Things are really warming up in the beef industry, particularly in the north with the Cattle Council threatening to sue the newly-formed Australian Cattle Industry Council.
The ‘stouch’ is not only about universal representation but the lack the beef industry’s peak body’s endeavour to address the growing uncompetitive position of the industry, falling consumption, rural debt and red tape.
Also in the sights of the newly-formed body are the draconian issues around Johnes disease. It says it costs $300 to process a body in Australian works, $150 in the USA and $100 in South America making our processors highly uncompetitive, with the producer naturally picking up the tab.
Domestic beef consumption has a long-term declining trend from 42kg per capita 10 years ago to 25kg today while consumption of competitive meat proteins increases annually. Domestic cattle prices are declining and the trend is for continued price reductions.
Rural debt is at unprecedented levels with economists estimating cattle producers are at an unsustainable $1000 per animal and red tape is crippling the industry with the promise of more.
There is no doubt that the new body under the guidance of Victorian John Gunthorpe will claim scalps and all producers should be holding their breath that changes to make the industry sustainable occur. The message is don’t sit back but become involved.
AWI head Wally Merriman used very strong language to a rural reporter when questioned about behind-glass observations of industry discussions, and you can bet he is not happy with the advice he was given to observe discussions in this way.
However this has been the way much of market research has been done since at least the 1960s according to a marketing friend, and this would have shown up in the reporter’s background research.
The Farm Management Deposits Scheme shows that 51,000 producers have invested $5.3 billion dollars as of August 2017. The scheme was set up to allow farmers, fishery operators and forestry interests to invest in the scheme with totally tax-deductible deposits.
These can subsequently be drawn down in difficult times of flood, fire, drought or market downturn. In buoyant times they lower tax burdens and, in some cases when they are drawn down, minimal or no tax is applicable.
The largest depositors in Victoria are dairy farmers with 1925 setting aside $168 million. In New South Wales the top investment comes from 3658 sheep wheat cropping mixed operations with $378 million. It would be no surprise that in Queensland 3326 beef producers lead the way with $421 million.