The break of the drought in 2009-10 encouraged farmers to reduce turnoff rates and expand their herds, due to reduced costs associated with keeping cattle.
Melbourne, Victoria (PRWEB) March 13, 2015
Testing conditions have plagued the Beef Cattle Farming industry over the past five years. According to IBISWorld industry analyst Brooke Tonkin, “varying weather patterns, fluctuating turnoff rates and government policies have influenced industry performance over the period.” Industry revenue is forecast to decline by 4.0% annualised over the five years through 2014-15. However, strong demand for Australian cattle and beef in export markets is expected to boost the industry over the two years through 2014-15. Industry revenue is forecast to grow by 11.5% in 2014-15, to reach $4.8 billion.
Beef cattle farmers have suffered through varying weather conditions over the past five years. “The break of the drought in 2009-10 encouraged farmers to reduce turnoff rates and expand their herds, due to reduced costs associated with keeping cattle”, says Tonkin. High rainfall in 2010-11 encouraged farmers to keep turnoff rates low and continue herd expansion that year. Reduced turnoff rates lower the number cattle sales, therefore reducing farmer earnings. Consequently, industry revenue fell over the two years through 2010-11. The downward revenue trend worsened over the two years through 2012-13. Stable beef cattle saleyard prices and a slight reduction in slaughter rates reduced revenue in 2011-12. Additionally, the Australian Government's one-month ban on live cattle exports to Indonesia in June 2011 drastically reduced export earnings. This ban resulted from concerns about animal welfare. Plummeting saleyard cattle prices in 2012-13, due to a substantial increase in turnoff rates that created an oversupply problem, reduced industry earnings that year. Adding to this pain was the Indonesian Government's live cattle import quotas, designed to create a self-sufficient Indonesian beef cattle industry by the end of 2014. However, Indonesia increased these quotas in late 2013, after postponing the target date for self-sufficiency.
The Beef Cattle Farming industry's prospects are expected to improve over the next five years. Industry revenue is forecast to grow over the five years through 2019-20. Increasing incomes and meat consumption in overseas markets are expected to boost industry demand. The volume of live cattle exports is projected to increase due to growing demand in Asian and Middle Eastern markets and depreciation in the Australian dollar. The Beef Cattle Farming industry is characterised by a low level of market share concentration. The overwhelming majority of operators in the industry are non-employing family businesses, with work carried out by the farm owner and occasionally their family members. Industry concentration has remained stable over the past five years, with the fall in establishments similar to the fall in businesses. Industry consolidation is expected to increase over the next five years. However, given the immense number of small operators, IBISWorld expects that acquisitions will be limited to a small number of larger operators.
For more information, visit IBISWorld’s Beef Cattle Farming industry in Australia report page.
Farms in this industry primarily produce beef cattle. This industry excludes feedlot, mixed livestock farming and grain-sheep or grain-beef farming operations.
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