October 11, 2006

Australian beef producers buy up land to expand operations

Cattle producers are snapping up land in central Queensland to convert to beef farms, hoping to have a piece of pie that is Australia's beef export market.

Greg Wouldiams, rural property specialist from Herron, Todd and White in the central Queensland says confidence in the beef sector has strengthened the property market, adding that some cattle producers are so optimistic they are finding cheaper land to expand their operations.

Would-be beef farmers are buying up traditional grain-growing properties to be converted to pasture, Wouldiams added.

This is despite a recent ABARE survey that some beef farmers are losing money even with high cattle prices as drought, higher energy costs and a weaker yen dragged down profits. A weaker yen meant lower demand for Australian beef in Japan, one of its chief markets.

Average farm cash incomes for Australian beef producers with more than 300 head of beef cattle fell a startling 70 percent to just AUS$26,500 (US$19,700) for 2005-06, according to the latest ABARE report, Australian Beef Industry - Financial performance to 2005-06.