ACCESS to three of Australia’s most in-demand stallions will be up for grabs at the Australian Campdrafting Association’s national finals at Kilkivan, southeastern Queensland next month, in a bid to raise funds – and smiles – for a leading charity.

Service fees to the outstanding sires Hazelwood Conman, Marnies Destiny and World Class will go under the hammer to boost the coffers of the Sunshine Coast chapter of Riding for the Disabled.

The trio of stallions represents the pinnacle of Australian horse sport bloodlines – between them, they account for virtually every major title on the campdraft and challenge roster.  

Conman dominates the ACA sires standings, campdraft arenas and the sale ring.

The 14-year-old, owned by Terry and Christine Hall at Goondiwindi, has dozens of major wins to his credit, including multiple Warwick stallion and ladies’ drafts, the Chinchilla grandfather clock, the Landmark Classic stallion shootout, and last month’s Longreach stallion draft with a spectacular 94-point run. 

A grandson of the legendary Elliot’s Creek Cadet and Warrenbri Romeo, Conman has twice missed out on the jewel in the crown – the Warwick Gold Cup – by the skinniest of margins.

In 2009, the stallion led going into the final but finished third behind daughter, Concert, while last year’s final hinged on a run-off. 

Conman’s progeny at the 2013 Landmark Classic at Tamworth sold to a top of $40,000, and averaged $20,500 at last year’s sale.

Marnies Destiny has won or placed at nearly every major draft or challenge in the country, with more than 120 ribbons to his credit. 

The 2012 ACA open horse of the year became the only stallion to take the title in two decades, and was also crowned Australian Stock Horse campdraft horse of the year.  Owners Rick and Gay Young bought the Acres Destiny son in 2006, and he stands at their Young Star Stud near Dalby. 

Victories include the Cloncurry Stockman’s Challenge, Chinchilla grandfather clock, the Warwick maiden and stallion drafts, the Condamine restricted open, ASH Series led championship and Springsure working horse spectacular.

Marnies Destiny has been runner-up in Paradise Lagoons opens, the Condamine Bell open, Tamworth futurity, Warwick stallion draft and the Rocky Rush, and his progeny are shining in the campdraft, challenge, polocrosse and led arenas.

World Class, owned and bred by William and Tracey Tapp and standing at Wowan, is by the renowned Freckles Fortyniner and from the outstanding mare Lonesome Dove All Class.

He represents the combination of the superstar genetics the Tapps were privileged to own. Freckles Fortyniner and Lonesome Dove All Class were both quality athletes in their own right, and together they have produced a family of outstanding performers.

A multiple big-event winner, World Class was the ACA and ASHS novice campdraft champion in 2011-12 and is a full brother to star performers Classy 49er, Classy Chex, Classy Kate and Fortyniner All Class. 

The first of his progeny is Classy Dove which won the recent Julia Creek novice with two 90-point runs. 

A multiple big-event winner, World Class was the ACA and ASHS novice campdraft champion in 2011-12 and is a full brother to star performers Classy 49er, Classy Chex, Classy Kate and Fortyniner All Class.  The first of his progeny is Classy Dove which won the recent Julia Creek novice with two 90-point runs.

With Kilkivan set to host Australia’s best horses and riders, the auction is an opportunity to give back to the local branch of Riding for the Disabled, which provides fun and therapy for people with disabilities across the region.  The non-profit organisation is completely dependent upon donations, and the Hall, Young and Tapp families, along with the Kilkivan organising committee, jumped at the opportunity to lend their support.

The auction will be held at the ACA national finals on Friday night, September 6.  While the winning bidders will secure service fees, other costs such as transport and insurance will be their responsibility.  For more information, contact Arthur Winter on 07 4651 6441 or Matt Winter at mattwinter696@hotmail.com

An annual Queensland ‘150 Rich List’ compiled by the Sunday Mail newspaper this weekend has exposed the tough conditions being experienced across the beef industry – even for the sector’s largest stakeholders.

Of the nine beef industry inclusions in this year’s list who have appeared in previous years (allowing comparisons to be made), seven of them recorded a significant depreciation in their asset value over the past 12 months.

Remove the three big miners from the top of the Qld 150 Rich list (Clive Palmer, Chris Wallin and the Fu and Lin family) and the remaining 147 wealthy individuals all increased their net worth this year by an average of $23m, or 10.9 percent.

That contrasts strongly, however, with the nine entries on the list where beef was their primary source of income. Their average net worth this year was $224m, which fell 14pc or $31.3m compared to the 2012 report.

As a result, every single beef producer on the list (with the exception of three new entries, where no comparisons were possible) had a lower ranking this year than in 2012. 

The result clearly reflects the extreme stress the Australian, and particularly northern Australian beef industry has been under in the recent past, in comparison with other forms of business. That’s been driven by:

• The fact that many of the beef producers listed on the Top 150 have assets in more northern parts of Australia where they are more directly exposed to the ongoing live export crisis, starting with the market closure by the Australian Government in July 2011. That’s been compounded more recently by market access restrictions imposed by Indonesia as part of its self-sufficiency drive.
• Widespread severe drought impact this year across western and northwestern Queensland, and the Northern Territory, and
• The subsequent decline in prices for store and slaughter cattle as a result of heavy turnoff, live export-type cattle being moved south, the high value of the A$ and subdued international demand.

Of all the Top 150 businesses listed where beef was identified as the primary income source, just one was given a higher asset value this year than last. That was David and Nell Brook, part of the Organic Beef Exports supply chain out of Queensland’s far western Channel Country. The Brooks’s run 40,000 Certified Organic cattle on 3.49 million ha from their base at Adria Downs, Birdsville.

Apparently on the basis of the 35-40pc premiums evident in the market for organic cattle, the business was allocated a $1m rise in asset value this year by the Sunday Mail’s researchers, to $59m. Others would argue that such a conclusion was ‘generous’, given the drought and the broader Queensland cattle property value trend.

The Brooks’ business still fell in the overall Top 150 rankings, however, sliding from position 139 to 149, on the strength of larger asset value increases among other non-beef related business listings.

The Sunday Mail’s Top 150 list itself has some questionable inclusions and equally obvious omissions, based both on lack of comprehensive knowledge about individuals operating within the beef sector, and also some doubtful inclusions when net worth/borrowings are considered. However it provides a worthwhile snapshot of the state of play at the big end of the production sector, in the biggest beef producing state.

Published below are the beef sector inclusions, sorted by their ranking order:  

24. Acton family. Brothers Graeme (pictured left) and Evan Acton and families run about 150,000 cattle across Central and Northwestern Queensland. While acknowledging that land sales to resources giants for coal development have insulated Acton Land & Cattle Co from the worst of the beef industry downturn, the business’s asset value still fell to $405m this year, down $66m. As a result the Actons fell from 18th position on the list last year year to 24th in 2013.

28. McDonald family, MDH Pty Ltd. The family enterprise, headed by brothers Jim and Don McDonald, sadly lost Don’s son Zander to an industrial accident earlier this year. The McDonalds are the state’s biggest private landholders, controlling 3.36 million ha of land, and about 170,000 cattle. Asset value: $375m, $40m fall on last year. They fall from position 19 to 28.

29. While his Sundown Pastoral Co interests are located across the border in northern NSW, Neil Statham qualified for the list because he lives on the Gold Coast. Sundown Pastoral controls 58,000ha of highly productive country breeding and backgrounding cattle for Woolworths. Cotton interests insulated his beef exposure, but his asset value of $336m is still estimated to have fallen $46m compared to last year.

35. Peter and Jane Hughes and sons run more than 150,000 cattle on 2.24 million ha in Qld and the NT. They have been hit hard by drought on the Barkly this year. Asset value assessed at $298m, down $59m on last year.

52.  The Daniels family at Cloncurry is a new entrant to the list this year, not because their asset value has grown dramatically recently, but because they were previously overlooked. The family runs 80,000 head of cattle on properties in the Gulf and Northwestern Queensland. Asset value estimated at $209m.

62. Pam Deamer. Daughter of the late Brian Oxenford, Pam Deamer, (pictured left), took over the family’s Western Grazing business following his death in 2004. Western Grazing encompasses 165,000 head across eight large grazing properties in northwest Queensland and the NT, producing grassfed cattle. Asset value $185m, down $38m on last year.

71. Camm family. David and Judy Camm and their family operate an integrated supply chain business including 60,000 head of cattle in Central, North and Southern Queensland plus the modern, well developed Wonga Plains feedlot outside Dalby feedlot. The Camms fell from position 58 last year, with asset value of $166m, a decline of $21 million in 12 months, according to the Sunday Mail's rankings.

85.  Like the Daniels family, Alister and Joanne McClymont are new additions to the Top 150 list this year - again not because their net worth has grown dramatically recently, but because they were previously overlooked. They run more than 50,000 head of cattle on seven North Queensland properties under their AJM Pastoral Co banner based at Burleigh Station, north of Richmond. Attributed an asset value of $132m.

94. Charles and Grace Lund. Laglan Pastoral Co sells close to 40,000 cattle each year. Falls from position 81 to 94 this year. The Sunday Mail suggests the business is worth $120m, down $13m on last year.

95. Malcolm McClymont. Brother of Alister McClymont (85), the pair operate independently. Another new addition to the list this year, not because his asset value increased, but because he was previously overlooked for inclusion. Runs 50,000 head of cattle across five North Qld properties, totalling 500,000ha. Given an asset value of $119m.

98. Peter Camm. Another new entry, in this case perhaps ed to recent acquisitions, rather than lack of prior research knowledge by the researchers. Brother of David Camm (71) and son of Joh Bjelke Petersen era mines minister, the late Ron Camm. Sold Labelle Downs and Welltree in the NT for $72m in 2008, before buying several properties around Charters Towers and Hughenden and Sir Graeme McCamley’s Glenprairie Station recently for $28m. Prescribed an asset value of $115m.

137. Blair and Josie Angus (pictured left). Josie is the daughter of David Camm and niece of Peter. Angus Pastoral Co owns 162,000ha of grazing land in Central and North Qld, running about 35,000 cattle and a feedlot. Vertically integrated through to export and domestic wholesale through Signature Beef Company. Out to position 137 this year from 124 in 2012. Asset value $71m.

149. David and Nell Brook. The Brooks’s run 40,000 Certified Organic cattle on 3.49 million ha from their base at Adria Downs, Birdsville. Apparently on the basis of the 35-40pc premiums evident in the market for organic cattle, the business was prescribed a $1m rise in value last year, to $59m. It still fell in rankings, however, from 139 to 149, on the strength of larger asset value increases among other non-beef related listings.             

Others on the Top 150 list with some pastoral assets:

In addition to the above summary we have included below a number  of other individuals whose primary source of wealth has come from sources other than beef, but who still control very large beef interests:

10. Tim & Gina Fairfax. While the Fairfax’s net worth has come primarily from the sale of their stake in Rural Press/Fairfax Media, they also control a network of ten Queensland grazing properties, producing grassfed beef for the EU and other markets. The Sunday Mail put their asset value at $780 million (unchanged from last year).

11. Graham ‘Scroo’ Turner – Flight Centre travel booking founder runs a substantial Wagyu breeding and growing enterprise at Old Hidden Vale, near Peachester.

18. Trevor Lee. While the majority of his asset value revolves around the $1 billion annual turnover Australian Country Choice processing business supplying more than half of Coles’ national requirements, Trevor Lee is also a large beef producer in his own right, controlling 433,000ha owned and 230,000ha leased and managed to supply 150,000 cattle each year for the ACC program. He fell from position 17 to 18 this year, although his asset value was assessed as being up $88m, to $560m. 

39. Jim Gorman. The former miner sold his stake in the Jellinbah mine in 2007 for $270m. Today he is a property investor, including 65,000ha of quality grazing land in Central Qld.

40. Teys family. Teys’s joint venture with US processing giant Cargill is the second largest beef processing business in Australia. The family also has extensive grazing and feedlot interests. It’s position on the list was determined because the wealth is split between many family members, the Sunday Mail said. Curiously it was attributed an asset value of just $282m, down $84m on the previous year, resulting in a fall in ranking from 25 to 40.

43. Sir Mick Curtain. While he has made most of his money via construction/mining services, Curtain Brothers also holds significant cattle production assets in North Queensland.

46. Goondiwindi’s Susan Marchant, daughter of the late Ross Marchant, is primarily an irrigated cotton farmer, but also holds substantial cattle interests.

65. Cairns based George Chapman made most of his money in tourism and property, but still owns large cattle assets in far north Queensland.

115. Former Beef Australia chairman Geoff Murphy’s primary business is in construction, but he holds quality assets in Central Queensland grazing operations.   

121. Paul McDonald. Primary income from sale of the family’s quarrying business, is part way through a large cattle grazing development and aggregation project in the Gympie district of southeast Queensland.

142: Colleen Rasmussen. While the business established by her late husband Bill made most of its income from transport, Mackay car dealerships and other activity, it continues to operate a large grazing enterprise at Praguelands, south of Mackay.

146. Noel and Liz Cook. The state’s largest grain grower has benefitted from a bumper grain crop and high export demand. The Cooks also run a substantial secondary cattle business on their eight farming properties totalling 65,000ha, from their Goondiwindi home base.

Notable absentees this year:

Euan and Kaye Murdoch, who sold their Herron Pharmaceuticals business in 2003 for a reported $123 million, today concentrate on their showcase Beaudesert grazing property and intensive, large scale artificial breeding centre, Nindooinbah. Philanthropic donations and other gifts have reduced their net worth below this year’s minimum for inclusion.

Sir Graham McCamley no longer figures on the list after selling his major pastoral asset, Glenprairie Station, to Peter Camm in June. Last year the McCamley family's assets were worth an estimated $181 million according to the 2012 report, but they do not meet the cut-off for this year's Top 150 list. It took assets worth $58m to make it onto the 2013 list.

After years of declaring that there was no place on mainstream national supermarket shelves for a Wagyu beef product because it was considered a ‘low-turnover, niche item’, market leader Woolworths has dipped a toe in the water.

The company’s new flagship Indooroopilly Shopping Centre store in Brisbane’s inner west is one of ten Woolworths ‘large format’ stores across the nation understood to be carrying a Wagyu trial offer.

Most are in Sydney or Melbourne, with Indooroopilly understood to be the only Queensland store so far. There is no word yet whether further stores will be added.

Supplier is the Australian Agricultural Co’s Darling Downs program, but the product on display appeared to be at the extreme bottom end of the F1-F3 Darling Downs 350-day grainfed range – being no more than marbling score 3-4 at best, in Beef Central’s opinion.

The product is not being retailed in Woolworths’ traditional cling-wrap or MAP-packed self-serve form, but features as sliced portions in the in-store butchery 'purveyor' chilled cabinet, with full service from the Woolies butcher.

Sirloins, the only Wagyu item offered, were portion-cut into large 300-350g steaks and unusually heavily larder-trimmed, down to about 5-7mm. They were competitively priced at $49.99/kg. Conventional MSA beef eye fillets in the next tray were $39.99/kg.

The current pricing followed a two-week 'blitz', including a local letterbox brochure drop, where  Woolworths Indooroopilly feature the Wagyu sirloins at a bargain price of $25/kg - little better than wholesale price. 

Staff in the in-store 'purveyor' butchery said the steaks, which carried only fairly discrete Wagyu identity via tray price tags, were selling well. The samples in the cabinet certainly looked fresh and bright, suggesting they had recently been cut, and that turnover was reasonably solid. 

Increasingly onerous regulations on effective feral pest management are causing much frustration for Australian land owners and managers, and could lead to agricultural and environmental disasters in Australia, a leading critic says.

Complex rules, including 17 Federal and State Acts of Parliament for controlling pest animals like feral pigs, have restricted management controls, resulting in destruction to agricultural land and crops, and the environment in general.

Managing Director of Animal Control Technologies, Professor Linton Staples, says a failure to properly tackle feral pest problems will cost the agricultural sector and the environment dearly.

Regulation was adding to barriers for all stakeholders battling feral animal impacts, ranging from land ownrs and managers to contractors and environmental groups, Prof Staples said.

“In Victoria, for example, a total of 17 State and Federal Acts must be addressed by anyone taking a best-practice approach to removing a feral pig,” he said.

“Feral pigs are increasing rapidly in numbers and distribution, are vectors for human and stock diseases, destroy stock and farm livelihoods, and adversely affect wildlife and the environment. Feral pigs probably now outnumber cattle in Australia, and are increasing their range and their density, especially in favourable seasons,” Prof Staples said.

Similar regulation applied to foxes, wild dogs and rabbits in Victoria, and probably to pests in other states, he said.

“Like many other serious animal pests, pigs do not comply with any of the regulations: they just eat, breed, damage things and spread disease.”

Many land owners and managers now shared a concern that effective feral pest management was now overly constrained by wasteful bureaucracy, Prof Staples said.

“In our view, regulation should be subservient to facilitation. It is now appropriate to redirect resources and skilled time to improve action. If we fail to take a more constructive approach, the strangling nature of over-regulation will alienate the critical resource that is most important – the private and public landholders of Australia,” he said.

Prof Staples said the present approach of over-regulation was having the opposite effect to what was intended, by encouraging illicit use of unregulated alternatives.

Increasingly desperate landowners seeking to get on top of growing feral animal problems could use the wrong approach in order to avoid the paperwork, he warned.

“This process is happening in many areas of agriculture, is an industry-wide issue and is the wrong outcome for all. But the paper trails, reviews and registration delays now add considerably to the cost of new technology. Farmers are unaware of the true costs of doing things properly and resent the cost impost in difficult times.”

Prof Staples said governments needed to be less bureaucratic and more proactive, with a practical and focussed approach to pest management in Australia.

“In a political age, where governments state that they want to see less compliance and government red-tape, the reality has been a move in the wrong direction in the field of pest animal management. The challenge for technology providers is to draft directions for use and labels which encourage correct action, while at the same time complying with all the Acts.

“It would certainly be easier if there were far fewer Acts to be addressed. The enlightened approach is ‘do it this way and it will all be legal’, as distinct from, ‘here are all the illegal things that must be avoided’ or ‘here are a list of penalties for failure’.”

“The education of farmers and graziers must be on what to do, and not on what not to do. We must enable and encourage: not obfuscate,” Prof Staples said.

In an election year, where protection of agricultural businesses and the environment may achieve equal prominence, it would be nice to see both sides of politics take the opportunity to make a real difference in times of increasing threats from pest animals, he said.

“Feral pigs are also now one of the most serious pest issues in many states of the US, and governments there are devoting considerable effort to their management and control, using more than just paperwork to address the problem. We should be following that lead, as we will not solve our pig problem with paperwork.”

“There needs to be a paradigm shift here in Australia, so that a best practice approach is achieved in a pro-active way. Action needs to be encouraged by training, rather than discouraged by regulation,” he said.

Prof Staples said one enlightened approach might be to establish a straightforward and singularly-focussed ‘Pest Animal Control Act’ that over-rode all the other current Acts pertaining to feral animal control.

“We certainly do not think that an open slather approach is the right way to go, but some control and guidance is clearly necessary,” he said.

• For further reading on the issue of feral pest management and increased regulation, click here
• Prof Staples company, Animal Control Technologies (Australia) is a specialist manufacturer of vertebrate pest control solutions. The company has developed a range of target-specific products to assist land managers and the agricultural sector in tackling large-scale vertebrate pest problems.

By any measure outlined at last Friday’s IndOz beef trade investment forum in Brisbane, Indonesia is going to need a lot more cattle and beef in future to keep pace with rapidly growing consumption rates.

The 250 million strong population has one of the world’s fastest growing economies and a swiftly expanding middle class of around 50 million people, many of whom no longer see beef as a once-a-year celebratory dish but a protein source to be enjoyed year-round.

At present Indonesia’s rate of beef consumption per head is very low, and one of the lowest in Asia at just 2kg/person/year.

However, there are strong expectations that will grow, with forecasts ranging from growth to 2.5kg per head by 2020 at the conservative end of the scale to growth to 20kg per head at the more aggressive end. 

While 0.5kg per head may not sound like much, when you’re talking a population of 250 million people, even that slight increase equates to an additional requirement of 12.5 million kilograms, or roughly 70,000 cattle.

But what of the supply required to satisfy that demand, both locally and from neighbouring Australia?

Indonesia’s clearly stated desire is to achieve long-term food security by producing enough local cattle to meet demand.

However, as explained by Indonesia’s vice minister for agriculture at last week’s IndOz forum, that is no small challenge in a country where the national herd is spread across some six million farmers, who effectively own just one to two head of cattle each.

Indeed even Indonesia’s strict self-sufficiency policy recognises that imports will be required for Indonesia to keep satisfying growing demand.

The end-point of its current five-year plan is to supply 90 percent of local consumption from domestic cattle production by 2014, with the remaining 10pc to come from imports.

Imports key to herd growth: Modelling

In fact, not only are imports needed to meet demand, but to grow Indonesia’s herd.

This point was graphically illustrated in the results of sophisticated modeling presented to last week’s forum which showed how different self-sufficiency and per-capita consumption scenarios are likely to affect Indonesian cattle numbers and future import requirements.
The modeling was conducted by the ANZ bank following a meeting earlier this year by its chief Mike Smith and Indonesian president Susilo Bambang Yudyhono.

It effectively underlines the role imports will play if Indonesia is to avoid eating into its own herd as it aims to grow its cattle population and achieve food security.

One key scenario assessed the likely impact of Indonesia’s current policy of supplying 90pc of consumption from local production from 2014 onwards.

Assuming no growth at all in existing per-capita consumption levels of 2kg/hd, and no improvements in domestic cattle productivity, the modeling suggests Indonesia’s cattle herd, currently estimated to include somewhere between 12-14 million cattle, would decline to zero by 2027.

“All things being equal, that is where the Indoneisan beef herd will go if those particular variables were implemented now,” ANZ head of agribusiness research Michael Whitehead told the audience.

Tweaking the model to include conservative increases in per-capita consumption rates to 2.5kg per head by 2020, and to 3.5kg per head by 2030, accelerates the rate of herd decline to zero by 2022.

However, the modeling showed that Indonesia could expect to grow its herd over the same period if it reduced the percentage of consumption to be filled by local production to around 70pc, instead of 90pc.

Under a 70pc self-sufficiency scenario, and with per capita consumption increasing conservatively to 3.5kg per head by 2030,  the Indonesian cattle herd would grow to around 20 million head by 2020 and to 30 million by 2030.

At the same time Indonesia would still require imports of around 467,000 live cattle per year in addition to 74,000t of packaged beef in 2020, and imports of around 690,000 cattle as well as plus packaged beef by 2030.

“It (a 70pc self-sufficiency policy) provides Australia with opportunities to import, Indonesia with a largely self-sustaining domestic cattle herd, consumers with the benefit of choice between domestic and imported product, under trade policy Indonesian protection from trade shocks as well, and the potential for export from Indonesia is also strong,” Mr Whitehead told the forum.

Positive signals needed to increase Aus supply

The impact of Indonesian policies on available supplies of Australian cattle was also a key issue of discussion at the forum.

While northern Australia effectively serves as a massive southern cattle paddock for Indonesia, providing affordable and convenient access to high-quality tropical cattle ideally suited to Indonesian feedlots, Australian speakers explained the importance of positive market signals from Indonesia to keep that source of supply intact.

Indonesian policies in recent years have signaled an impression at Government level that northern Australia is seen as a tap that can be turned on or off as cattle are needed, and supply will always be there.

However consistently negative market signals of late – such as the imposition of 350kg weight limits in 2010, continuous cutbacks in import quotas and unexpected changes in breeder cattle regulations – have all impacted on the viability of northern cattle stations in recent years, hurting the many producers who have invested heavily to change their herds in accordance with Indonesia’s specific needs.

Northern Territory Cattlemen’s Association president David Warriner said the imposition of 350kg weight restrictions alone had rendered the northern cattle system unviable in the long term.

“Most cows in the marginal country need a spell from calving, (every) one in three to four years to survive,” he explained. “Too many cows means too many unproductive cows on hand, and a 300kg turn-off weight average equals too many cows on those places in the marginal areas of northern Australia.”

Recent market signals from Indonesia had also forced exporters to work harder than ever to develop new pathways for northern cattle into alternative and equally fast-growing markets such as Malaysia, Philippines and Vietnam, as well as the potentially massive Chinese feeder and breeder cattle import market.

Meat & Livestock Australia managing director Scott Hansen explained to the high-level Indonesian and Australian audience last Thursday that Australian cattle production was a ‘long-lead-time’ business that requires market certainty to sustain high levels of production. 

“By the very nature of the Australian beef and cattle industry, it requires a long term plan, long term thinking and long term partnerships,” Mr Hansen said. 

“I think we’d all agree in this room investment requires a number of factors, one of which is certainty and one is a reduction in volatility.”

While the 350kg weight limit is impacting on the viability of Australia’s northern cattle producers, it is also limiting the amount of cattle available to Indonesia.

The policy was introduced to ensure imported cattle could still be value-added in Indonesian feedlots, providing a boost to the local economy, rather than importing ready-to-slaughter cattle.

In one of the many meetings that took place in and around last week’s IndOz forum, it is understood that exporters last week asked Indonesian Government ministers to consider restoring import quotas to 500,000 head and to increase weight limits to either a 350kg average or 400kg maximum in order to vastly increase available supply.

Sources described the private meeting as constructive, and said the forum provided a valuable opportunity for both ends of the trade to come together to work on developing stronger and mutually-beneficial long-term partnerships.

A follow-up forum will be held in Jakarta later this year.
 

RELATED ARTICLE: Investors weigh up risks and rewards at Indo forum

Any discussion about supply chain investment involving Australia and its largest live export customer, Indonesia, needed to acknowledge the enormous financial and time investment made by northern beef producers in improving their production systems to better service the market.

That was a key message in an address by Meat and Livestock Australia managing director Scott Hansen delivered during last week’s IndOz Beef Trade forum held in Brisbane, attended by a cross-section of influential senior industry and government stakeholders from both countries.     

Mr Hansen told the forum that it was by using a ‘through chain’ approach that Australia approached its meat and livestock business with Indonesia, in investing in research and market development opportunities.  

While Australia’s beef herd of 28.6 million head was not large on a global scale, it was in export terms that it became a significant player, in a country that had ‘more cattle than people.’

“We’re a dedicated exporter, and the Australian beef supply chain, from producer level through to exporters, has made significant investments in ensuring that they are the perfect partners for a global community requiring safe, traceable and nutritious beef,” he said.

“We’ve had to focus on meeting customer expectations and building relationships with more than 100 countries that Australia exports to around the world. We’ve worked hard to keep Australia free of animal diseases, because we need that market access. We’ve worked hard to introduce world-leading traceability systems to ensure that we’re able to provide the assurances and confidence in our product that the global marketplace requires.”

Mr Hansen showed a slide illustrating how the Australian beef herd had gradually ‘drifted north’ over the past decade, with the herds in Queensland and the Northern Territory now considerably larger than the combined total in the rest of Australia.

Northern industry remodels itself

“A key reason for the growth in Australia’s northern production systems has been an investment feature that I feel has been overlooked so far in the discussions this morning,” he told the forum.

“The investment between the two countries (Australia and Indonesia) is not just about the amount of money that is transacted between the two, but also includes the very considerable investments that have been made in our country - and in Indonesia, also - to build a sustainable supply chain and partnership,” he said.

Australia’s northern cattle production system had spent 20 years and countless dollars and hours ‘reshaping’ itself from what was a crude harvesting of heavy, older bullocks for processing and supply to export markets, to a dedicated supply chain producing younger, better quality and more-adapted animals suited to Indonesian feedlots and ultimately, the Indonesian customer.

“That’s taken a significant investment by the Australian cattle industry – an investment which is dedicated to this relationship with Indonesia, and is perhaps not accurately or adequately reflected in some of the supply chain financial investment figures put forward during this conference,” Mr Hansen said.

“Equally, the investments in Indonesia to accommodate and build supply chains to handle growing numbers of Australian cattle are not fully-reflected in the supply chain investment figures discussed at this meeting.”

Mr Hansen said the decision to change the focus of cattle production systems in this way (such as moving to younger and lighter animals to meet Indonesian feedlot requirements) had a very long lead-time.

“In the time it takes for a cow to conceive and produce a calf on the ground - let alone grow it to slaughter weight - the chicken meat industry can produce three cycles of broilers on the supermarket shelf,” he said.

“By the very nature of the Australian cattle and beef industry, it requires long-term planning, long-term thinking and long-term partnerships,” he said.

This had been a key feature of the relationship between Australia and Indonesia over the years, and had to continue.

He said Australian companies represented at last week’s IndOz beef trade forum had invested heavily to become the best trade partners to customers in more than 110 international markets.

He used graphs to illustrate how Australia’s export beef business had changed over recent years.

“Australia is in the middle of record-breaking monthly and yearly figures for beef exports. But a key feature is the changing nature of who that customer base is. In 2006, 90pc of our export product was going to just three markets – US, Japan and Korea. Today, more than 30pc of Australia’s exports are going to alternate markets to those three. And Southeast Asia is playing a large part in that.”

Similar drivers of demand were working in most of these emerging alternate markets, including China, the Middle East and Indonesia.

Equally with the live export trade, the importance of trade with the dominant market of Indonesia was reflected in graphs, published here, which also clearly illustrate overall market volatility.

“We’d all agree that investment requires a number of factors – just two of which are certainty, and a reduction in volatility,” Mr Hansen said. “Investment decisions are best driven when there are clear trends, where there is data and certainty.”

“When we look at the data on beef consumption trends in Southeast Asia, we see certainty: certainty in demand, which is growing for a number of reasons. More people with more money equals more beef demand, and that is certainly reflected around the world.”

Indonesian food consumption patterns had been changing as the economy evolved, typified by the 50 million middle class Indonesians now looking to increase their beef consumption beyond those ‘once-a-year celebratory dishes’ to more regular consumption. Decreases for carbohydrates like tubers and cereals was being replaced by a more than doubling in demand for beef, eggs and milk.

“These are all indicators of Indonesia’s growing middle class, which some say is growing at an extra seven million per annum,” Mr Hansen said.

“That’s enormous buying capacity, and a trend that can give confidence to investors that there is strong and fundamental demand growth in the region.”

He said economic modelling had suggested that the income growth factor would have twice the impact on beef demand that sheer population growth would. “There’s a clear equation here that provides some certainty over growth in demand for beef products.”

He said a key feature of discussions over the two-day forum was this issue of certainty, and certainty of access into the marketplace.

“One of the key features in this is relationships, which Australia and Indonesia have built over many decades, in some cases. At the end of the day this trade is a partnership, and is viewed very much as a partnership,” he said.

Mr Hansen said MLA had been investing for decades within the Indonesian marketplace, including alignments with many of the companies and municipalities represented at the forum.

“We have been working together to share knowledge on issues like animal husbandry, animal health and welfare, stock handling, feed and nutrition, and food safety. But it has not been a one-way street: Australia has equally benefitted from knowledge gained from Indonesian tropical production systems.”

The two counties had been working together to improve production, breeding rates, lowering mortality rates and improving feed conversion efficiency in feedlots.

“We see this focus on the relationship between the two countries, at a time when there is unprecedented demand growth for beef protein as a core part of the calorie intake for a growing middle class in Indonesia, is the ideal platform for both countries to realise some of their ambitions and goals around a productive and sustainable agricultural base,” he said.

The Coles supermarket group improved its national retail beef market share relative to its largest competitors Woolworths and independent butchers last month.

One possible explanation is Coles’ latest incarnation of its ‘Down, Down’ price discounting campaign launched in July – this time focussing on beef mince, where retail prices on 83CL ‘Three-Star’ mince has been reduced to just $5/kg.

That may be only part of the answer, however, as Coles also lifted its share relative to Woolworths and independents across the entire fresh meat protein category, including beef, chicken, pork, lamb and seafood.

According to the latest monthly survey conducted for by Nielsen Homescan*, Coles’ retail value beef share for the rolling quarter ended July 13 rose by another 0.4 percent since June, to 25.2pc.

It’s Coles best result in at least two years, and continues a long-term trend in increased retail beef value market share for the company.

Largest market player Woolworths record a slight check in its share, declining 0.4pc to 32.4pc of all retail beef sales nationwide, by value.

That should be put into some context, however, as it comes after a seven-month rise in performance, starting back in December when Woolworths’ share was 31.3pc.

The latest result for Coles has narrowed the gap a little between it and Woolworths to 7.2pc, after sliding out to 8.3pc in May.

Again, it was the independent retail butchery segment which lost ground in the latest Nielsen survey, continuing a prolonged eight-month trend.

Butchers accounted for 21.7pc of retail beef value for the rolling quarter ended July 13, down 0.2pc from June, and back almost 3pc since last December.   Butchers lost second place in retail share rankings to Coles in February this year, after a gradual narrowing of the gap between the two for the previous 18 months. Coles has now widened that gap over butchers out to 3.5pc, and it shows no sign of closing any time soon.

Election factor

There is a widely held view that butchers are suffering more than most retailers because of the protracted Federal Election process.

Butchers often say that the lead-up to elections are bad for business, because they instil a sense of uncertainty and unease in consumers’ minds that is reflected in spending patterns. That ‘defensive’ spending attitude may in turn drive more consumers to supermarkets engaged in price discounting.

The theory is that trade often picks up for butchers after elections are decided, as consumers’ sense of uncertainty is eased and they become more optimistic, starting to buy again more on ‘quality’ rather than ‘price.’ It will be interesting to examine any evidence of that in survey data for September, to be released in mid-October.

Outside of the ‘big three’ (Woolworths, Coles, independent butchers), there hasn’t been a lot of change in retail value market share last month.

Independently-operated IGA supermarkets improved marginally to 9.4pc of share, regaining ground lost the previous monthly cycle, and getting back close to the company’s two-year high. The Aldi group continued to make steady progress, lifting to 7.7pc share, continuing a four-month rise since March from 6.9pc.

The ‘other’ supermarkets category was softer for the second consecutive rolling quarter at 3.6pc.  

It should be noted that this Nielsen assessment is based on rolling quarterly figures, not single monthly registrations, because they are regarded by analysts as being a more accurate reflection of longer-term trends. 

Category outlook

The overall fresh meat category (beef, chicken, lamb, pork, seafood) recorded value growth of +2.5pc compared to the same period last year. Nielsen said that was due both to an increase in price (+2.8pc) and shopper frequency (+2.9pc).

Despite beef’s share increasing by 0.8pc from last month, beef’s value share of all meat protein sales remains 1.16pc lower that this same period in 2012.

The value shares for lamb (unchanged) and pork (-0.02pc) have remained stable year-on-year, while chicken’s value share (+1pc) has experienced the strongest growth over this period.

In terms of pricing, there have been strong price increases across most meats over the past rolling quarter compared to last year. Chicken is up 75c/kg and pork +54c/kg. Lamb and beef were the only meats experiencing price drops, decreasing by 50c/kg and 20c/kg respectively.

It’s important to note that the prices reported by Nielsen are measured as the average $/kg value of the items in the surveyed consumer shopping baskets. It does not attempt to represent the overall average value of beef and other proteins being sold in the retail marketplace.

Under these terms, beef recorded an average price of $9.64/kg for the July rolling quarter; chicken $8.04/kg; lamb $10.99/kg; and pork $10.28/kg.

* What is Nielsen Homescan?

• A consumer panel of 10,000 households
• Demographically and geographically representative of all Australian households
• Electronically record their household purchases of all grocery foods (fresh and packaged)

How are panel participants recruited?

• Households are recruited on-line via a random sampling method
• The Homescan panel is stratified by life stage, region and household size
• Households are screened to assess suitability and to ensure they do not work in marketing, market research or FMCG.

Indonesia’s Ministry of State Owned Enterprises has confirmed it is close to making investments in Australian cattle stations in line with Indonesian Government plans to shore-up security of beef supply. 

Wahyu Hidyat, the secretary of Indonesia’s Ministry of State Owned Enterprises, told last week’s IndOz beef and trade forum in Brisbane that state owned fertilizer company PT Pupuk Indonesia has been selected to oversee the purchase of Australian cattle breeding operations.

Mr Hidyat said it was still too early to discuss the likely scale of the planned property acquisitions, but confirmed that due diligence studies have supported the move to invest in Australian properties.

Indonesia's State Owned Enterprises Ministry oversees 141 state-owned enterprises which are tasked with driving economic development and managing supply and consumer prices across a range of commodity and product areas.

The 141 enterprises include some of Indonesia’s largest banking, telecommunications, energy, infrastructure, and agricultural companies, and account for annual revenue of US$159 billion, or 18pc of Indonesia’s total Gross Domestic Product.

Mr Hidyat said food security has become a key area of focus for the ministry, with several SOE’s responsible for maintaining safe levels of food stock for the nation.

For example one State-owned-enterprise, Bulog, is responsible for managing supplies of key staples such as rice and sugar to keep prices at affordable levels for consumers.

Earlier this year, with a widespread shortage of beef in Indonesia forcing consumer prices to record heights, Bulog was instructed to oversee the management of beef supplies in the market as well.

Under that commission, it was given additional permits to import a further 3000t of boxed beef into Indonesia in an attempt to reduce pressure on prices during Ramadan.

(At the time members of the beef trade predicted 3000t would fall a long way short of the volumes needed to meaningfully influence prices, and reports of wet market prices soaring to 120,000 Indonesia Rupiah per kilogram during the post-Ramadan feasting celebrations reinforced that view.)

Direct SOE involvement in Indonesia's cattle and beef supply chain includes a range of Government-owned feedlots, abattoirs, meat distribution lines and retail meat brands.

14 SOE-owned palm oil plantations are also involved in a large-scale cattle fattening program in partnership with partners small farmers. The partnership utilises secondary product such as the palm fronds and pasture within plantations to fatten cattle, and last year turned off 20,000 cattle in total.

Mr Hidyat said the move to buy cattle stations in Australia was a further measure undertaken by the ministry to fulfill Indonesian president Susilo Bambang Yudhoyono’s directives to improve security of beef supply.

Mr Hidyat said due-diligence studies recently completed by PT Pupuk Indonesia confirmed that cattle farming should be conducted in Australia because it was more efficient, and cattle fattening and processing should be conducted in Indonesia, because of the efficiencies afforded by lower labour costs and because of the potential to re-export processed beef from Indonesia to other muslim countries.

Under the planned formation of the ASEAN Economic Community in 2015, the 10 ASEAN member countries are set to enjoy free movement of goods and services between their borders. If and when that happens, Indonesia sees an opportunity to become an exporter of Halal-accredited beef to other muslim countries in the trading zone, including re-exporting Australian beef imported to Indonesia as live cattle and processed in its abattoirs.

“Not only are we thinking to boost the supply gap domestically, being a country that has a good image and relationship with many countries that have significant Muslim populations, we are also eyeing the possibility to expand our markets of Halal-beef abroad,” Mr Hidyat said.

He said cattle grown on Indonesian-owned breeding properties in Australia would be imported to Indonesia for fattening by small and medium farmers, and processed through Government-owned abattoirs and meat distribution facilities.

Indonesian media has recently reported comments from State Enterprises Minister Dahlan Iskan that Indoneisa plans to buy one million hectares of Australian cattle country. However, in response to questions about likely scale of purchases, Mr Hidyat said it was too early to offer a specific figure. 

Asked if cattle imported back to Indonesia from Indonesian-owned breeding properties in Australia were likely to included in annual import quotas, or considered outside quota, Mr Hidyat said that policy would ultimately be determined by Indonesia’s agricultural ministry.

Mr Hidyat said the planned purchase of breeding properties was motivated by ‘the excellent quality and competitive advantage’ of breeding operations in Australia.

“From our humble attempts at entering this sector we have learned that for us breeding is the most challenging part of the equation,” Mr Hidyat explained to last week’s forum.

“Factoring in the high difficulty we face to conduct the breeding in Indonesia, we believe it makes perfect business sense to do this especially because of market potential in Indonesia.”

A lower dollar and strong export demand for Australian red meat into China and the Middle East contributed to a recovery in rural business confidence in the June quarter, according to the latest National Australia Bank (NAB) Agribusiness post-farmgate survey.

NAB Agribusiness general manager, Khan Horne, said there were several reasons for the positive findings:

• Business conditions rebounded 14 points to sit in positive territory at +2.  The improved outlook was supported by the depreciating dollar, down 12 per cent over the quarter, and a cut of 25 basis points to the cash rate in May. (The Reserve Bank of Australia further reduced the cash rate to 2.5 per cent in August).

• Significantly, capital expenditure expectations also reached their strongest point in two years, up 11 points to +31, which may reflect increasing export demand taking up spare capacity in processing facilities, Mr Horne said; 

• The rise in business conditions was driven by broad based increases in the three components that make up the measure: employment, trading and profitability; 

• Trading conditions improved sharply, up 18 points to be back in positive territory at +5. While prices were lower resulting in poorer margins, larger trading volumes boosted the cash flows of businesses; 

• Profitability saw similarly solid gains, up 15 points, though still in negative territory at -3; 

• The employment index jumped 10 points to +5 with more respondents reporting an increase in hiring during the quarter than those who were reducing staff numbers; 

• Business confidence was marginally lower in the quarter, down 2 points to -11; 

• In contrast, confidence in animal proteins surged in the June quarter, with sheep meat recording the largest increase of 11 points to +21. This was followed closely by beef with an increase of 10 points to +10.

• Strong demand for Australian lamb and beef exports by China and the Middle East had undoubtedly helped to lift prices and sentiment, Mr Horne said.

Overall confidence in crops has improved over the quarter. Wheat was the strongest performer, rising by 12.5 points from the neutral point last quarter.

Source: NAB

The Eastern States beef kill rose last week, but the biggest influence – an 11 percent rise in processing activity in Queensland – masked earlier public holiday intrusions.

A number of plants in southeast Queensland missed a day the previous week due to Brisbane Show holidays, meaning last week’s rising kill trend looked more substantial than it really was.

Take just two of the plants impacted – JBS Australia Dinmore (3400 head/day) and Australian Country Choice Cannon Hill (1100/day) and it’s easy to see where the state’s kill ‘leakage’ happened the previous week.

The 2.9pc rise in the national kill last week did little more than restore the numbers to where they sat before the northern holiday effect.

Queensland’s kill last week of 81,422 head was still 22pc above where it sat this time last year, showing that the high rate of kill brought on by the drought over the past six months is yet to show any real signs of abating.

Southern states, however, were mostly back in numbers, due to a combination of widespread and in places heavy earlier rain, and normal winter season plant closures.

The NSW kill of 33,589 head was -8pc last week, as plants like Nippon Australia Wingham and Throsby at Singleton shut for their customary low-season fortnight break. Even with the drop, NSW last week remained 6pc above last year.

Victoria was also in negative territory, dropping 3pc last week to 22,775, which may have been more rain cattle access-related. South Australia improved 6pc from a low number the previous week, to record a tally of 7501 for the week, while Tasmania may also have been rain affected, dropping 12pc to 3276.  

The slowing trend in southern states was highlighted by the fact that Queensland accounted for almost 55pc of the total Eastern States kill last week.

Qld grid prices produce lift

Some processors in Queensland are starting to show signs of shortening-up on cattle supply, with further 5c/kg price rises for grass and grain in two large southeast Queensland processor grids over the past seven days. Another multi-site processor has left rates unchanged, having a good booking of cattle already locked in for this week and next, but they may have to follow suit in coming days in order to secure supply.

The latest 5c/kg rise comes on top of a further 5c/kg lift the previous week in some grids. The best money Beef Central could find yesterday ex Southern Queensland was 320c/kg for four-tooth grassfed ox, 325c for 0-2 tooth, and 270-280c/kg for best cow. That’s the best cow money we’ve seen since the drought-impacted price decline started back in March, as room starts to again open-up in kills after coming under earlier heavy supply pressure.

Grainfed supply continues in abundance for both 70-day and 100-day cattle, due to heavy feedlot intakes three to four months ago. This was reflected in the recent ALFA quarterly feedlot survey which showed numbers on feed at June 30 at seven-year highs, of 873,000 head.

Oats-finished cattle out of southern Queensland and central/northern NSW are not coming forward in big numbers at this stage, and there’s no great expectation among processors of a flood of oats cattle over the next month.

“They’re not in big enough numbers, and look like being spread-out enough to have no real impact on the market this year,” one processor contact said.

Southern grids are still 10-15c/kg better than Queensland due to seasonal supply, but southern cattle numbers are likely to start to improve as conditions warm up, suggesting the price differential might start to narrow soon.

Cattle highlights on AgShow agenda

One of eastern Australia’s largest rural field days kicks off in Toowoomba next Tuesday, September 3, and includes a number of events of interest to the beef and cattle sector. AgShow includes Australia’s largest multi-breed, multi-vendor stud bull sale. To be conducted by Elders and Landmark on Wednesday, Sep 4 and Thursday, Sep 5, the catalogue comprises 331 bulls from 91 vendors representing 11 breeds. This year the main arena has been created as a demonstration area for exhibitors. Demonstrations will included the Yamaha Sky division unmanned helicopter and ODES 4 x 4 quads, including demonstrations in starting young horses in the stockyard. Queensland agriculture minister John McVeigh will be the keynote speaker at the Toowoomba Surat basin Ag Show Agribusiness lunch on Wednesday. At the Rural Press Club of Queensland breakfast on Thursday, Allied Beef managing director James McLean will discuss how the company has used strategic supply chain partnerships to build a network of 40 partner properties and a herd of 80,000 cattle since 2007. For tickets to the Rural Press Club breakfast click here.  For more information about AgShow click here

200ha irrigation for every northern cattleman: Katter

Katter Australia Party leader Bob Katter says an abundance of water in northern Australia should be used to drought-proof the region’s cattle stations. “I can’t explain to Indonesia or even to my own electorate why Northern Australia isn’t allowed to use virtually any of its water whatsoever for irrigation,” said Mr Katter. “Our party’s policy is that every cattleman gets 200ha of freehold irrigation so they can survive droughts, fatten cattle all year round, and get cattle prepared for the Indonesian market six months earlier. With micro-irrigation schemes in five Gulf of Carpentaria and Mid West towns, that would double Northern Australia’s cattle production.” He is also advocating the further development of Port of Karumba to become a major export hub for cattle exports from North Queensland to Indonesia, and to avoid the additional road transport currently required for large-volumes of cattle from the region to be exported out of Darwin.

New northern abattoirs a ‘win-win’: RSPCA

The RSPCA has welcomed the development of an abattoir on Yeeda station between Broome and Derby. This follows last week’s confirmation by the Australian Agricultural Company that it will proceed with the construction of an abattoir near Darwin. Around 255,000 head of cattle are expected to be processed through these two new facilities in the country’s north each year. “From an animal welfare perspective this is a great outcome. Between them, these facilities will dramatically reduce the travel time for many thousands of animals every year,” said Melina Tensen, RSPCA Australia Senior Scientific Officer, Farm Animals. “Animals that would otherwise be trucked thousands of kilometres south or east will now be processed much closer to home; and because transport is stressful for farm animals, that’s a big win for animal welfare.”

Vic livestock forums get social

The Victorian Farmers Federation’s Livestock Group is holding a series of open forums designed to provide an opportunity for farmers voice concerns about key issues, with the first forum to take place in Hamilton next Tuesday, September 3. VFF Livestock President, Ian Feldtmann said the forum will include a focus on the growing influence of social media in agriculture, with AgChatOz and VFF Public Affairs advisor Tom Whitty to speak on the issue. “I think many people have this idea that farmers aren’t interested in Facebook or Twitter, but that is not the case,” Mr Feldtmann said. “Its potential is enormous and often misunderstood. Our livestock team and the VFF have lead the way in the use of new media technologies to communicate to both VFF members and the wider community.” Weekly Times’ Western Victoria Insights reporter and Hamilton local, Kate Dowler will also speak about the role of the media in agriculture. The forum will be held on Tuesday, September 3. 2013, at the Comfort Inn Botanical, corner French and Thompson St, Hamilton, at a cost of $10 for VFF members and $20 for non-members.

Southern online beef manual refreshed

The More Beef from Pastures (MBfP) onlne manual has been refreshed, aiming at providing southern beef producers with tools designed to achieve sustainable increases in the amount of beef produced per hectare. National MBfP co-ordinator Peter Schuster said the average producer only utilises about 35pc of the feed on offer. “The feed is often already there. It is when you graze it and how you graze it that makes all the difference,” Mr Schuster said. “Even if we lift pasture consumption by just 10pc, from 35pc to 45pc, that's an increase in production for a relatively moderate shift.” The MBfP program also covers herd health and welfare, weaner management, marketing and property planning. “All of the information previously available through the program has been consolidated, updated and where required, rewritten to reflect the latest R&D outcomes, particularly the outcomes of the Beef CRC,” Peter said. For more information about the online manual click here

Drought in parts of Central China is accentuating rising prices for beef and some other meat proteins.  

Chinese media reports suggest drought since mid-June has spread in central China's Hunan and neighbouring Guizhou and Hubei provinces, leaving more than one million people short of drinking water.

About four million hectares of agricultural land and 1.7 million head of livestock, including 860,000 cattle, have also been affected in Hunan Province, alone, according to government authorities. The extreme weather has also caused 186 rivers and 252 reservoirs to dry up.

Hunan province has sent 13,000 water tankers to irrigate croplands and provide water for 365,000 people, the government’s drought headquarters said. The drought is expected to continue as the province continues to experience high temperatures but little precipitation, according to the Government’s meteorological department.

Two of the key drivers for the strong demand for imported Australian red meat from China in recent months have reportedly been the stricter food safety management and a decline in domestic cattle and sheep numbers in China.

Latest Chinese red meat retail prices, released by the Ministry of Agriculture, indicated a continued shortage of red meat supplies.

MLA reported that Chinese boneless beef retail prices during July hit an all-time high, averaging RMB 59.38/kg (A$10.70/kg), with bone-in sheepmeat prices registering the second highest prices, at RMB 61.87/kg (A$11.20). Chicken carcase and boneless pork prices continued to rise for the second consecutive month, at RMB 16.85/kg (A$3.05) and RMB 23.75/kg (A$4.30), respectively.

To put the price rises into some context, beef prices in June (RMB 58.86) were 32 percent higher than the same time last year. Sheepmeat was 22pc higher, while pork and chicken were also marginally higher. The rise in price for beef appears to have triggered some liquidation of the domestic cattle herd, as livestock owners to cash in on the buoyant market for beef.   

Accentuating the rising retail price rises has been the country’s drought event. The Chinese Government reportedly has allocated 1.65 billion Yuan, in an aim to provide support for producers impacted by the drought.

For the fiscal year ended June 30, China took 92,300 tonnes of Australian beef, compared with just 7700t for the previous 12-month period. That’s a breathtaking 1098pc increase in volume – a rate of growth unprecedented in Australia’s export history in any ‘major’ beef export market.

FARMERS' use of the internet has surged to 8.5 hours a week this year – the equivalent of a full ‘working day’, a comprehensive study has found.

The ‘Source Resource’, compiled by agribusiness data supplier, KG2, is an audit of how Australian farmers and graziers get their information, through media and other channels.

The communications audit showed internet usage in farm businesses has surged from 5.6 hours per week in 2010 to 8.5 hours/week this year.

Presently, farmers use the internet for email (49pc), banking (38pc), weather information (32pc) and product and information gathering (31pc).

The report suggested the level of social networking via the internet was surprisingly low among farmers, at 10pc.

‘Farmers’ were most likely to be the main user of the internet in their household (51pc), followed by their ‘spouse’ (37pc) and/or their children (10pc).

“What this shows is that the internet plays a vital role in the efficient and productive operation of many farm businesses,” KG2 director of solutions design, Robert Woods said.

Farmers see merit in NBN

The research study also found that farmers do care about the National Broadband Network (NBN) – and they believe it will greatly benefit their businesses.

The report found that almost half (46 percent) of farmers surveyed would find the increased bandwidth provided by the NBN beneficial, or extremely beneficial, Mr Woods said.

“Farmer attitude towards the NBN is very positive, with close to half identifying the NBN as presenting an opportunity to further streamline their business through an increase in online research and banking specifically,” he said.

The perceived benefit of the NBN was highest in respondents from Victoria (53pc), followed by NSW (49pc), South Australia (47pc), Western Australia (45pc), Queensland (38pc) and Tasmania (34pc).

Based on analysis of 1019 telephone interviews with farmers across the beef, sheep, dairy, grains, mixed farming, sugar and cotton sectors, The Source Resource claims to be is the largest information warehouse of Australian farmers’ media habits.

The Source Resource is a comprehensive profile of Australian broadacre producers’ television, radio, print media, internet, networking, key influencers, key input supplier interactions, direct mail, mobile phone use and outdoor advertising.

The report is built on data collected over the last decade, with the latest round of research completed in July 2013, and can be cross-referenced with a range of other information collated by KG2.

• To purchase the report, register your interest by email, by clicking here.

Australia's peak farmer representative group has welcomed a Coalition pledge to reinstate funding assistance for respondents in native title cases if it wins Government.

The Labor Government cut assistance to pastoral respondents in native title claims on January 1 this year, but left assistance for claimants intact.

The Government defended the move as a necessary cost cutting measure, saying rural landholders, as commercially viable enterprises, had the resources to fund their own defences.

Funding assistance for pastoral respondents had never amounted to more than $1.8m in a single year, while annual funding for claimants had totalled $6m.

At the time of the cuts landholder groups argued that federal assistance for pastoral respondents was a small price for the Government to pay to progress a native title process that was gradually gaining momentum and harbouring a strong spirit of good will on both sides.

After years of slow progress, eight resolutions were achieved last year, and a further 17 were expected to be finalised this year, but without funding assistance, rural groups said the entire process was at serious risk of collapsing.

The National Farmers Federation, which had called for both the Government and Coalition to restore funding support for funding to native title respondents, welcomed the Coalition's announcement to reinstate funding should it be elected.

NFF CEO Matt Linnegar said respondents should have equal access to justice as claimants in the native title process.

“Last year, the Federal Government decided to cut funding to native title respondents but continue funding to claimants, creating an imbalance in the system and inequality between the treatment of claimants and respondents,” Mr Linnegar said.

“This decision severely jeopardised the goodwill of respondents, primarily farmers and landholders, in the native title process in favour of Government cost cutting.

“Disappointingly for all parties, it also meant that the native title process was disrupted, with Courts having to deal with an increase in the number of self-represented farmers or legal representatives for a host of individuals – as opposed to the previous system where one lawyer and one Native Title Officer, funded by the Federal Government, represented all of the pastoral respondents in one claim.

“Since this time, the NFF and our members have strongly advocated for the reinstatement of funding for respondents to the tune of $2.2 million – hardly a vast sum for the Government, yet vital funds for the more than 1000 respondents still to have their native title cases heard.

“With less than two years left to run in native title cases, and with cases still ongoing, the reinstatement of respondent funding promised by the Coalition would come at a critical time.

“We welcome the promise made by the Coalition to reinstate the funding - ensuring a return to a fair and equitable native title system – and will work closely with the party if elected to ensure this is enacted quickly."

A large island in eastern Indonesia, located just two days sailing from Darwin, is on track to become a new processing centre for Australian live cattle and beef in Indonesia.

The development is a joint venture between AustIndo Pty Ltd, a company owned by Australian cattle and beef industry interests and headed by former large-scale Qld and NT cattleman Garry Hill, and Indonesian company Ficorp Pty Ltd, owned by Indra Hasan, an Indonesian businessman with significant interests in ship building, coal mining and forestry in Indonesia, and strong Indonesian Government connections.

While moves to bring Australian and Indonesian partners together have recently gained momentum following Indonesian Government calls for greater Australian investment in its cattle and beef supply chain, the AustIndo/Ficorp project has been in the making for more than three years.

Mr Hill first met Mr Hasan in 2010 during meetings with the then-Indonesian ambassador to Australia, Primo Alui Joelianto, in the wake of Indonesia’s decision to introduce 350kg weight limits on Australian cattle imports.

Mr Hill and Mr Hasan found common ground in their discussions about the need for strong, long-term investment partnerships that recognised the needs of both countries.

Since then they have jointly investigated a number supply chain development options, a process which has taken Mr Hill to all corners of Indonesia including Kalimantan, Aceh and Timor.

That led to Sumba Island being identified as an ideal location for the development of a modern importing and processing facility for Australian cattle.

Mr Hill gave Beef Central an insight into the progress of the joint venture during the IndOz beef trade and investment forum in Brisbane last week.

Sumba Island is a 91,000ha island in the Nusa Tenggara Timur province in eastern Indonesia, just two days sailing from Darwin.

While it is home to a city of three million people, and several smaller villages, the island’s land area is largely undeveloped.

Under a joint venture also involving Primo Small Goods based in Scone, NSW, AustIndo and Ficorp have advanced plans to develop a modern abattoir on the island, adjacent to a new deep-water seaport which is currently being developed.

Mr Hill has an existing partnership with Primo Smallgoods under the brand Indo Primo, which is currently exporting carcase and packaged beef from Australia directly to Jakarta.

The first stage of the Sumba Island development, expected to be completed next year, will involve the construction of a slaughter facility with freezing capacity, which will enable ready-to-slaughter cattle imported from Australia to be processed into quarter beef for distribution into Indonesia’s larger population centres, such as Java and Sumatra, or for re-export to other countries.

Through its Indonesian partners the project has received strong support from Indonesia’s Central Government.

The Government has approved the project under its ‘masterplan for the acceleration and expansion of Indonesia’s economic development’, and has granted a 50-year license to AustIndo and Ficorp to use 69,000 hectares on the 91,000ha island.

The Government is also doing a lot of the ‘heavy lifting’ required to develop supporting infrastructure for the project.

It is currently constructing a new seaport, which as of last week had been 80pc completed, while the Indonesian military and university scholars were also assisting by providing training to local villagers and building infrastructure such as roads and fences.

The location of Sumba Island in Indonesia’s easternmost territories is also seen as a potential future asset for Indonesia’s border security.

“It is a multi-purpose investment, we hope one day it will be a distribution centre for a lot of products that come for Australia that can be quarantined and go through a customs centre on the site,” Mr Hill said.

Mr Hill said the Indonesian Government was seeking “honest help and expertise” from Australia to invest in and build beef supply chain infrastructure in the country.

One of the key obstacles that currently stands in the way of the project’s viability is the lack of import permits for ready-to-slaughter cattle from Indonesia.

However Mr Hill said the project's Indonesian partners were confident the Central Government will ultimately increase permits for ready-to-slaughter cattle in order to underpin security of beef supply.

“This is one of the many ways they have to fix their food security problems, and where Indonesia can have a direct relationship back into industry,” Mr Hill said.

While the Indonesian Government has been strongly urging Australian investors to invest capital and expertise in the country’s beef and cattle supply chain for more than a year, to date that invitation has generated little in the way of new investment.

Australian industry stakeholders at last week’s IndOz forum blamed an uncertain investment and regulatory environment for the lack of engagement to date.

Beef Central asked Mr Hill why AustIndo has been prepared to take the plunge where others were cautious to tread.

He said that finding a partner closely associated with the Government was essential to providing to a higher level of certainty.

Mr Hill said the Central Government had supported the project to date and in time he believed it was likely the Central Government would eventually take ownership.

“The Government has shown their will to do this through agreeing to put it into their management plan,” Mr Hill said.

“What we have done has gone out and establish this operation though private enterprise, with the view that it will one day become a Government enterprise.”

Future stages of the development will include breeding operations on the island and further processing capacity including boning rooms and packaging operations to enable greater value-adding.

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The Bureau of Meteorology’s latest three-month outlook for rain has lost some of the optimism present in the previous three-month outlook issued a month ago.

In that report, the Bureau said a wetter than normal August to October was likely for most of mainland Australia.

The latest outlook issued overnight, which covers the period from September to November, has wound back forecasts of a wetter than normal conditions to the Top End of the Northern Territory and southeast Australia.

It lists the chances of a wetter or drier season for Queensland, most of south Australia, most of Western Australia and the rest of the NT as being roughly equal.

Driving this latest forecast has been a weakening negative Indian Ocean Dipole, a neutral-to-cool tropical Pacific, and locally warm sea surface temperatures.

The outlooks lists the chance of exceeding the median rainfall for spring at more than 60pc over most of southeast Australia and the Top End of the NT, and over 70pc for central Victoria.

(Such odds mean that for every ten years with similar climate patterns to those currently observed, about six to seven spring periods would be expected to be wetter than average over these areas, while about two to three would be drier.)

Odds suggest a less than 40pc chance of above average rainfall over southern parts of the Kimberley in WA. In other words, the chance of below normal rainfall is greater than 60pc.

The chance of receiving a wetter or drier than normal spring is roughly equal (i.e., close to 50pc) over the remainder of the country.

Climate influences

The Bureau has provided the following explanation of the climate influences behind the latest outlook:

The negative Indian Ocean Dipole (IOD) event that has been influencing Australian climate since mid-May has weakened over the past four weeks.

Despite this, sea surface temperature patterns continue to be consistent with a negative dipole event.

The majority of climate models expect this negative IOD event to persist until mid-spring. A negative IOD during winter-spring increases the chances of above-average rainfall over southern Australia, while over parts of northern Australia it increases the chance of higher humidity.

This is reflected in the rainfall outlook, with most of southeast Australia expecting above normal rainfall.
The tropical Pacific has remained ENSO-neutral since mid-2012.

The dynamical seasonal outlook model suggests ENSO-neutral conditions will remain for the rest of 2013. This means there is no strong shift in the odds from the tropical Pacific, and is reflected to some degree in the rainfall outlook, with much of the country having odds close to 50pc.

Warmer than normal sea surface temperatures currently surround much of western and southern Australia. Warmer sea surface temperatures can provide more moisture to the atmosphere, which in combination with the right weather systems (e.g. interactions with fronts or northwest cloudbands) may result in increased rainfall.

Source: BOM

A total of 8200 head of cattle were penned at Roma’s Store Sale on Tuesday.

Weaners under 220kg topped at 188c/kg and averaged 145c/kg, while weaner steers in the 220-280kg range reached 184c/kg and averaged 150c/kg. Steers in the 280-350kg range reached 178c/kg and averaged 152c/kg, and steers in the 350-400kg range reached 178c/kg and averaged 160c/kg. Feeder steers in the 400-550kg range topping at 170c/kg and averaging 163c/kg.

Peel Mungerie, Inverness, Blackall, sold Santa steers to 179c/kg for 266kg to return $476/head with the consignment averaging 179c for 246kg to make $442.

P & M Wade, Ravenscourt, Charleville, sold Charolais-cross steers 179c for 220kg to return $395.

Glentulloch Grazing Co, Glentulloch, Injune, sold EU Santa-cross steers 178c for 350kg to return $624 with the consignment averaging 177c for 311kg to make $550.

Lambert Pastoral Co, Lambert, Charleville, sold Hereford-cross steers to 176c for 340kg to return $599 with the consignment averaging 175c for 285kg to make $498.

N & C Maunder, Warraweena, Wallumbilla, sold Angus-cross steers to 175c for 296kg to return $518. 

E & C Rolfe, Nindinna, Roma, sold Charolais-cross steers to 175c for 303kg to return $531 with the consignment averaging 166c for 311kg to make $516. The Charolais-cross heifers sold to 136c for 340kg to return $463 with the consignment averaging 133c for 304kg to make $405.

R Fawckner, Bonnie Downs, Corfield, sold Charolais-cross steers to 175c for 228kg to return $399 with the consignment averaging 175c for 209kg to make $365. A Charolais-cross heifer reached 140c for 260kg to return $364 with the consignment averaging 129c for 229kg to make $295.  

Perrett Cattle Co, Tunis, Injune, sold Charolais-cross steers to 169c for 449kg to return $760 with the consignment averaging 165c for 431kg to make $711. 

Bruce Smith, Coleraine, Mitchell, sold Santa-cross steers to 169c for 443kg to return $749 with the consignment averaging 169c for 432kg to make $730.

Emma Baker, Bodell Station, Julia Creek, sold Charbray-cross steers to 169c for 383kg to return $648 with the consignment averaging 154c for 338kg to make $520.

Dalco Pastoral, Sugarloaf, Wallumbilla, sold Shorthorn-cross steers to 167c for 525kg to return $878 with the consignment averaging 167c for 457kg to make $764. 

J & E & N McEwan, Wyoming, Injune, sold Angus-cross steers to 167c for 493kg to return $825.

T & R Wichlacz, Woodbine, Muckadilla, sold Santa-cross steers to 166c for 472kg to return $784 with the consignment averaging 168c for 348kg to make $585.

W & P Anderson, Juandah Downs, Mungallala, sold Charolais-cross steers to 166c for 317kg to return $528 with the consignment averaging 161c for 268kg to make $462. The Charolais-cross heifers sold to 135c for 277kg to return $374 with the consignment averaging 127c for 300kg to make $380. 

S & V Tennyson, The Pines, Miles, sold Angus steers to 165c for 305kg to return $503 with the consignment averaging 150c for 229kg to make $344. The Angus-cross heifers sold to 130c for 226kg to return $294 with the consignment averaging 124c for 217kg to make $270.

Heifers in the 350-450kg range reached 154/kg and averaged 127c/kg.

Heifers in the 280-350kg range topped at 144c/kg and averaged 113c/kg.

Heifers in the 220-280kg range topped at 148c/kg and averaged 127c/kg, while heifers under 220kg topped at 148c/kg and averaged 132c/kg.

W & M Jones, Norolle, Roma, sold Romagnola heifers to 148c for 466kg to return $691 with the consignment averaging 137c for 363kg to make $498.

R & H Hall, Allawah, Lightning Ridge, sold Santa heifers to 148c for 238kg to return $358 with the consignment averaging 143c for 251kg to make $359.

M & M Bright, Karoola Park, Roma, sold Angus-cross heifers to 144c for 324kg to return $467 with the consignment averaging 142c for 355kg to make $503.

Cows over 500kg hit 127c/kg and averaged 115c/kg, while cows 400-500kg topped at 129c/kg and averaged 100c/kg. Cows in the 300-400kg sold to 106c/kg and averaged 69c/kg.
Cows and calves N/A.

Bulls up to 400kg reached 141c/kg and average 116c/kg.

THE Coalition will directly contribute an additional $100 million to the fifteen Rural Research and Development Corporations if elected on September 7, it announced this morning.

Shadow Agriculture minister, John Cobb announced the package as a key plank of the coalition’s campaign platform on agriculture. The National Farmers Federation immediately lent its support to the announcement.

“As the Prime Minister’s science and innovation council has stated, the decrease in real investment in R&D has led to the substantive decline in underlying productivity growth in the Australian agricultural sector,” John Cobb said.

“We fundamentally believe Australia must invest in its farmers and farm sector now, if we are to have a prosperous, sustainable and profitable future,” he said.

“This R&D funding will provide industry with the capacity to deliver cutting-edge technology, continued applied research, and an increased emphasis on collaborative innovation and extension.”

R&D, innovation and extension for profit were critical for the continued productivity growth of safe, nutritious food to meet national and global food and fibre needs, he said.

“While the government pays lip-service to agricultural R&D, the reality couldn’t be more contrary. Labor continues to plunder the agricultural portfolio, which has been emaciated - dropping from an annual budget of $3.8 billion in 2007 to under $2 billion today,” Mr Cobb said.

“Shamelessly, R&D is cited by the Labor government as one of the key planks of this push to capitalise on the so-called Asian Century. Yet, Labor abolished Land and Water Australia and cut $63 million in CSIRO agricultural research.”

“Labor planned to support the Productivity Commission’s recommendation to halve the government’s contribution to R&D Corporations. It was only pressure from industry and the Coalition that shamed the government out of it,” he said.

Three vital agricultural CRCs - Beef Genetics, Cotton Catchment Communities and Forestry - had all been abolished under Labor, Mr Cobb said.

“Today the Coalition again commits to further investment in agricultural R&D which focuses on increasing the profitability of the sector,” he said, while announcing the package.

“The Coalition will commit to working with farm industries to ensure that R&D funding achieves maximum advantage for Australian jobs, Australian growth, Australian prosperity and importantly the profitability of the sector.”

NFF applauds commitment

The National farmers Federation strongly welcomed the announcement saying it would will go a long way towards rebuilding vital investment in agricultural RD&E.

“We can’t stress strongly enough how important an increase in funding for agricultural RD&E is to our nation’s farmers and the future of Australia’s agricultural sector,” NFF chief executive Matt Linnegar said.

“Australian farmers are already more efficient that they have ever been, growing more food and fibre using less land, less water and less labour than at any time in Australia’s history. And yet, with a growing world population, the pressure is on for farmers to grow more with even fewer resources.

“That’s why R&D, and in turn, extension, is so important – driving innovation to help farmers improve both productivity and profitability," he said.  

“As we have long said, there has been very little real growth in public investment in Australia’s RD&E since the 1970s, and now the sector is feeling the impact with slowing productivity growth. The foot is off the pedal at a time when we need to speeding up, not slowing down," Mr Linnegar said.

In the lead up to the election, the NFF has been calling for an increase in total national expenditure in agricultural R&D, including both public and private investment, by one percent by 2015 – an increase of $281 million over the next two years.

“What we have seen today from the Coalition is a commitment to increase public investment in agricultural R&D by $100 million – an excellent first step towards reaching this goal.

“We will be working closely with the Coalition, if elected, to turn this election promise into core agricultural policy,” Mr Linnegar said. 

While there has been some movement in the value of inputs used in Beef Central’s fortnightly grainfed trading budget, the net result remains much the same, with the prospect of custom-feeding 100-day flatback cattle still squarely in the red.

Our latest calculation based on placing a flatback steer on feed yesterday for closeout in December, week-two, after 105 days on feed produced a loss of $55.

That’s a little better than three weeks ago, when the projected result was negative-$66, but still a big gap from our last projected net profit of $4, posted on the same exercise back on May 16.   

Using our chosen set of variables (see full list at base of page), we have added $5 to our feeder steer purchase price (ex Darling Downs) this week, to 175c/kg.

That’s due, in part, to a touch of urgency among lotfeeders in getting cattle on feed in time for slaughter prior to Christmas, with traditional meatworks seasonal closures looming.

That push is certainly not widespread, but it was evident in the feeder market this week. Cattle going on feed today for a 105-day program exit the feedlot on December 10, but the ‘pre-Christmas window’ for shortfed cattle will obviously close within the next week or so. Most Queensland export sheds are likely to close for two or three weeks from either December 20, or December 24.

Adding to the slowdown is the fact that post-Christmas can be a flat period for domestic beef sales, as households plough their way through leftover celebratory fare like ham and turkey.

Once the current pre-Christmas killing ‘window’ closes, some feedlot operators are likely to slow intakes for a period, which may briefly take some momentum out of the market for feeders.

Equally though, lotfeeders wanting to protect occupancy levels do not want their pens emptying out just prior to Christmas, because subject to weather and other variables, they can then be hard to re-fill.

The 175c/kg feeder price apportioned in our latest trading budget also reflects the fact that there are also a few less in-spec feeder cattle about at this time of year, and particularly due to this year’s weather effect.

There is also still a spread in pricing evident between north (Darling Downs) and south (say, Riverina), but southern store markets over the last week or so have shown a declining trend, due to cold and in places, wet weather.

Applying a feeder price of 175c/kg values the steer in yesterday’s calculation at $787 at induction, up $22 on three weeks ago, and considerably improved from a record-low 150c/kg liveweight in our budget three months ago when the steer was worth only $675 due to drought supply pressures. That’s a $112 lift in feeder purchase price, alone.

Ration price remains unchanged

The surprise packet in this calculation is ration price, which we have retained at $330/t, despite our earlier prediction that new-season grain harvest might see feed prices trending down.

Our feedgrain market sources earlier predicted that ration price by now might be back $20/t to around $310/t, but that hasn’t happened.

Feedgrain prices have held their ground, for two or three reasons: the deteriorating season and frost damage in some graingrowing areas; continued strong demand from feedlots (reference discussion about numbers on feed, below); and continued strength in exports.

The current ration cost in yesterday’s budget, at $330/t, is a record a record-equalling high for our report sequence, since it started way back in May 2011. It represents a total feeding cost over 105 days of $520. This, combined with the current feeder price, gives a total production cost of $1372, up $26 on three weeks ago.

Cost of gain, using our chosen variables (2kg/day ADG, for 210kg gain over 105 days) remains unchanged at 246c/kg. This time last year, the cost-of-gain was around 200c/kg on a $280/t ration price, and a feeder price of 200c/kg.

The above inputs suggest a breakeven figure in yesterday’s budget of 396c/kg – a 7c/kg rise on three weeks earlier due to feeder steer purchase cost.

That is getting close to the ‘round $4 figure’, where many would suggest that the current market should be for 100-day slaughter cattle, given recent currency movements over the past three months. Producers have shown admirable patience in accepting that it takes time for 15pc swings in currency value to ‘work their way through the system,’ but Beef Central detects a growing expectation that this relief will be shared more broadly through the price/supply chain.

Historically speaking, the last time we recorded a 400c/kg breakeven was briefly in August-placements last year at 402c/kg, on a forward slaughter price in the 390s; ration price of $270/$285; and feeder price of 200c.

The highest-ever breakeven was a 412c figure in December 2011, on a 215c/kg feeder market.

Forward pricing

Current forward public grid prices for 100-day ox from Southeast Queensland processors for December 10 close-out, have lifted 10c/kg since our last calculation. Public bids obtained yesterday were around 380c/kg dressed, suggesting there is still good margins available to processors at that rate, and cattle are being sold forward at those figures. The fact that processors are still keen to maintain high rates of kill reinforces the view that there are still good margins present in export processing.

The pricing perhaps also reflects the traditional shortage of well-finished slaughter cattle in the run through to Christmas, when prices often rise as a result.

As mentioned in our intro, the variables outlined above deliver a $55 loss on our trading steer, $11 worse off than the $49 loss figure a fortnight ago.

Looking back at 100-day flatback cattle that went on feed back in May for slaughter this week, they had a breakeven at 349c/kg according to our calculations, on forward-contract meatworks rates then were around 350-355c/kg. The margin per head then was a modest $3 profit.

The market for spot 100-day cattle in Southeast Queensland this week is more like 375c/kg. On that basis, processors who secured this week’s 100-day kill forward back in May are about 25c/kg (or $90 a head) better-off than they would have been buying those same cattle out of today’s spot market.

Looking forward, Beef Central’s supply chain contacts anticipate that feeder cattle numbers will become harder to come by over the next month or so, given that a lot of young cattle have already been moved out of the system. That is likely to put upwards pressure on price, especially if there is any sort of spring break across eastern Australia to add fuel from grass restockers.

Interestingly this year, there has been a premium for heavier feeder cattle 400-500kg over lighter store cattle, due to shortage of grass.

Don’t be surprised to see a 10, 15 or even 20 percent rise in feeder prices in coming months, given any sort of widespread spring break. As reported in a separate weather item this morning, prospects remain solid for above average rainfall across larger areas of Eastern Australia over the next three months.

We’ve gone from situation where the feeder market was completely over-sold and under a lot of pressure due to drought in May, to a situation now where the market is still heavily drought affected from a catle flow perspective. But as often happens, the longer the drought, the quicker the turnaround, should we be blessed with a reasonably start to the spring/summer growing period.

Numbers on feed at seven-year highs

As reported in Beef Central’s news item last week, cattle numbers on feed hit a seven-year high across Australia for the June quarter, based on the latest ALFA/ MLA feedlot survey.

The 9pc increase saw numbers on fed rise to 873,000 head, influenced heavily by the impact of drought across large areas of western and northern Queensland, NSW and the NT, forcing producers to place cattle on feed as a finishing strategy, or sell cattle cheaply (click here to access original report).

Reports suggest access to pen space in Queensland feedyards is still very hard to secure, as drought pressures continue. Close-out pens are inevitably re-filling overnight.

• 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 450kg liveweight feeder steer fed 105 days; 356kg dressed weight at slaughter; ADG of 2kg; consumption 15kg/day 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. 

WHILE it’s great for beef export prospects, a falling A$ is not good news for fuel prices, Beef Central’s monthly diesel price watch shows.

Diesel fuel in regional and rural areas of Australia has continued to climb in price over the past month, hitting three-year highs during August. That follows nine-month lows as recently as May, when prices fell to 148c/litre.

Pricing data released by the Australian Institute of Petroleum shows that for the week ended Sunday, August 25, the average retail price for diesel in country areas rose to 159.1c/litre, about 11c/litre higher than where it sat this time in May (see graph below).

Analysts say both diesel and petrol prices are likely to rise further, as the effect of the 14pc decline in the value of the A$ compared with the US$ over the past two months continues to take effect.

Australia is only about 40pc self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.

"Higher crude prices and a substantially weaker Aussie dollar, pushing up the cost of imported fuel, have seen domestic pump and wholesale prices rise considerably over the past few weeks," an energy sector analyst said.

"Had the Aussie dollar remained at levels it was three months ago (US105c) fuel users now would be saving around 12c/litre of petrol or diesel."

The currency impact has been seen in rises in regional and rural areas in all Australian States and territories over the past month, with the biggest jumps seen in South Australia, Victoria and NSW.

Regional non-metro diesel prices in the latest AIP report included:

• Victoria 156.5c/l (up 8.8c/litre since late June)
• NSW 159.0c (up 8.7c since late June)
• Queensland 158.8c (up 7.9c)
• WA 162.4c (up 7.7c)
• SA 158.0c (up 9.1c)
• TAS 161.8c (up 7.5c), and
• NT 174.3c (up 6.7c).

The prices are calculated as a weighted average of retail diesel fuel for country regions in each state/territory. All values include GST.

Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.

Crude oil, diesel and petrol prices are closely ed, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, meaning that changes in the value of the A$ against the US have a direct impact on the relative price of crude oil in A$ terms.