News

Indo trade vital to northern viability: Producer

James Nason, 24/07/2013

Julia Creek cattleman Mark Bryant got straight to the core of the viability crisis facing Australia’s cattle industry when he asked the first question at yesterday’s Northern Beef Steakholder Forum in Mount Isa.

Mr Bryant explained that 15 years ago, northern producers were receiving the same price for their cattle that they are receiving now.

“But in that 15 years our on-property costs have gone up 287 percent,” he said.

“In 15 years our income hasn’t improved, but our costs have come up, and that is the big problem that the beef industry is facing now.”

Many contributing factors can be identified to explain why that is. When he first came to North Queensland 30 years ago, Mr Bryant said there were meatworks at Mount Isa, Pentland, Innisfail, Mareeba, Cairns and two at Townsville.

Now there is just one at Townsville, with other options further afield at Mackay, Rockhampton or South East Queensland.

The gradual loss of local processing capacity has not only diminished market competition for northern cattle, it has also meant producers have had to dig deeper to get cattle to market. The cost of freighting cattle from Mr Bryant’s property Ernestina Plains to the JBS plant at Dinmore a few weeks ago was $118 per head.

A combination of drought and increased debt levels meant many producers were now operating with extremely depleted herds, and faced tough-times cashflow wise ahead, because most had been forced to sell next year’s cattle at the current unprofitable price levels.

In his own case Mr Bryant started selling cattle to feedlots and slaughter markets and younger weaners to restockers back in January to catch the market before it collapsed to current levels, and is now running just 18 percent of normal numbers.

Mr Bryant said the impact of the live cattle ban two years ago, and the severe reductions in cattle quotas that have followed, had been the final straw for the viability of many northern properties.

While his own operation is geared towards producing steers for channel country finishers and cull females to domestic and export slaughter markets, he said all producers in the north had borne the brunt of the live export downturn.

“It has affected the market right across the board because those cattle (the hundreds of thousands normally shipped to Indonesia) have been coming onto the markets that we have been servicing, so obviously it has depressed the prices,” he said.

“The thing that really makes it tough for producers is that we can handle drought and we can handle a fair bit of debt, but we can’t handle poor government policy.

“It was really the poor decision to suspend the trade to Indonesia that has really driven the nail into the coffin.”

In the past producers have been constantly advised to increase efficiency or improve productivity to remain viable, but Mr Bryant said that barrow had been pushed about as far it could for many operations.

Somehow, prices had to get back into kilter with ever-rising costs for cattle businesses to remain viable in the long term. 

The best thing Mr Bryant felt the Federal Government could do at present was to patch the wounds with Indonesia and to try to open that market up, as well as signing a Free Trade Agreement with the important export market of Korea.

Mr Bryant said a key factor now was how banks would handle ongoing debt levels.

“A lot of good operators look like they could go out the door to if the banks aren’t a little bit more understanding and compliant,” he said.

“I think so far they have been, but I have just got a feeling that they are waiting in the wings for the market to pick up, for the season and the cattle market to pick up the property market.”

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