Beef producers rebuild after drought

Posted by Nicole Eckersley on 10th June 2010

Improved seasonal conditions throughout much of Australia this year are expected to help producers rebuild cattle numbers to expand future beef production, according to a new report, Australian beef: Financial performance of beef cattle producing farms, 2007-08 to 2009-10, released by ABARE on Tuesday.

While herds are rebuilt, sales will be reduced, with farm cash incomes expected to fall by 18% to $66,000 per farm in northern Australia, and almost 50% to $31,700 per farm in southern Australia.

“The larger fall in average farm cash income in southern Australia reflects the impact of persistent dry conditions since the 2002-03 drought which has led to extensive destocking in this region,” said ABARE Deputy Executive Director Paul Morris. “This destocking is expected to limit the recovery in calving numbers in 2009-10.”

Data also showed that producers who sold cattle directly for slaughter earned the highest farm cash income per hectare. The returns from sales to other markets – live exports, feedlots and other producers – varied according to location.

The analysis also found that, while only a limited number of beef cattle producers used grain finishing prior to sale, on average these farms generated a much higher income per hectare than other producers.