August 6, 2003

Specialist Beef Producers In Australia Hit By Sharp Rise In Fodder Costs In 2002-03

Incomes for Australia's specialist beef producers have fallen after hitting record levels during 2001/02, according to the 2003 Australian Beef Industry Report commissioned by Meat and Livestock Australia (MLA) and released by ABARE today.

MLA chief market analyst Peter Weeks said specialist beef producer cash incomes were predicted to have fallen by around 67% in 2002/03, largely due to the drought.

"Cash incomes for 2002/03 are estimated to have dropped to an average of $24,300 per farm, which is largely due to lower saleyard prices and the sale of unfinished stock during the drought," Mr Weeks said.

"It must be remembered, however, that in the 2001/02 financial year the estimated cash farm income for specialist beef properties was the highest in over 25 years, in real terms, at $73,200 per farm."

Compounding the drop in cash farm income was an estimated increase in supplementary feeding, helping to push up total cash costs. 

"Fodder costs increased from an average of $11,965 per farm in 2001/02 to an estimated $19,318 per farm in 2002/03," Mr Weeks said.

Other key points in the report include: 

• On average, the financial performance of corporate properties is better than the top 10% of family owned properties, with a rate of return of 10.3% and 4.4% respectively.
  
• The number of farms acquiring additional land and expanding the size of their beef enterprise reached the highest level recorded in the past 26 years in 2001/02.

Source: Meat and Livestock Australia