, and the number of bulls sold, have declined as much as the figures suggest,” Dr Parnell said.

“We think the figures are more of a reflection of our inability to capture and record all sale results. Angus Australia can only record statistics where the vendor has advised us of the results. While we do a fair bit of chasing up, we don’t get 100 percent. But we’re in the process now of re-analysing the results and sales held, to see if we can find some outliers,” Dr Parnell said.

He conceded, however, that reporting adjustments would not account for all of the movement seen in the table.

“There is certainly some rationalisation going on in terms of number of bull sales held. But that does not mean those people are out of the business altogether – they may have simply discontinued their own on-property sale and now sell through other channels – either privately, or joining other auction vendors.”

Dr Parnell said the fixed cost of running a single vendor sale meant that a critical number of animals was necessary to spread the cost further – probably a minimum of 50 or 60 bulls was required these days – meaning many smaller stud sales offering 30-40 bulls were no longer financially viable.

Equally, with the growth in demand for Angus out of northern Australia (i.e. Queensland), there was greater demand for paddock sales of larger lines of young bulls.

“When we do our ‘back of the envelope’ sums on the numbers of Angus bulls that must be sold each year to meet the market demand, it must be a lot more than the 6000-odd represented in auction statistics. We estimate it is probably at least double that,” Dr Parnell said.

As an illustration, Angus Australia now registers 60,000 calves each year, including 30,000 bulls.

“I don’t believe that out of those 30,000 Angus bull calves registered each year that only 6000 are sold as bulls. In our estimation, there would be at least 12,000 to 15,000 new Angus breeding bulls changing hands each year. Seedstock producers simply would not stay in business culling 30,000 bull calves back to 6000,” he said. “There’s a lot of bulls being sold outside the auction ring.”

Part of that paddock sale trend involved yearling and younger bulls, Dr Parnell said.

“Sale-prepared bulls are typically older, because of the feeding time required, so it’s reasonable to assume that statistically, paddock sales involve a greater proportion of young bulls,” he said.

Young bulls making big money

One of the outstanding features of the 2012 auction season for Angus was the ability of very young bulls to make big money through the auction ring.

At the Millah Murrah bull sale, for example, an $8612 average was achieved for a total clearance of 85 bulls. Only 17 entries in the catalogue were two-year-olds, with 42 aged around 18 months and 26 sold as yearlings around 12 months of age.  

Dr Parnell said part of the explanation behind the strong performance of yearling bulls was the emphasis being placed on performance recording.

“Those breeders are really pushing the envelope in terms of genetic improvement, and are able to command big prices for their yearling bulls because of their superior performance figures, and buyers are getting access to that performance a year earlier than they otherwise would,” he said.

Asked whether Angus had benefited this year from the northern live export crisis, through commercial cattlemen in Queensland seeking to broaden their marketing options through the use of Angus bulls over Indicus breeding herds, Dr Parnell said the evidence was ‘fairly anecdotal’ but one good indicator could be seen in sale price trends, south to north.

“There’s a strong trend evident that the further north you go, the better the prices paid for (Angus) bulls,” he said.

“With a few exceptions among high-profile southern studs, going from Victoria up into northern NSW, the average bull price and clearance rates increase.”

For the majority of southern Angus breeders in Victoria, their price average was substantially lower than those in NSW, and particularly northern NSW.

“Anecdotally, talking to our breeders in northern NSW and southern Queensland, that’s due to extremely strong demand this year out of larger commercial herds in Queensland,” Dr Parnell said.

“Traditionally, Queenslanders are also just willing to pay more money for bulls. That may be linked to enterprise scale, being professional beef producers rather than mixed farmers, enterprise profitability, or other reasons.”

Does Breedplan data matter in a Qld market?

So does the growing demand for bulls out of northern Australia dilute the significance of Breedplan performance recording placed on Angus cattle, given its relatively poor uptake in Queensland?

“It’s a good question,” Dr Parnell said.

“The only information we have comes from some survey work we did with bull buyers. When we asked a specific question about the value placed on Breedplan data, the response was yes, they preferred to see the information if it was available, particularly as the Angus breed is known for performance data collection.”

“I suspect the expectation among northern bull buyers is a little different for Angus than it is for some other breeds. When a northern producer buys an Angus bull, they expect to see Breedplan data, regardless of how much emphasis they, personally, put on the EBVs, whereas if they go to the sale of another breed, it is not as prominent.”

Dr Parnell said there was no evidence that Central Queensland bullock producers were placing less emphasis on marbling performance than fellow breeders further south, who might be breeding feeder cattle for feedlot placement.

“When looking at what the appealing attributes for a northern bull buyer are, certainly one of the traits they are looking for is improved MSA grading. So marbling potential is still up there as an important trait, even in the north.”

Dr Parnell agreed with Beef Central’s assessment that Angus no longer necessarily represented a compromise in frame score for northern breeders wanting to maintain frame in their cattle.

“Those breeders that are producing the larger-framed Angus cattle are being sought after by the northern buyers, perhaps more than others,” he said.

“Their main competitors are the Euro breeds in terms of growth and frame, and there are Angus cattle today that can match them in terms of frame, growth and muscling.”

MSA growth drives northern buyers

With two million steers and heifers graded annually now under Meat Standards Australia, some of the recent Angus momentum, particularly in northern Australia, was due to interest in accessing MSA programs, or improving compliance.

“In southern Australia, the main driver is perhaps still the premiums paid by lotfeeders supplying grainfed beef for higher value export markets for Japan and Korea. But in the north, more producers are getting the message that there are premiums about for cattle that will grade better for MSA. And one way of achieving greater compliance is infusing some Bos Taurus genetics into the herd, and particularly Angus.”

Dr Parnell suspected that even when Queensland and northern Australia started to experience ordinary seasons again, the longer-term desire to produce more cattle with the ability to grade better would underpin demand for Angus bulls, and provide more market flexibility into the future.     

Nor would trends in lotfeeding - where fewer cattle are now longfed 250 days or more because of higher grain costs and consumer demand for less costly meat due to the financial climate - affect Angus prospects.

“If anything, shorter days on feed should enhance interest in Angus cattle, where heavy selection pressure has been placed on marbling performance. It means lotfeeders are now aiming to achieve similar marbling performance at a younger age, and fewer days on feed.

“The premium still exists for marbled meat in the marketplace, but lotfeeders want to reduce their costs by feeding less, and turning off quicker. Specialist longfed feedlots like Rangers Valley used to feed Angus for +300 days, but are now back around 250-270 days, and getting similar performance,” Dr Parnell said.

“That places even more pressure on the genetic ability of the cattle being fed to marble.”

In a remarkable piece of detective work, a team of ‘retired’ CSIRO scientists have revealed the group of artists responsible for the iconic scribbles found on smooth-barked Eucalyptus trees in southeastern Australia.

Previously thought to be the work of a single species called the Australian Scribbly Gum Moth, the scientists have uncovered at least eleven new species of moths responsible for the iconic bush graffiti.

‘Although many Australians will be familiar with the distinctive scribbles on gum trees, very little was known until now about the artists that create them,’ said Dr Marianne Horak, a retired moth expert working in an honorary capacity at CSIRO’s Australian National Insect Collection.

‘Discovering that there are at least twelve species of moths behind the scribbles was certainly an exciting find. We also found these moths have a link with the ancient supercontinent Gondwana.’

The scientists revealed that the relationship between the scribbly gum moths and their eucalypt hosts is a unique ecological interaction. The moths bore a tunnel through an under layer of the eucalypt bark in their larval stage, looping and moving back and forth along their tracks at different stages of their caterpillar life cycle to create the distinctive scribbles.

‘In an attempt to replace the missing tissue, the trees refill the tunnels with highly nutritious, thin-walled cells,’ said Dr Horak.

‘This is ideal food for the caterpillars, so they turn around and eat their way back along the way they’ve come, growing rapidly to maturity, before they leave the tree to spin a cocoon and turn into a moth. Not long after the caterpillars leave the tree, the bark cracks off, revealing the scribbles below.’

The formidable collaboration of scientific heavy-hitters Marianne Horak, Ted Edwards AM and 96 year old Max Day AO teamed up with botanist Celia Barlow—all Honorary Fellows at the CSIRO—in conducting detailed field and laboratory studies to determine the biology and life cycle of the moths. Other collaborators performed DNA analysis and microscopic studies to help confirm their findings and pinpoint these enigmatic moth species’ place within the Insect world.

‘This is a wonderful example of the passion our scientists have for their work, whether retired or not,’ said Dr Joanne Daly, CSIRO Strategic Advisor working with CSIRO’s collections.

‘This research highlights that we still have so much to learn about Australian fauna and flora, even those species we see every day.’

The ‘retired’ research team embarked on the project after a schoolgirl made an interesting discovery while looking at the varying characteristics of the eucalypt scribbles with the help of one of the scientists. She found there were different and unique ‘dialects’ present in different scribbles, indicating that a range of species might be at work.

‘The work of these bush scribblers has an important place in Australian culture and literary tradition, having inspired literary greats such as poet Judith Wright and May Gibbs, who wrote Snugglepot and Cuddlepie,’ said Dr Horak.

The research was published today in the journal Invertebrate Systematics and was supported by the CSIRO and the Queensland University of Technology.

Expectations that Indonesia will reduce beef and cattle import quotas in 2013 have been confirmed following an official announcement from Jakarta on Friday afternoon.

The Indonesian Government has announced it will trim overall import quota volumes by 5000t on this year's levels to 80,000t in 2013.

However, exporters will be able to recommence exports to the market much sooner than expected, with the release of first semester import permits to be brought forward to mid-December, instead of in the new new year which is usually the case.

The Indonesian Government has informed agricultural minister Joe Ludwig today that it will issue 80,000t of import quota for beef and cattle in 2013, which will be divided between 238,000 head of cattle and 32,000t of boxed beef.

That compares to the 85,000t offered last year, which was divided between 283,000 head and 34,000t of boxed beef.

That volume was increased when an additional 7000t of in-semester boxed beef quota was allocated in the second half of 2012.

“Indonesia has announced it will begin issuing import permits for 2013 for live cattle and boxed beef in mid-December,” Senator Ludwig said on Friday night.

“This means producers and exporters that supply the Indonesian market will have certainty heading into the new year.

“Like in 2012, the beef import quota for 2013 reflects Indonesia’s move to self sufficiency.

“The initial quota has been announced at 80,000t, but the need for supply to meet a growing demand means these quotas vary.

“Last year’s initial quota was exceeded, with an extra 7,000t of boxed beef allocated.

“Australia has a close trading relationship with Indonesia.

“There is ongoing demand for Australian cattle and beef in Indonesia, especially due to price pressures caused by demand outweighing availability of product.

“Government and industry are working with Indonesia authorities to help meet that growth in demand and ensure a strong trade into the future.”

A Queensland man was sentenced in the Brisbane District Court on Friday to two years and 11 months jail with a non parole period of six months for illegal importation of food from Korea.

A company, which the man was a director of, was also convicted and fined $60,000.

The man and his company pleaded guilty to six offences of illegally importing meat products into Australia in 2010, totalling over 14 tonnes of product.

A biosecurity officer detected illegally imported frozen pork in December 2010 following an audit conducted in Brisbane.

The man and the company were charged with aggravated illegal importation offences under the Quarantine Act 1908 .

This is the second completed prosecution of the national ‘Operation Hayride’ compliance operation, initiated by the Department of Agriculture, Fisheries and Forestry (DAFF) which uncovered widespread and deliberate importation and distribution of prohibited food.

Investigations under Hayride are ongoing and are expected to lead to further prosecutions Australia wide.

First Assistant Secretary of DAFF’s Border Compliance Division, Tim Chapman, said DAFF treated incidents such as this seriously, as illegal imports pose unacceptable risk to Australia’s livestock industries and trade.

“The goods that were illegally imported were a very high risk to Australia as Korea has recently experienced an outbreak of foot and mouth disease,” Mr Chapman said.

“Australia’s enjoys freedom from many harmful pests and diseases that occur in other parts of the world. Our biosecurity system works to manage the risk of extremely harmful diseases such as foot and mouth disease.”

“The sentence illustrates that there is little tolerance for those who intentionally breach these laws and reflects the serious nature of the offence.”

Under the Quarantine Act illegal importation of prohibited goods can result in jail terms of up to 10 years and fines of $66,000 for individuals. In cases of aggravated illegal importation a fine of up to $1.1 million may be imposed on a company.

Anyone who witnesses suspicious behaviour or comes across any goods they believe to have been illegally imported can contact the Biosecurity Redline anonymously on 1800 803 006.

The national food supply chain charity, Foodbank, has received its biggest-ever single donation of livestock since entering a new beef cattle supply network development phase earlier this year.

Live export and shipping company Wellard has this week donated 25 head of cattle to the charity program, the beef from which will end up on the plates of needy and underprivileged people in coming months.

The donated cattle, a mixed mob of cows, bulls, steers and heifers that had fallen out of specification for live export programs for various reasons, were being held at Wellard’s Lansdowne live export depot at Woodstock, near Townsville. They will be shipped next week for slaughter at JBS Australia’s Dinmore plant, as the local Townsville JBS facility is at full capacity.

Beefbank coordinator Andrew Rodgers, a member of the Centenary Rotary Club which has pioneered the Beefbank concept over the past six years, said the generous livestock donation from Wellard would produce equivalent manufacturing meat sufficient to provide meat protein for thousands of meals for the needy in coming months. 

JBS has been a long-term supporter of the Foodbank cause with regular donations of frozen patties supplied by the company’s Food Partners business, and has agreed to slaughter and process the donated cattle free of charge.

JBS Australia director John Berry said the company had had a close association with Foodbank for some time, and supported the latest initiative.

“We are also working with Foodbank representatives like director, David Crombie, to develop a simple and easy method to engage with beef producers who want to donate a beast, or more than one, to the Foodbank cause,” he said.

The Beefbank supply chain model is still in development phase, but ultimately it is hoped it will involve a considerable number of processors and abattoirs, and other supply-chain collaborators across Australia.

Mr Crombie is working towards finalising a more well-structured, flexible and efficient program that hopefully can be implemented in early 2013. Beef Central will keep readers posted.

In the meantime, the initial beef supply chain model pioneered over the past six years under the BeefBank program by the Centenary Rotary Club continues to operate.

Another producer who has recently donated a beast to the cause is Richard Pietsch, from Coolmunda near Inglewood on the Queensland/NSW border.

“We were at the end of our oats cattle turnoff for this year a month or so ago, and had one fellow who had had a bit of a bump on his hip. We’d heard about Beefbank, and rather than get him killed for our own consumption, we thought we’d turn him into a donation,” Mr Pietsch said.

“It was a simple and easy process. He just went on the truck to Warwick, along with some other sale cattle, and straight into the Carey Brothers’ abattoir pen,” he said.

“We wrote out a separate permit, so Carey’s could take him right through to their plant at Yangan for slaughter, but it was very simple and easy.”  

Mr Pietsch agreed that there would be a certain level of appeal to many producers in making a donation to a worthy cause in the form of a beast, rather than cash or other means.

“One of the points that appealed to us was that it takes all the middle men out of the equation. The beast was slaughtered by Carey Brothers for nothing, and transported for nothing. Foodbank gets full value for the meat,” he said.

“Foodbank is not looking for your absolute prime, best animal. As long as it is fit for human consumption they are happy with cows or whatever, because it is all put through the grinder anyway. I found the whole process brilliant, Foodbank got full value out of the animal, and he would have been docked heavily if I had tried to sell him through normal channels,” Mr Pietsch said.

In a further extension of the donation process, the Pietsch’s steer was boned and packaged free of charge, using apprentice butchers in training at Symbio Alliance’s butcher training facility at Eight Mile Plains.

Beefbank coordinator Andrew Rodgers, said the equivalent manufacturing meat from Wellards and the Pietsch family donations would provide meat protein for thousands of needy people in coming months.    

Foodbank Australia is a national organisation established 15 years ago, dedicated to gathering and distributing donated foodstuffs among charities that help the needy. It doesn’t cook or prepare meals itself, but acts as a food collection and distribution ‘hub’ sourcing and supplying raw ingredients to up to 300 registered charities that use the service.

Just one of those charities, the Wesley Mission, plans to feed 450 people on Christmas day in Brisbane, alone.

Readers can learn more about the Foodbank program, and its component Beefbank project in this earlier Beef Central article, “Beef industry's rally-call for the Foodbank cause.”

• Producers wanting to know more about the Foodbank beef project or how to make a donation can contact Andrew Rodgers on 0411 708 419 or email Andrew@beefbank.org

The Federal Government says new legislation introduced to Parliament this week will modernise the Australian Pesticide and Veterinary Medicines Authority and better protect human, animal and environmental health.

The Coalition however is concerned the new legislation surrounding the chemical regulator has ignored stakeholder concerns and will massively increase regulation, the cost of chemical registration and add another layer of red tape.

Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig, said the Government’s Agricultural and Veterinary Chemicals Legislation Amendment Bill 2012, introduced into the House of Representatives by Parliamentary Secretary Sid Sidebottom yesterday, will modernise the APVMA's functions and will make the chemical assessment process more transparent and easier to understand.

“Reforms to existing AgVet Chemical legislation will ensure our regulatory system is more predictable, effective and responsive,” Minister Ludwig said.

“Pesticide use is part and parcel of farming. Improving the way we regulate and assess those chemicals means they can be used in a safer and more effective way.”

Minister Ludwig said decisions on chemicals will be made more transparent and chemical registrations will be checked regularly.

For the first time, the Bill will introduce mandatory re-registration for agricultural chemicals such as pesticides and veterinary medicines registered in Australia.

“Our reforms are about modernising the system for industry and making sure farmers, the community and other land holders have the best possible AgVet chemicals available to them,” he said.

“At the same time, reforms will provide greater certainty to the community that pesticides and veterinary medicines used in Australia are safe.”

Minister Ludwig said the reforms will encourage the development of more modern and safer chemicals.

“Environment, community, chemical industry and farming groups, as well as state and territory governments, all made significant contributions to this Bill,” he said.

The government is providing approximately $8.8 million over four years to the APVMA to support implementation of the reforms.

The Bill means that registration applications made after 1 July 2013 will be assessed under the modernised law.

The Bill also extends data protection to ten years for certain applications.

The coalition says the new measures will increase the cost of chemical registration by one third or around $8 million dollars.

“This is despite the minister for finance and deregulation, Penny Wong, listing Agvet chemical reform in the 2012 update on the Australian Government deregulation agenda as a key example that will reduce regulatory compliance costs for businesses and improve their competitiveness,” a spokesperson for shadow minister for agriculture and food security, John Cobb said.

“The reform process was supposed to address two key areas; the cumbersome assessment and registration process to make it more cost efficient for business and to provide industry with timely access to the best and safest crop and animal protectants; and slowness of review of chemicals identified with potential environmental and safety hazards.

“However the new legislation instead focuses on adding another layer of red tape with an automatic 7-15 year review process.”

To view more information about the Agricultural and Veterinary Chemicals Legislation Amendment Bill 2012 click here

Livestock producers are being warned to prepare for extreme heat in coming days.

Southern areas of the country have been sweltering in heatwave-like conditions, with parts of South Australia and Victoria yesterday recording their highest November temperatures in more than 100 years.

While temperatures are tipped to ease in those states in coming days, the mercury is set to exceed 40 degrees in New South Wales today and into the weekend, prompting warnings for landholder to put in place plans for livestock and animals.

"Heatwaves can be fatal for livestock, particularly for at risk animals such as lambs and calves, older animals or animals in poor condition,” New South Wales DPI emergency manager, Simon Oliver, Mr Oliver said.

"Intensive industries such as dairies, feedlots, poultry and pigs need to take particular care in hot weather.

"Other impacted industries include livestock transport, abattoirs and saleyards and animal holding establishments such as zoos, kennels and vet clinics.

"On top of livestock fatalities, heatwaves can cause significant losses of production right across our agricultural industries including horticultural and cropping."

In preparing for extreme heat conditions, DPI offers some common sense advice for farmers and producers:

• Ensure shade is available to protect animals from sun and wind.

• Ensure stock have easy access to cool, clean water, preferably close to shaded areas. Animals can drink up to double the amount of water in hot weather.

• Stock movements should be minimised and animals should only be moved in the cool part of the day.

• Monitor livestock regularly and check for any signs of heat exposure, including sweating, excessive panting and drooling.

"Livestock carriers also need to take special care, including planning out their journeys and knowing how to deal with unexpected delays or breakdowns."

Ouyen in north-western Victoria reached a top of 45.8 degrees yesterday afternoon,  the hottest November day ever in Victoria.

Temperatures in Melbourne last night stayed above 24 degrees, the first time that has happened since 1901.

Meera Vijayan of The Weather Channel said the baking conditions have been caused by northerly winds ahead of low-pressure trough, which has been driving in the heat from a hot pool of air over central Australia.

“Thankfully, those in the region hoping for a cool change will not have too long.

“Southerly winds following in the passage of this system will see Adelaide’s maximum temperatures drop to 31?C tomorrow before dropping even further to highs of just 24?C over the weekend.

"Similarly, Melbourne too will see temperatures fall by 10 degrees to a high of 28?C on Friday before dropping to 26?C on Saturday and 21?C come Sunday."

A roadshow being staged in regional centres across Queensland during early December will explore options open to beef producers for the effective management and prevention of pestivirus, otherwise known as BVDV.

Speaking at the seminars will be Esperance, WA-based vet, Dr Enoch Bergman, known nationally as a vigorous campaigner for more effective and widespread management of the beef industry’s most significant and costly reproductive disease.

The workshops follow a series of similar meetings in NSW in August, and earlier roadshows in Victoria and Tasmania.

The meetings (full itinerary and venues at bottom of page) will be held in association with local large animal vet practises in each location, and are supported by Idexx Laboratories, which provides testing kits for ear-notch BVDV testing and BVDV antibody testing. 

“The purpose of the workshops is to give producers and their veterinarians a good understanding of how BVDV works and the management options that exist for both protecting their enterprises or salvaging the production losses they may already be suffering,” Dr Bergman said.

“There is an enormous amount of conflicting information out there which is frustrating producers, or worse still, creating apathy over the disease. The way that BVDV is transmitted seems to trip people up, but one of the purposes of the workshops is to demystify it,” he said.

The manner in which BVDV is introduced, maintained, and spread between management groups is unique and often confusing.

However it follows a specific set of rules, and the diagnostic tools which Dr Bergman has developed make systematic management a relatively straightforward process for producers.

“Making the whole process cost-effective has been my mission for a number of years and I hope these talks will give the producers and their vets who attend the information they are seeking.”

Dr Bergman was a member of the industry’s BVDV technical working group, supported by Pfizer Animal Health, which pioneered many of the management strategies now being advocated across the beef industry.

During presentations, he will outline the principles contained in his recently completed BVDV management guidelines, designed as a step-through for beef producers to cost-effectively and efficiently manage for BVDV in their herds. 

A full explanation of Dr Bergman’ recommendations for BVDV management in more intensively managed herds can be viewed here.

Understanding BVDV

Australian producers are beginning to appreciate that the Bovine Viral Diarrhoea Virus (BVDV) is indeed one of the most economically significant diseases present across the beef industry.

BVDV is unique in the way it assures its own survival on properties. It is almost exclusively transmitted by carrier animals. These carriers are persistently infected with the virus after having survived foetal infection following exposure via their mother during the first to fourth month of gestation.

These PI animals are responsible for future BVDV infections, should they come in contact with a previously non-immune cow whilst she is pregnant from one to four months, another PI may be born. Less commonly, should a female PI produce a live calf, the calf will invariably be another PI.

Qld pestivirus roadshow itinerary:

• Roma Bowls Club - Monday, 10 December, 6.30pm
• Emerald (Australian Agricultural College Campus) - Tuesday 11 December  7.15pm
• Moranbah Black Nugget Hotel - Wednesday 12 December 11.45am
• Mackay Shamrock Hotel - Wednesday 12 December 6.45pm.

Contact for the meetings is Alison Kelleher:  alison-kelleher@idexx.com   ph 0407 375 002

Construction work has commenced on Australian Agricultural Company’s $85 million meat processing facility at Livingstone, 50km south of Darwin.

The company hopes to begin processing its first cattle on the site by late September/early October next year.

Civil works including earthmoving and pouring of concrete is expected to take 10-12 weeks with facility construction and equipment installation scheduled for completion by the third quarter of 2013.

In announcing the company’s decision to proceed with the project last month, AACo Chairman Donald McGauchie said the board had determined that the fundamentals around a processing plant in the Northern Territory were compelling, and believed it will secure the long term future of Australia's northern pastoral industry.

"AACo is continuing with its outlined objective of raising third-party equity in the project, and is involved in discussions with a number of potential investors who have expressed interest in the project, although would also have access to internal sources of capital should available third party terms prove unattractive.

"AACo welcomes further engagement with both the federal and state government to pursue staff training opportunities and the development of community assets, including port, roads and regional medical facilities, to advance the critical public infrastructure required to secure optimisation and security of this project."

This plant will be built as a Hot Boning facility with flexibility to incorporate chillers for prime cattle processing when required.

The state-of-the-art processing facility has a design capacity of up to 225,000 head per annum.

It is proposed that the plant will process up to around 200,000 cattle per year once production levels are achieved.

The facility will create 260 direct and a further 530 indirect jobs, including substantial new opportunities for indigenous and female workers in the region.

AACo said the project will inject $126 million a year into the local economy, will be efficient from a carbon emissions standpoint, and improve animal welfare outcomes.

The Livingstone site is approximately 600ha in size, of which approximately 14ha will be occupied by the meat processing facility.

The balance of the site will comprise irrigation zones, natural wetlands, ponds and other areas providing facility and amenity to the site.

The additional land purchased will ensure a sufficient buffer zone between the abattoir and adjoining areas.

The savage decline in the Eastern Young Cattle Indicator - now below its five-year average for the first time in more than two years - has attracted comment from Meat & Livestock Australia, seeking to put the trend into some context.

Currently the EYCI sits at 331c/kg, a decline of 17 percent on this time last year (399.75c), and 21pc below its January starting point this year. The market barometer is now at its lowest point in three years (see Beef Central’s home-page EYCI graph here).

MLA’s weekly report this morning says a run of dry months which has eroded restocker confidence, combined with reduced processor demand since October, has produced the EYCI decline throughout spring.

The EYCI commenced September at 374.75¢/kg, after reaching a 2012 peak of 419.25¢/kg in the first week of January. However a review of the performance of the EYCI during the spring months illustrated two clear features for the young cattle markets in the eastern states since 2002, the weekly bulletin said:

• The EYCI traditionally finishes the final week of November lower than the first week of September – averaging a decline of 7pc for 2002 to 2012. Indeed, the decline in the EYCI over this three-month period has occurred for all but two of the past ten years. In 2012, the price decline has been 10pc.

• The two years where the EYCI actually finished higher - late November 2010 (up 3pc) and 2011 (up 2pc) - were the two wettest years on record for eastern Australia.

This fuelled restocker demand for young cattle had prompted producers to retain numbers on farm to rebuild herds, while processors were forced to compete harder for a reduced supply of available cattle.

“Indeed, when looking at the trend over the past ten years and then isolating the EYCI increase registered in 2010 and 2011, it is clear that these years were the exception to the rule,” this morning’s weekly bulletin said.

The traditional decline between the first week of September and final week of November largely reflects seasonal conditions and producer intentions, with the warmer temperatures closer to summer reducing restocker demand and impacting quality.

Additionally, the influence of several failed springs and drought conditions throughout the past decade “had to be acknowledged” as a factor behind the decline, MLA said.

However, excluding the past two years when the EYCI increased, the average decline in the EYCI throughout spring was 9pc. The largest spring decline recorded since 2002 was 88c/kg in 2006 – predominantly due to very dry and unfavourable growing conditions.  

A Top End pastoralist is saving money while protecting natural resources on his cattle station south west of Katherine.

Lakefield Station owners Garry and Michelle Riggs have signed a Territory Conservation Agreement with Territory Natural Resource Management (TNRM) to help protect and manage their land, soil, water, plants and animal in their conservation areas.

Mr Riggs said that after working to reduce the impact of cattle and control the existing water resources on their Sturt Plateau property, he has saved at least $100,000 in one season.

He said that by controlling the water source more efficiently, he can provide water to five paddocks instead of one that would previously have relied on access to the wetlands. As a result he is able to run more cattle on the property.

He has also been able to use a water soluble supplement to grow his cattle rather than a dry supplement, which can be given to cattle through the water supply every six weeks instead of one week. He said this alone had saved him $100,000 in the cost of supplements.

The Riggs fenced off 300 hectares of Flying Fox wetlands on their property last year to reduce the impact of cattle and to protect the water supply for the local wildlife and as a future water source.

They also use three night vision cameras to identify and monitor which animals and wildlife are on their property.

The Riggs are among 10 rural landholders to have signed Territory Conservation Agreements (TCA) with Territory Natural Resource Management (NRM) to help protect and manage their land, soil, water, plants and animals, including landowners in Darwin’s rural area.

Under the TCA, the Riggs were eligible to apply for $48,000 funding to put towards the total cost of $120,000 for the cost of machinery and labour to prepare the area and fence off the Flying Fox wetlands.

Territory NRM is about to sign its 10th Territory Conservation Agreement which is designed to help rural landholders protect areas of high conservation significance on their property.

Since the first TCA was signed in September 2011, more than 1200 hectares of land, including pastoral properties and groups of blocks in Darwin River, are protected under these agreements. Some of the high conservation value sites include wetlands and swamps.

The 10-year agreements are voluntary and worked out between the landholders and

Territory NRM to include:

• site conservation planning,
• grazing and fire management,
• weed eradication,
• soil erosion and stabilisation,
• revegetation, and
• water resources and quality.

The Riggs’ story was one of many that was shared at the Territory NRM Annual Forum in Darwin last Thursday, November 29.

The free forum saw people involved in natural resource management from all over the Northern Territory come together to share their stories, achievements and challenges. The forum topics covered a range of natural resource management issues such as fire management, weed management, feral animal control and protecting sites and species.

The Territory NRM provides expertise, advice and funding through the Australian Government’s Caring for Country funding to help natural resource management projects across the Top End, through the Gulf, Barkly and Katherine regions and Central Australia.

Over the past year it has funded 37 groups including 13 Indigenous land management groups, four pastoral landcare groups, eight pastoralists, four educational institutions, four conservation organisations, three urban land care groups and four local government and industry groups.

Facts and figures on Territory NRM

• Territory Natural Resource Management supported the management of more than 139,430 hectares to reduce the impact of weeds

• 600 individual land holders have developed management plans and implemented gamba grass control on their properties in the NT

• Feral control projects involved 24 land managers covering 94 3000 hectares were set up in 2011-12 targeting seven types of vertebrate pests including donkeys, horses, buffalo, foxes, cats, pigs and rabbits

• Since the first Territory Conservation Agreement was signed in September 2011, more than 1200 hectares of land (including pastoral properties and rural block owners) are protected under these agreements

• The 10th Territory Conservation Agreement is about to be signed by land holders in the Daly River catchment

• Territory Natural Resource Management has continued work with and support four pastoral landcare groups across the Territory with a second round of Local Grants sharing more than $210 000 to undertake natural resource management activities to improve the land on their properties.

Source: Territory NRM

The reshaping of Ridley Corporation continued last week with the announcement of a $150 million deal to sell the company’s Cheetham salt business to an Asian investor, following the $77 million purchase a fortnight earlier of a large Victorian rendering business.

Publicly-listed Ridley Corp says it will concentrate more heavily on its agribusiness core, following the sale of Cheetham Salt to Hong Kong-based CK Life Science.

Ridley chairman John Spark said the sale would help transform Ridley into a focused animal nutrient, ingredient, and feed product supplier.

The deal provided flexibility to pursue further value-adding growth opportunities which would strengthen Ridley's position in the animal nutrition sector, as well as the production of strategically important ingredients in the protein value chain.

Growth in rendering

A fortnight earlier the company made its second large rendering business purchase.

Through its expanding rendering operations, Ridley now claims to be one is one of Australia’s largest processors of animal by-products, supplying a range of rendered products to service Australian and export markets, as well as delivering raw material for the company’s own stockfeed manufacturing operations.

Last month Ridley announced it had purchased BPL, Victoria’s largest rendering business of mammalian and poultry waste products, for $77 million.

The transaction was consistent with the company’s strategy to secure strategic feed ingredients, a statement said.

“The rendering business has a close fit with Ridley’s broader animal feed operations and is consistent with our strategy of securing the supply chain for the key raw materials and ingredients which fulfil an essential role in the provision of nutrition for livestock,” the statement said.

The BPL rendering business has a typical throughput of 240,000 tonnes a year, generating an annual turnover of more than $70 million.

In January last year, Ridley announced it had agreed to acquire Camilleri Stockfeeds, a NSW-based poultry and fish rendering business – the first stage of Ridley’s growth strategy to acquire rendering operations compatible with its core agribusiness activities.

The Camilleri rendering plant, near Maroota, converts raw animal tissue into various protein, fat, and mineral products comprising rich granular-type meals and liquid fats with specific nutritional components that are used in the production of animal and aquaculture stockfeed and pet food. Meals and oils are also traded by the business.

Other recent changes within Ridley’s operations have included:

• The 2011 sale of its 50 percent share in large integrated liquid stockfeed supplement manufacturer Champion Liquid Feeds, to Gardner Smith. 
• The closure in November last year of Ridley AgriProducts’ Brisbane Rumevite block manufacturing plant, consolidating its block production facilities at its expanded Townsville site, following the earlier completion of the purchase of the Townsville-based lick block manufacturer, Livestock Nutrition Technologies.

On its website, Ridley Corporation claims to be Australia’s largest and only national provider of high performance animal nutrition solutions, through its Ridley AgriProducts business.

Ridley AgriProducts produces complete rations, mineral concentrates, nutritional blocks and supplements for the beef, dairy, poultry, pig, sheep, and aquaculture industries.

• Ridley Corp (RIC) shares closed on Friday at $1.09, down 1c.

Meat & Livestock Australia has provided a response to criticisms made last week by the Australian Beef Association over MLA’s recent release of its new producer share of retail dollar assessment.

The new industry benchmark was launched during MLA’s annual general meeting in Perth last month. Managing director Scott Hansen said the annual calculation was designed to help gauge the state of health of the beef industry.

He warned stakeholders, however, that it should not be used in isolation from other indicators (see Beef Central’s original report, “Retail $ share provides new tool to gauge industry health”).

Such a measurement has been called-for for some years by industry lobby group, the Australian Beef Association, as a useful gauge of industry and MLA performance.

In a follow-up report published on Beef Central last Wednesday, the ABA, through an article authored by southern director, David Byard, levelled a number of criticisms over the construct of MLA’s retail expenditure share assessment.

In the article “ABA responds to MLA's launch of retail share calculation”, he suggests that for such a tool to work with any success, it was important that the data used be factual and correct.

Mr Byard suggested MLA’s calculation was not based on appropriate figures. For example he said MLA’s own daily figures suggest that the price of young cattle on last week’s market was a fraction below $3.40/kg - a long way from the figure of $3.90 used in the 2012 retail share calculation.

Referring to this pricing ‘discrepancy’ highlighted by Mr Byard, MLA says the data quoted in the initial article referring to the release of the data was based on 2011-12 fiscal year average price for cattle - not the current market price.

The release by MLA of the fiscal year average of the producer share of the retail dollar was firmly grounded in a methodology used by the US Department of Agriculture, the response said.

MLA agained stressed that given the size, scope, complexity and constantly evolving nature of the Australian cattle and sheep industry, no single measure could provide a complete assessment of the state of the industry when used in isolation.

“The producer share of the retail dollar indicator should only be considered in conjunction with a group of indicators that are published by MLA on behalf of the industry,” it said.

These indicators included production figures, export volumes and value, the A$, beef consumption and domestic expenditure.

The methodology and definitions for MLA’s calculation of the producer share of the retail dollar are outlined below:

The ‘producer share’ indicator calculation:

Producer’s share (PS) = ((farm price per unit of quantity) / (conversion factor representing the number of retail units derived from one unit of farm gate quantity) - (co-product value - if available)/average retail price per unit.

For beef this becomes:

Beef producer’s share = ((cattle price per kg carcase weight) / (0.57 being the average conversion from carcase weight to retail weight)) - (co-product value per kg retail weight)/average retail beef price per kg.

Data sources

• Cattle: Cattle price used is domestic trade steer 180-220 cwt (C3) national weighted average collected by MLA's NLRS.
• Average conversion from carcase weight to retail weight (57pc) sourced from Viascan data.
• By-product value sourced from potential value of a prime steer collected through a survey of Australian domestic and export processors by Kurrajong Meat Technology for MLA.
• Average retail beef price calculated using ABARES base quarterly figures and applying ABS quarterly price changes released with CPI (note: this ABS and ABARES data is not available on a monthly basis).

The National Farmers Federation has welcomed today’s announcement by the Reserve Bank of Australia that interest rates will be cut by a further 25 basis points.

NFF president Jock Laurie said the reduction in interest rates, taking the cash rate to three percent for the first time since April 2009, was welcome news for the agricultural sector at a time when the agricultural boom is sharply in the spotlight.

“What we’ve seen over the last few months is a real focus on the future financial and investment potential of Australian agriculture,” Mr Laurie said.

“And while there is a very positive future outlook for farmers and for agriculture - particularly in light of the Government’s focus on the Asian century - in order to capitalise on the future opportunity, we must ensure farmers are in a stable financial position in the here and now,” he said.

“Today’s interest rate cut to 3pc means farmers will be better placed to meet their financial obligations. It is also good news for farmers as it means less pressure on the Australian dollar, which is currently sitting at US104c after reaching highs of US110c last year.

“We know that every 1pc appreciation in the Australian dollar pushes our farm income down by around $220 million in raw terms, due to our high reliance on export markets. So a weakening Australian dollar and an interest rate cut, combined, spell good news for the sector,” Mr Laurie said.

He said the NFF now awaited the reaction of the banks to this rate cut with interest.

The NFF’s Agribusiness Loan Monitor, which tracks the movements of financial lender’s agribusiness loans against the official interest rate, would show which banks, if any, have followed the RBA’s lead this month.  

The Monitor is compiled each month by leading money market monitor, Canstar, and published by the NFF as a tool for all Australian farmers. The next update will be released in mid- December

“The November Loan Monitor showed that eight banks have made some reduction in their rates since the October RBA rate cut, however of these, only one bank – BankWest Agribusiness – has passed on the full 25 basis points, and then only to their agricultural overdraft customers,” Mr Laurie said.

“We urge all financial lenders to pass the benefit of today’s rate cut on to farmers, to help promote and stimulate future growth in the agricultural sector,” he said.

• The full results of the November NFF Agribusiness Loan Monitor are available via the publications page on the NFF website: www.nff.org.au

A case of three day sickness near Casino in northern New South Wales has prompted the North Coast Livestock Health and Pest Authority (LHPA) to alert producers to monitor their cattle for signs of the disease.

Three day sickness, or bovine ephemeral fever, is a viral disease of cattle that typically causes affected animals to display symptoms for a few days only. It is spread seasonally by biting insects, and traditionally occurs in Queensland and the north-eastern parts of NSW. Many cattle in these regions develop immunity to the disease because they are exposed as young animals.

Matt Ball, Senior District Veterinarian with the North Coast LHPA, said in addition to the positive test the authority has received reports of suspect cases of three day sickness from local producers.

“The spike in reports may be due to changes in weather patterns, which is a key factor in spread of the disease,” Dr Ball said. 

“Three day sickness typically spreads on the North Coast of NSW during December to April so the disease has appeared slightly early this year. There was limited spread of the disease last season so a larger group of animals may be lacking immunity this year.” 

Br Ball said the economic impact of the disease should be considered given its potential to affect fertility in bulls and that severely affected animals may die.

“Therefore, we’re recommending producers inspect mobs, particularly yearling animals, looking for signs of the disease – lameness/stiffness, drooling, lethargy and animals lying down,” he said.

“Depending on the animals affected treatment options vary. As a general rule, provide water, feed and shade to animals that are down. Cows in advanced pregnancy may abort. Heavy animals, such as bulls, older steers or fat cows can be badly affected. 

“If animals stay down for too long nerve and muscle damage may prevent them getting up again. For these cases producers should contact their veterinarian for treatment options. Prescription medicines, such as anti-inflammatories, can be useful for animals that are severely affected or not recovering quickly.”  

Dr Ball said there are vaccines for three day sickness which may be considered for higher value animals such as bulls.

“However, once cases are occurring it’s generally too late to vaccinate for immediate protection, but it may be worth considering for future protection,” he said.

“Other diseases can have similar signs to three day sickness so if producers are unsure they should seek a diagnosis from a veterinarian, especially if animals do not recover quickly.”

More information on bovine ephemeral fever is available at the NSW DPI website by clicking here

There are fears that further cutbacks in live cattle import quotas to Indonesia could be the straw that breaks the camel’s back for some of the many northern cattle operations that depend upon the trade.

Few sectors of Australian agriculture are as heavily reliant upon a single market as the northern live cattle trade is to Indonesia.

The market grew out of mutual complementarity, with Northern Australia able to produce large numbers of tropically-adapted cattle but unable to finish them to viable slaughter weights, and nearby Indonesia lacking the numbers or logistics required to satisfy local beef demand but with an abundance of high-quality and low cost feed available from agricultural by-products to grow cattle.

A world-class feedlot industry developed around the trade in the 1990s and 2000s, with the market taking more than 700,000 cattle in 2009 alone.

However since then the northern cattle industry has experienced tough times, with Indonesia’s renewed political resolve to achieve self-sufficiency in beef production, and increased pressure from animal rights groups leading to a series of high-impact trade disruptions that have dramatically undermined the industry’s viability.

A combination of Indonesia’s July 2010 enforcement of 350kg weight-limits on imported cattle, the Australian Government’s June 2011 suspension of the trade due to animal welfare issues in Indonesian abattoirs, and Indonesia’s decision to halve import quotas in 2012, followed by further cuts for 2013, has hit the viability of Indonesia’s northern cattle industry hard.

Balanced against that is a recognition that northern cattle industry fortunes could turn around just as quickly were Indonesia to suddenly increase import quotas.

Pressure to do that is rising as a beef shortage in the market forces beef prices to double their normal levels.

However, despite that pressure, the Central Government has shown no signs yet of diverting from its tough stance on imports prior to the next presidential elections in 2014.

Many in the northern cattle industry, already feeling the squeeze of rising costs, falling land values and worsening debt-to-equity ratios, are now facing a second consecutive year of severely restricted cashflows as a result of Indonesia’s import cut backs.Industry leaders have expressed concern that it may only be a matter of time before more banks start moving on financially-stressed operations.

“It is all pretty tough and it is probably going to get tougher next year,” Northern Territory Cattlemen’s Association president David Warriner told Beef Central this week.

“The banks are starting to move on a couple of places, so who knows how much further that is going to go.

“If Indonesia came back in 2014 and wanted one million head of cattle then everything is good again in an instant.

“But if they don’t it is just going to get worse and worse.”

Mr Warriner said many producers were re-negotiating bank arrangements and running as lean as they could and not spending money to try to survive what was a very tough time.

“There is no capital expenditure being done, no decent bull purchases being done, you go into this negative spiral and if you stay into it for too long it is pretty hard to get out of it,” he said.

“You deplete you asset base as well as your genetic base and it has a pretty profound hit at the end of the day, and long lasting.”

Mr Warriner said it was disappointing that quotas had been cut by a further 45,000 head, which appeared to be “out of sync” with what demand was doing in Indonesia and the rise of local beef prices to in excess of 100,000 rupiah per kilogram.