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OUR OPERATING ENVIRONMENT
The challenge to expand Australian red meat supplies has become tougher, given the competition faced from cropping for agricultural land, the reduction in feedlot activity, falling output prices, rising farm costs and ongoing drought. However, despite the above setbacks and ongoing challenges, ABARE’s June 2008 industry health check concluded that both the cattle and lamb industries remain in a strong position to expand production and incomes.
Despite buoyant global red meat markets over the past year, most Australian graziers and lot feeders have struggled.
This is due to ongoing drought, sharply rising farm costs (particularly for feed, fuel and fertiliser) and the erosion of sale prices, principally caused by the rising A$. Following widespread farm business losses for cattle and prime lamb farms across southern Australia during the particularly severe drought in 2006–07, a significant improvement was witnessed in 2007–08, particularly for lamb producers. However, farm business profits have mostly been good across northern Australia, assisted by reasonable seasons and the strong live cattle trade.
| AVERAGE ANNUAL INPUT, OUTPUT AND TOTAL FACTOR PRODUCTIVITY (TFP) 1977–78 TO 2005–06 | |||
|---|---|---|---|
| Input growth % | Output growth % | TFP growth % | |
| Total broadacre | -0.5 | 1 | 1.5 |
| Cropping | 1.4 | 3.7 | 2.3 |
| Mixed crop-livestock | 1.3 | 0.3 | 1.7 |
| Beef | 0 | 1.4 | 1.4 |
| Sheep | -1.6 | -1.3 | 0.3 |
| Dairy | 4 | 5.1 | 1.2 |
Source: ABARE
