Posts Tagged With: Australian beef production

Hay & Fodder Suppliers to Live animal export.

For every $1M the NT beef industry generated in 2012/13 it created another $510,000 within the NT economy.

For every 100 jobs held in the NT beef industry another 36 are created in the NT economy alone.

(NT DPIF Outlook 2013)

I began writing this blog about service providers to the Live export industry but then realised I couldn’t really do that without showing the fluctuations in the live export markets and how that impact affected producers and thus the flow on to service providers.

Therefore I have broken the post into 2 sections.
1. NT Live cattle export – Darwin
2. Hay & Fodder Suppliers to Live animal export.

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I have not addressed animal welfare issues in these posts as I am working on some other blogs to address that.

Some service providers are paid arranged set prices for the goods they may supply such as hay or retail goods. Others  rely on commissions in the form of percentages of the gross dollars earned or rates of pay in regards to volumes of animals handled. e.g stock agents. Transporters are paid on a basis of volume carried and the distances they transport the stock on a kilometre rate travelled. Hay producers can be paid either per tonnage or rate of pay per bale supplied.

This post mainly focus’ on the fodder service providers to the NT live animal export industry.

The NT fodder industry has grown steadily in the last 18 years in line with the export of live cattle from the NT

Darwin LE v's Fodder_edited-1Chart 1. Live export of cattle from the Darwin port and the tonnage production of hay and fodder in the NT.

Fodder production_edited-1Chart 2. Production of hay, fodder and Silage in the NT and their combined value.

The most common pastures grown for hay production in the north of the NT are Jarra  and Cavalcade. Some forage sorghum’s that are suited to the tropics are also used to produce hay, these being Sudan and Sweet Sorghum.

Fodder production in the NT main problems are climate, weed management and nitrogen deficiency in the soils but also experience similar issues to any other cropping enterprise, poor rain seasons, insects, fire and costs of plant and equipment.

Many hay producers were impacted by the ban in June 2011, yet most didn’t produce cattle. Like us, the cattle producers, many hay growers wondered if their business’s were finished in 2011, as some of us thought ours may be. Now in 2014 they simply can’t supply enough hay for the movement of cattle that is now occurring through the NT’s only port Darwin.
Like us fodder suppliers faced difficulties in holding supply and stock in 2011. Now having unexpected market increases and demand for their product due to significant market improvement and influx of other states cattle, 2014 sees NT suppliers purchasing fodder from other states to ensure demands are met.

14.09.2014 055_edited-1Pic 3. Hay production, round bale production on natural pasture. South of Katherine. These are the bales we prefer to use simply for ability to lift and use with the smaller machinery we have, and our requirement to feed different small yardings of animals at any one time.

Hay growers produce round or large square bales. Cattle breeders feed these on their properties when handling weaners, working cattle and also to feed cattle intended for sale prior to transport.
On the one hand producers generally give an indication of how many bales they would like to purchase in pre-set agreements. On the other you can never be really sure how many bales you will go through. With the wet occurring late this year (time of writing November 2014) we were feeding hay for much longer period to young cattle than we had originally intended at the end of the dry season. This is a necessary cost we are willing to wear as these weaners could lose too much condition and possibly die without extra feeding. How much longer we will need to feed it is anyone’s guess and depends on the weather gods. We use round bales that weigh about 200kg and are convenient for us to handle.(Early December 2014 we have received some good early wet season storms). Square bales are much larger and heavier and are preferred by many producers. Economically the square bales are more cost-effective to transport and handle but they can weigh up to 500kg each.

06.06.13 012_weaners _edited-1

Pic 4. Weaners being fed hay. A round bale rolled out. An important practice to teach them handling ability and to learn that hay is food. Feeding hay to animals quietens them and desensitizes them to people.

The NT had a short history of silage production. I haven’t been able to find why this was discontinued.

Hay growers also supply hay to pre-export yards, which process the hay and mix it with other foodstuffs to process into pellets and fed in bunkers similar to feedlots, the cattle also eat the bales directly. Supply numbers to pre-export yards would be very difficult to estimate as some markets and cattle to be processed simply couldn’t be forecast with accuracy more than a few months from when orders are actually realised.
While export yards may have contracts and some degree of idea of numbers they work on, like us they can only store and handle so much hay at any one time, and like us are not likely to know forward export requirements by more than 6 months at best. There is no set pattern of which port a ship or country may obtain cattle from and exporters may rely on regional supply of cattle and the type of animal they require at the time, prior to announcing schedules of shipping.

To illustrate the variance from which port cattle may be exported to the same country I have used Indonesia as the common destination in the 2 following charts.

Northern ports exports._edited-1Chart 5. Cattle exported from the main north Australian ports to Indonesia.

Untitled_edited-1Chart 6. Cattle exported from other Australian ports to Indonesia.

27.11.2013 136_edited-1

Pic.7 Large Square bales being fed to export cattle in a pre-export yard south of Darwin. Square bales are approximately 3 times the weight of round bales. These cattle are also fed shipping pellets to prepare for export transport.

Fodder companies utilise hay to process into pellets, which is transported and used in the pre-export yards and on the ships as the animals’ transverse the sea. Supply to the export yards and shipping facilities is a 100% of their business for some fodder suppliers.

Livestock fodder currently loaded onto 5 carriers berthing at the Darwin port through December 2014 are estimated to be worth $1.3M on its own.

27.11.2013 153_edited-1

Pic. 8. Shipper pellets. Pulverized hay with other grain and fodder supplements, mixed with molasses to form pellets are transported in large ton sized bulk bags to ports for loading to ships. These are fed to cattle pre-export and while on the ships in transit.

Those who specialise in hay production have invested often many years in clearing and developing paddocks to suit their crop types, irrigation, machinery and general soil condition to optimise their cropping harvest abilities.
Most cropping for hay production relies on the wet season rainfall. Planting generally happens about November/December, with the pastures growing through the summer wet months, cutting and baling happening from March on wards through the dry season. Natural pasture production areas may be baled later in the year July through to September.
Peak demand for hay is through the dry with the mustering of cattle and the highest activity of the ships loading at the port.
At times hay producers are left with surplus supplies from the dry season of bales for which they still have on property and need to protect over the wet seasons. To maintain the integrity of the nutritional value of the fodder it is important that it is covered to protect it from water logging. Bales kept dry will be suitable for sale at a later date and therefore valuable to the grower as future income. Wet bales are worthless for fodder, In fact even dampness in bales can cause mould which can then be extremely dangerous for animals to consume.

Rainfall averages of Katherine’s 2.4m and Darwin 3.2m combined with high humidity and temperatures of the top end through the wet would soon turn large uncovered haystacks into soggy, hot and rotting piles of worthless gunk. I have left a hay bale in my garden for mulch as a full bale over one wet and actually seen it was fly blown due to it being perfect conditions for the maggots to survive moisture and temperature.

hay 001

Pic 9. Source. NT DPI stacking and storing hay. An example of large square bales stack with a tarpaulin cover to protect the hay from water logging through the wet season.

2008 had been a very low fodder production year, with below average rainfalls and ownership of some properties deciding to discontinue hay production.
2009 saw increased production of fodder but with a surplus of supply, some had to store hay over the 09/10 wet.
09/10 wet was a late finish for rains received which enabled record production, but the following wet 10/11 set in early meaning again some producers had surplus hay to demands and had to store it over the wet. The Indonesian imposed import quotas were also having a negative effect on demand due to the fact that the numbers of cattle being exported were in decline.
The 2010/2011 wet season had been a very good season for hay growers as it was a consistent rainfall event allowing for large tonnage of hay to be produced at 83,230t and valued at $19M. Some producers of natural pastures chose not to bale due to reduced demand because of the live export ban.
When the ban of live export to Indonesia occurred, June 2011. The export yards and ships stopped, many hay producers were left holding thousands of tonnes of bales that had been pre-ordered but suddenly those orders were cancelled or had been post-phoned. 2011/12 values of fodder dropped to $13.9M. Many growers had been left with excess bales from 2011 and didn’t want to bale more hay which they possibly couldn’t sell due to the uncertainty of markets at the time, therefore some pastures were left standing in paddocks.

A cubing plant located in Katherine, who had just finished substantial multimillion dollar upgrades, had operational and commitment costs to purchase hay of $500,000 per month when the ban occurred in 2011. They had two full road trains loaded and ready to leave the facility to transport the fodder to ships waiting to load cattle the very day the ban was invoked. Those truck orders were immediately cancelled and the fodder never even left the cubing plant. They had over 8,000 tonnes of hay on site ready to be processed for the coming season’s activity and yet they then had no orders.
The plant had to prepare for what they would do with the hay over the wet if it wasn’t processed. They didn’t have enough tarps to cover the stacks if it wasn’t utilised. Therefore to be prepared for the wet and allow manufacture time they had to order tarps in June, at a cost of over $8,000 each, they needed 10 of them. Some growers didn’t have the cash funds for tarps and simply left the bales to rot.
The cubing plant estimated it lost 90% of its sales within days of the ban being invoked, including subsequent price drops. Then they had to endure undercutting from interstate fodder suppliers when the cattle started to move in late 2011, everyone was desperate to shift their produce!
The plant had expected to use 2,000 tonnes of hay a month to process, but actually only processed 300 tonnes a month for several months following the ban. After the ban was lifted they supplied 3-4 boats a month, prior to the ban they had budgeted supplying 4 a week.
A contract hay baler who would travel with his equipment to properties around Katherine went from producing 30,000 large square bales in the 2010 season to only 10,000 in 2011 due to cancelled work. This cost his business, immediately! Over half a million dollars in lost income. People didn’t want to go to the expense of baling hay which probably couldn’t be sold, if they didn’t have tarp coverage for the hay it would deteriorate over the wet season and be of little value the following year.
Many hay producers immediately felt the financial strain of lost income when the ban occurred; they now had few outlets to sell too. This was increased when the 2011/12 wet season approached and large stands of hay stacks remained uncovered in paddocks or yards. Most didn’t have tarps.
As producers, like ourselves we were extremely wary of market improvements in the coming 2012 and 2013 years. We had been abandoned by the government when they had implemented the ban and the mood in general of market improvement was one of scepticism and wariness. Add to that the phone tapping scandals and poor intergovernmental relations between Indonesia and Australia. It appeared the Australian government wasn’t too concerned about re-establishment of good trade relations. It was hoped markets would improve but it wasn’t going to be quick, relationships were being rebuilt but it was a slow process, Cattle producers realised ESCAS would take time to develop and implement. So we waited. When Indonesia and other markets did open up late in 2011 and throughout 2012 the specifications of requirements for cattle were stringent and this also limited export numbers.
We slashed our budgets accordingly, which meant we curtailed any spending to only what was absolutely necessary. Hay orders were kept to the minimum as we simply didn’t handle many selling animals and they were returned to paddocks if markets weren’t available. We simply didn’t buy our normal levels of orders for steel, animal health, fencing equipment and machinery repairs.
The hay producers followed suit, they didn’t plant much when the planting period of November / December came and went over the 12/13 wet. and they knew if we were not going to shift cattle then they also would have limited markets to sell too and thus income. A few years previously the 12/13 year had been forecast to have fodder value at $14.8M, in reality it achieved only $12.4M.
We were all highly stressed and we were in self-preservation mode.
If we were going to go broke, we were taking a lot of others with us, not intentionally, but we were all linked. The thing was, we had to hold off going broke as best we could because we couldn’t sell our property on a sliding property market with poor prospects of live export for trade. So we did hope that markets come back because there’s really nothing else we could do but simply ride it out.
The hay producers in 12/13 wet again limited the planted areas to hay production. The wet season was below average with rainfall occurring in deluges then with long periods of dry spells in between. This caused poor germination and affected plant viability, some crops failed all together. Production was down for the coming 2013 dry season as the fodder was simply not as dense as usual and proteins levels had been affected. Fodder shortages did occur late in the dry season of 2013.
Cattle markets steadily improved in 2013 for live export cattle producers and there were murmurs of easing of the import quotas from Indonesia and substantial orders to Vietnam, but they hadn’t come on-line at that stage and prices while increasing were still only at break even. People were optimistically cautious.
2013 saw Indonesia presidency elections in full swing, with quiet acknowledgement that their self-efficiency would not be attainable in the short-term. In fact people were demanding meat and the governments needed to increase imports to meet their people’s demands. They implemented quotas based on the pricing of secondary cuts on their own wet meat markets late 2013 and into 2014. Vietnam was giving strong indications of not only surpassing their previous year’s cattle purchases but tripling them in 2014. We were optimistic, but the proof is only when the orders are called.
Hay producers again held back extensive planting for the 13/14 period. Cattle producers viewed reports of massive market number requirements with healthy scepticism, the growers wanted to actually see numbers shipped before they would commit themselves to large plantings.
2014 was a turnaround for live export for the cattle producers. The majority of Australia was in severe drought, cattle turnoff, including females was exceeding previous records dating back many years, cattle producers weren’t only selling normal stock they were selling breeders because of feed shortages. QLD and northern NSW was processing 11% higher than in 2013, southern states processing 23% higher(Weekly times 29/10/2014). The Australian processors were flooded with cattle and dropped their prices accordingly.

We finally had some serious competition in markets for cattle, Vietnam orders had materialised and Indonesia was importing near record numbers. Prices were above $2.00/kg and remaining stable. Other states producers were sending cattle to live export who had never live exported in their lives, the ability to sell feeder animals in a light weight of less than 350kg was a god send to some for income, otherwise they had no where else to sell. some meat processors were taking bookings months ahead with no quotation of prices. Live export was enabling many producers an income that was paramount to their financial survival, half of the 415,000 exported from the Darwin port at the end of October 2014 were from QLD.

This has placed un-prepared for demand for hay and fodder in the areas that supply the export yards, ships and general spelling of cattle, No only Darwin but spelling yards such as Cloncurry where animals were transited all needed hay.
2014 has seen such a massive demand for fodder that the hay producers in the north have been cleaned out and have received good prices. This is good for them and hopefully means many of them can regain some serious income going into 2015 as they conduct plantings now with the live export markets positive for the coming year.
The interesting things is, that Katherine cubing plant has had to truck in so much hay from down south to keep up with demand, they have dedicated 3-4 full road trains a week only for hay cartage. This has meant the cost of production has actually kept their profit margins down. They have seen producers leave the industry and the whole landscape and changed since the ban. After the ban the plant had so much hay in storage they didn’t buy any fodder off local suppliers in 2011 or 2012. This affected locals badly whose income was hay production, some sold up and left the industry entirely.
Recent articles concerning hay  looks positive for good market supply of hay for the coming year. Ironically I hope the increased demand for hay doesn’t mean that cattle producers can’t afford to buy it. Quiet simply we can’t operate without hay. As my husband would say “ hay is worth a couple of good men”. We need to have market accessibility and competition to achieve sustainable beef production. We also need our service providers.

Categories: Beef Industry, Cattle station, Darwin live cattle export, Dry Season, Hay and fodder production, Live Exports, Northern Territory., Uncategorized | Tags: , , , , , , | Leave a comment

Northern Territory Live Cattle export – Darwin

For every $1M the NT beef industry generated in 2012/13 it created another $510,000 within the NT economy.

For every 100 jobs held in the NT beef industry another 36 are created in the NT economy alone.

(NT DPIF Outlook 2013)

I began writing this blog about service providers to the Live export industry but then realised I couldn’t really do that without showing the fluctuations in the live export markets and how that impact affected producers and thus the flow on to service providers.

Therefore I have broken this topic into 2.
1. NT Live cattle export – Darwin
2. Hay & Fodder Suppliers to Live animal export.

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I have not addressed animal welfare issues in these posts as I am working on some other blogs to address that.

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Service providers to the Northern Territory live cattle export industry may not directly own cattle, but they fulfil a very important role to enable cattle production. They are many and varied, including fodder producers who grow and provide hay. Transporters , fuel providers or they supply goods and direct services, like stock agents or veterinarians. Without these service providers direct cattle producers simply wouldn’t have the capabilities to operate and conduct, our business of cattle breeding.

Ripple effect June 2011_edited-1

Chart 1. Ripple map illustrating the effects that the income of a live export producer has on the service industries and suppliers, in turn the cattle producers heavily rely on these other industries.

 As livestock numbers and the value of cattle fluctuate by direct income to producers, that in turn affects the direct supply and demand requirements of supplies.

Within the Northern Territory cattle industry there were, according to ABARES at the end of 2013, approximately 2 million cattle located in the NT. This is about 15% of the total Australian Beef herd.

NT Herd_edited-1

Chart 2. The NT Beef herd showing the long-term increase of the Mature female component and the total beef herd in the NT. Gradual increases have occurred since the mid 90’s due to better management and productivity practices and stronger influence of the Bos Indicus breeds.

600,000 sale animals are turned off annually from the NT; on average half go to live export and the other half to slaughter processors, or other producers in Australia.

NT Cattle Production_edited-2Chart 3. Source DPI & F overview Outlook 2013
Northern Territory Cattle – Value of production 2000-01 to 2017-18

2012 /13 Output cattle value of production for only NT origin cattle was $307.4M , including live exports and slaughter. For every $1M the NT beef industry generated in 2012/13 it created another $510,000 within the NT economy. For every 100 jobs held in the NT beef industry another 36 are created in the NT economy alone. (NT DPIF Outlook 2013). The beef industry dominates agricultural and fisheries production in the NT.

NT beef production operates on mostly natural open rangeland land systems dependent on natural rainfall occurrences. The Simpson and Great Sandy Deserts are located in the south, with very hot and dry climates and rainfall averages of 150mm per annum but very fertile soils. Contrastively the northern high rainfall tropics experience a distinctive high rainfall period and dry season with rainfall measurements of over 3m per annum with generally lower fertility soils.

Nt rainfall_edited-1Chart 4. The rainfall averages for the NT

NT map_edited-1Chart 5. NT map of Agriculture land uses.

 To illustrate how live export markets have fluctuated over the last several years the following statistics are based on predominantly the live export of cattle from the Northern Territories only port, Darwin.

Darwin total cattle_edited-1Chart 5. The tally of only cattle that have been exported through the Darwin Port 2009 – 2014 (Nov) to all destinations.

Darwin exports 09_11_edited-1Darwin exports 12_14_edited-1

Charts 6 & 7. All cattle exported from Darwin. This is the exact same data as chart 5

Darwin other animals._edited-1Chart 8. Other animals live exported from the Darwin Port. 2009-2014

High cattle numbers exported don’t necessarily mean more money earned per individual animal, producers are paid on a kilogram live basis on delivery of the animals, the price is dependent on current market situations.

Livelink 001Chart 9. Source LiveCorp. Livelink November 2014. Australian saleyard and live cattle prices. At $1.50/kg in 2013 a 330kg animal was gross value of $495, in 2014 at $2.60 that same weighted animal is now worth $858, 73% more than just 12 months previously.

In reference to the above chart  NT DPI quoted no prices for records for live animals. In May of 2011 the market was approximately $1.65/kg. When the Indonesian live export ban was implemented June 6, 2011 only the cattle already on the water (2713 hd) were recorded, nil export occurred to Indonesia in July 2011. Prior to June 2011 at least 21,000 head were transported to Indonesia every single month for the previous 4 years. Many of the cattle exported immediately after the lifting of the ban in July 2011 were already pre-contracted prior to June and therefore not relevant to pricing after.. Personally, with difficulty to even find space on ships. ABARES predicted at July 2011 there were 365,000 unsold export cattle unsold (QLD CL 28/07/2011). we were able to sell some cattle to Indonesian markets in late 2011 and the price was again $1.65/kg late in the year. It  was near impossible to sell cattle during the period of July to September. So many cattle were already in the ports supply region that stock agents weren’t even able to give producers prices because the exporters were simply not requiring more cattle to fill orders.

High livestock numbers does mean an increase in demand of goods such as hay and transport from service providers. These numbers have to be moving though. Many producers simply didn’t sell cattle and some didn’t even muster if they knew they couldn’t find markets.

Fluctuations, stoppages, increases and decreases in live cattle market demand has been impacted by many factors, some in conjunction and others significant in their own right. The following are not in any particular order and should not be considered as stand alone pressures that work independently to affect markets.

Import and live weight quotas by Indonesia were introduced in 2010 to attempt to obtain self sufficiency in beef production and consumption in that country. By the end of 2013  local Indonesian wet market prices increases had resulted in the significant easing of the policies as their government realised that 100% beef self sufficiency wasn’t possible in the short-term. A different quota system was introduced in 2014 dependent on pricing of secondary meat cuts in the wet markets. The trigger price is 76,000 Rp/kg ($7.43 AUS). If the local wet markets fall below this price, reductions will be made to limit import cattle and beef  into Indonesia. This is hoped to protect their own beef producers from oversupply by Australia and yet enable surety of beef supply for their nation’s consumption.

Indonesia. Import quotas_edited-1Chart 10. All  cattle exported to Indonesia from all Australian ports. Indonesian import quotas for live cattle were predominantly for feeder types >350kg. In 2014 part of the allocation was for heavier slaughter  and breeder cattle.

The Darwin port has handled approximately 40% of all Australian cattle exports for the last several years and exported 60% of those destined for South east Asia in 2013. While some say the export quotas were the most restrictive of live export numbers, at least in 2011 a quota is still a quota and some degree of market. The ban was a complete stoppage. On going effects of the Australian decisions did untold damage to relations at the time and are only now being significantly rebuilt. Prior to 2011 market analysts have assessed that the Indonesian self sufficiency targets were unobtainable for years, proven by the fact that the target dates themselves were often extended. Report opinions were that it was a matter of time before demand from local Indonesians would pressure their government to allow increased imports of beef and live animals.

Following the Indonesian live export ban it was significant that other markets were able to be increased to Vietnam that accepted heavier types of cattle than what Indonesia preferred.

Darwin major destinations._edited-1Chart 11. Major Destinations for Cattle from the Darwin Port.

Other factors impacting on markets are currency fluctuations, weather patterns, economies within Australia and other countries, currency exchange rates, animal type requirement in breed, weight and sex, animal values, ESCAS implementation and cost, competition from other countries and the Australian meat processing sector, health protocols and change in requirements of the importing countries for both type and volume of animals.

Darwin is the only live animal export facility for the NT, some of the service providers in the NT may service other states like QLD and WA.

2014 cattle that have been moved through the Darwin port have regularly been double of the average for the combined preceding 5 years. This is significant because previously most cattle from Darwin were NT sourced, in 2014 that was not the case.

Darwin 5 yr averages_edited-1
Chart 12. Darwin live cattle export numbers for 2014 compared to averages of the previous 5 years.

What I’m trying to show in these charts is that live cattle exports have been highly variable through the years with 2014 exploding.

A very broad estimate of about 80-90% of all Darwin cattle exported for the previous 5 years (Not including 2014) were sourced from  NT properties. 2014 has seen the NT supply portion drop to about 65%, as the Darwin port has received significant influx of cattle transported from SA, NSW and QLD. A news article in regarding October exports stated that of the previous few months cattle exports over half had been supplied from QLD.

The flow of cattle coming from other states will be assisting service providers to the industry but it takes time to grow and produce fodder and meet the demand requirements.

How predictable are future live cattle export markets? Goodness, how long is a piece of string!
Indonesia’s issuing of import permits will depend on the new system which they have developed with the base price of 76,000Rp. At the moment Indonesian import permits for 2015 have not been released and meat prices are trading over Rp 100,000 per kg. It is expected that Indonesia will increase its cattle and beef imports above 2014 figures.
In the MLA Beef Industry forecasts, Cattle industry projections mid year 2014 the live export markets are expected to remain relatively stable in overall numbers as to what was then forecast to be exported in 2014. Markets in Vietnam, Israel and now possibly Thailand and China are looking promising for requiring significant numbers of live cattle.

Forecasts 2015_edited-2

The main restriction on the numbers to export may will sourcing cattle, given the huge turnoff in Australian slaughter and live export for 2013 and throughout 2014.
For cattle producers this gives us some degree of confidence that markets will be relatively good in 2015, with forecasts of good prices to go with it. Production wise we don’t change quickly as it takes time to build up numbers to take advantage of market access. What it does mean is that we focus on making sure the cattle we do have, meet the required specifications of what the markets demand.
If the cattle producers have confidence that markets are going to be consistent and improve then we will also be buying up on the goods and services that we need to place our animals in the best health production and presentation wise to ensure we can receive the optimum prices we can for the immediate future and going into the coming years.
So where has this led our service providers such as the hay and fodder production people?

http://wp.me/p2Rd5Y-eG

Categories: Beef Industry, Cattle station, Darwin live cattle export, Live Exports, Northern Territory. | Tags: , , , , , , , | Leave a comment

In support of Live animal Export.

All of the following statistics have been obtained from

Australian livestock export industry statistical review_2013-14

This report contains information in relation to cattle, sheep and goats dating back to 2008/2009.

I have chartered only a few of the statistics it has correlated.

Cattle exports 13_14_edited-1Chart 1. 2013/2014 Australian live cattle exports.

Cattle types exported 13_14_edited-1Chart 2. 2013/2014 Australian live cattle export types.

Sheep Exports 13_14_edited-1Chart 3. 2013/2014 Australian Live Sheep exports.

Goat Exports 13_14_edited-1

Chart 4. 2013/2014 Australian Live Goat Exports.

Categories: #hadagutful campaign support, Advocacy, Beef Industry, Live Exports | Tags: , , , , , , | Leave a comment

“Come on, give us a hand!”

I thought I’d walk you through todays muster, so I took my notebook and jotted down what happened as I puttered along.

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We muster through the dry season,  that means we capture the cattle from each individual paddock, process them and return them to their paddock.

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We need to muster to remove the young unbranded animals from their mothers, vaccinate all animals and generally manage the herds overall health and quality. We remove the young animals to wean them, allowing the cows to maintain body condition by not feeding an animal that will sap its reserves.  Good body health and condition improves the cows ability to become pregnant again. We remove unwanted bulls, introduce new ones with preferable genetics, we cull animals that we don’t like for body type, fertility or temperament. We vaccinate for Botulism and jump the animals through a dip to control tick. We sort animals into various groups that may need to be placed in other paddocks, ie steers that will be sold the following year are grouped together for easier access to sell.

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Prior to the days muster the four wheeler bikes are prepped and readied, there will be 5 of us on the ground, my husband, myself, our son and teenage daughter and a worker. Today our worker is a German female backpacker who has never worked cattle in her life. She made the comment only the day or so ago that the animals looked nice in real life, that about sums up her experience with cattle, zilch.

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The paddock is a shade over 40 square kilometres shaped into a sort of rectangle with a significant creek system right through its centre. The main creek itself has a number of water holes that are permanent or very nearly permanent with an untold number of small creeks that feed into it. The topography of the paddock is dominated by the creek system being the lowest point and the areas north and south being the highest, with a significant hill region in the south.

Map 2. 1 - 10_edited-1

Figure 1. Diagram of the paddock. Mustering will start from the left and work the cattle to laneways which move around the paddock, to then lead to the processing stock yard at point 11.

The land system is made up of undulating bedded sandstones which tend to have shallow soil, native grasses and soft spinifix. Some areas have moderate tree coverage of  gumtrees and small woody acacias. Moderate meaning that you can drive a four wheeler bike comfortably at a pace of 20 km an hour among the trees without having to smash and crash through scrub and over large rocks. Termite mounds dot the area but they are not covered densely by vegetation, In other words you can see them. You can see some distance of about 300m comfortably and can generally move in a straight line if you need too over that distance  without climbing or descending hills or crossing gullies.

12.08.2014 015_edited-1Figure 2. Good open going for four wheeler riding. The dangerous termite mounds are small and hidden by grass. Most will break at the tops if you run into them but are solid at the base and can easily roll a four wheeler if your wheels ride up onto them

Unfortunately most of the paddock is simply not this accessible and other parts are rocks, gullies, thick scrub and densely covered grass areas. Spear grass makes riding a bike extremely dangerous because you simply can’t see more than a few metres in front of you, other times due to thick small woody trees or the topography is too rugged for bike access. If we can’t move a bike freely across the ground then we haven’t got a hope of chasing cattle across it.

12.08.2014 056_edited-1Figure 3. Speargrass coverage over a black soil area. There is a creek about 1m wide and 1 m deep just before the tree line, you won’t know until your in it. Then if you get across that you can’t get through the scrub.

 

12.08.2014 046_edited-1Figure 4. Part of the creek system, while easy to often get into sometimes you can’t get back out. 

Due to difficulty in moving across the terrain on bikes we hire an experienced helicopter operator. It would be simply impossible to achieve a reasonable muster without helicopters in this area. They may seem expensive to use but operated well they  make cattlework efficient. They catch cattle you would never catch on bikes or horses irrespective of how many people you could afford to have on the ground.

04.06.12 018_edited-1Figure 4. The chopper is hovering over cattle that are only 100m away from us but we can’t even see them.

Honestly the figures we put back in a paddock have no real resemblance to what we will get back out 12 months later.
We had a particularly ferocious wet season downpour that took out the floodgate fencing on both sides of this paddock of the main creek and a number of other smaller creeks that are also along the fences. We know bulls fighting damaged a gate and allowed steers and other animals to enter, as well as the paddocks herd to vacate.
We have no real idea of what calving percentage occurs, survival or mortality of animals born, or how many are killed by wild dogs. Death rates of cows or adult animals who may have died due to injury, disease or natural causes is a guess.

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Between musters we pump water, supply supplement, provide dog control and maintain fences as best we can, we have no contact with the cattle unless we happen to see them coming in for a drink while checking a water.

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The paddock currently has two bores, one in the north west corner, Bull, and another to the east, Tank, both have cattle traps, barbed wire holding yards and lanes which connect them and allow us to walk cattle through scrub with some semblance of control and prevents cattle escaping.
Laneways make walking stock efficient, over the years labour has become increasingly expensive. Years ago 10-12 people once did a muster on horses now 4-5 do it on bikes. Where the 10-12 would have all been extremely experienced and knowledgable of the lay of the land with no communication between them now we have 3  plus the chopper who know what they are doing. Mustering years ago was genuinely  people rounding up cattle on horses now we rely heavily on the chopper to bring the cattle and we sit behind the tailenders. The chopper captures and does 99% of the real rounding up, we keep them together and moving in the right direction.

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The basis of the direction of the cattle mustering will be to start at the furtherest area from the bores and work back to their watering points, they tend to move along pads and to these areas when herded.

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Its isn’t an early start and we’re not expecting a long day.

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Day of Muster.

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6am
• Generally a cooked breakfast, any excuse to have bacon and eggs, but also because you’re never quiet sure when lunch may be.
• Organise water bottles to be carried on the bikes and lunch to be stored in the car with the trailer that will cart one bike.

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7am
• Chopper arrives and the usual chin wag and general plan of attack is agreed on. Our chopper pilot has flown this area for many years and while the basics of the paddock haven’t changed we may have added fences or altered some aspects he needs to know about.
• Chopper refuels and takes off to make a start mustering in the paddock 20km from the house
• We ride our bikes with someone driving the car that towing the trailer. The car carries extra water, tools,fuel, tucker box, lunch and stuff!
• Car and trailer are left at point 6, the bike is unloaded.
• There’s a general discussion on the UHF radio’s of where it would be best to place the bikes to keep the tail enders moving and we go to sit where the pilot wants us. (read that a mostly out of his way for now)

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8am
• Husband, daughter and myself are sitting at point 1
• Son and back packer are waiting at point 2.
• Chopper is starting generally far west (bottom left) and sweeps the paddock in sections heading north east (top right) not unlike a broom sweeping a floor so that in generally everything ends up in the same place. Depending on where he spots cattle will determine where and how he moves. In general the chopper will move back and forth in a large arc progressively working different areas so the cattle are continually walking and moving in the direction towards the water points (3 & 6).
• The importance of a pilot with skill, patience and knowledge can’t be underestimated. They need to pressure the cattle firm enough to make sure they move in the right direction and keep moving,. The pilot also needs to be knowledgeable of how their movement in the air sounds to other animals as they fly about, approaching and moving away to work different mobs. If they push too hard the cattle will trot and soon become stressed and often sulky, they’ll start to hide in the scrub, duck back into gullies. The chopper needs to maintain the cattle at a walking pace. When the cattle walk they are rewarded by the pressure being released by the chopper moving away, they learn to keep walking away from the chopper. They go the wrong way or stop, the angry little bee in the sky will pressure them until they do it right, sometimes just with changing noise through rotar pitch, sometimes by using the air wash downdraught to create dust and disturbance. Sometimes if the scrub allows the pilot will get down to ground level and literally eyeball the animal. The animals learn the chopper means business and generally will walk together in groups to the waters.

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9am
• Chopper has been busily going back and forth
• We’ve done absolutely nothing.
• I sit back, look at the scenery, admire the trees, wonder if I’ll ever figure how the heck I’m going to learn any grass names when I can only remember one or two.
• My husband and I scheme, or he plans building infrastructure and I tell him what it will cost. Our daughter sits expectantly on her new bike, at the ready, bright pink helmet, waiting for the command, hoping today will be the day she’s given the responsibility to round up a few. She listens for the chopper and will tell us exactly where he is, stuffed I can see it.

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9.15am
• A small mob of cattle have been moved into the holding pen at Bull yard (3), we move there with the bikes to take them along the laneway, we’re the tailenders. These cattle are the slower ones who may have some smaller calves, older cows or just cows that are cunningly slow and drag their hooves every chance they get.
• Walking is one of the greatest animal welfare practices a producer can do, it calms cattle, it teaches them to respond to a bike without being paniced. It is an extremely important educational tool for cattle handling.
• I have trouble with a 1st year heifer that is determined to go the wrong way, maybe she last saw her mates at some point behind and has now lost them in the movement of coming in. I have an arugment with her, including physically to try to force her to join the mob. I loose, she beats me to a fence and I curse (I do that a lot). It is a fine line between working hard enough to get the animal back against how much risk you take. At what point do you smash gear, including yourself to get her back. I tried a few times to wheel her (turn her) but it wasn’t enough to bring her back so then I try to physically push her using my bikes bullbar to force her around to the mob, this is done while also dodging trees and termite mounds. Some I can run straight over others I have to go around. I wasn’t good enough to turn her, simple as that, there’ll be another time. She has gone into the paddock which we need to muster next week anyway.

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9.30am
• Cattle, only a handful of about 20 head are in the laneway now moving from Bull yard along the laneway (4) to an intersection of another laneway and then onto Tank (6).
• Our son and backpacker are walking cattle along a fenceline on the eastern side, they sat and waited at point 2. As they move along the fence heading north the chopper will feed them cattle to add to their mob and any others inbetween us and them will be walked directly to tank bore by the chopper’s sweeping motion.
• This lane is only about 3km, its warm, even a bit humid, temperature 25 degrees and very still, with no cloud the sun is feeling good, it’s a really a lovely day to be outside.

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10.30am
• Usually there’s a bit of talk on the UHF radio, as the pilot communicates where cattle are, what or where he needs a bike, it’s very quiet today. That can either mean the cattle are behaving really well and walking where they should or there’s no bloody cattle, now that’s a worry!
• So I spend the next hour worrying about where have the cattle gone and extremely worried they have all disappeared.
• While your mainly looking at the wrong end of a cow walking , you look at the other animals, you look for dog bites on calves, torn ears, try to figure which calf belongs to which cow if they are a little calf and should you take the calf off when drafting if the cow looks like her body condition is low. You look at bulls, are they walking ok, are they damaged in any way, are they behaving, if they are giving you a hard time you remember them to be removed to be sold.

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11am
• Slight breeze has come up, drink of tea would go down well, I chew gum and basically every one bludges my stash of lollies they know I carry when ever on the bikes.
• See that a smoke plume has started up again on our far eastern boundary, an environmental vandal has haphazardly lit a fire and just let it rip. No way to control it way out there and unless it crosses a main river and heads west isn’t of any real concern. Fires are so hard to pinpoint, we use internet to track to some degree but the accuracy of location of hot spots is fairly unreliable. I guess this one is burning hard because it is crossing heavily grassed black soil flats and burning along the edges of significant creek systems with lots of woody growth to fuel it.

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11.30am
• We’re within radio contact of the other bikes they are at the tank bore and have a good mob of cattle, we move our little mob along towards them which is only another couple of kilometres ahead. By this time the animals have become very docile and are content to walk steadily in single file. Daughter has sole responsibility of keeping them walking, a job she takes very seriously. Dad has to cough up and pay for ipod music as way of wages today.
• We are moving at a good steady walking pace.
• We’re starting to look like lounge lizards on our bikes, both legs one side, one with a leg up on the rail, one sits cross legged

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12am
• We put our cattle with the main mob in the tank holding paddock which has a pain in the arse creek through it and lots of small scrub. Knowing we always have trouble moving the cattle towards another laneway gate we decide to not have lunch and move into the next lane, we intend to pull up a little latter at another dinner camp.
• Daughter really needs a ‘snack’ which Dad says is Ok, so we go off and start to move the cattle while she eats.
• The mob of now about the 400 head isn’t compacted together in the yard which is about 2 square kilomtres in size so we have no real control in moving the mob as a whole until we do get them together. The gate we need to get the cattle too is not their usual gate, they use another one to  feed out when leaving the water so they are always reluctant to move to the laneway gate. As the bikes now do the sweeping to move cattle the leaders have turned and coming back, their natural inclination is to head to the trap gate which is opposite to where we need them to go. Some pretty serious back and forth of the bikes is occuring as we work as a team to keep the animals going to where we want and back each other to stop the animals who are turning in the wrong direction going that way.
• Daughter has pulled up for a 3 course meal I think. When called to assist she tells us she can’t remember how to start the new bike, she’s told to wait, we’re busy. She must have figured it out as she turns up in a few minutes, more likely she can hear us zooming around and doesn’t want to miss out on the action.

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12.30pm
• Moving well down another laneway now (7), the backpacker is having an absolute hout of a time. Usually after a chase some either collapse as nervous wrecks or can’t wait to do it again. She has good sense and is doing really well, she’s not afraid of the cattle but not out to destroy the bike either. It can be very hard to know what to tell someone when they have never worked cattle. We give a basic introduction of how to move animals on foot but often you don’t want to flood them with information or circumstances, because they simply need to learn sometimes while doing the job. We give a lot of instructions on the wireless, not unlike training a dog stop, go left, go right. Stay at the back. Our main advice is stay away from fighting bulls and stay with us.

07.08.2014 011Figure 5. Walking cattle along a laneway which  has fences either side about 70m apart. This allows better control of large mobs walking through paddocks and thick scrub.

1pm
• One of the bikes starts to play up, can’t find reverse, hubbie has to fiddle and fix stuff only men seem to be able to fix.
• I go back to tank bore, load my bike, drive car to where cattle are in the lane.

07.08.2014 007_edited-1Figure 6. Bike is loaded. Car carries tucker box with gear in it to make a drink of tea and lunch.

1.30pm
• No sooner we get one bike going and another one throws 7’s. The old Polaris, prior EFI, fuel blockage. We dismantle most of the plastic to get to the carbi, use the ageless if nothing else works tap the carbi and stuff me dead the bloody thing went.
• I’m getting hungry and I don’t run well when caffeine levels drop, hubbie asks do you want lunch at the intersection, ‘about time’, soon he says.

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2pm
• Get to an intersection of laneways. 4 Bulls pick just this time to have an all out blue and push each other over a fence into another paddock, Son and hubbie go through and bring them through a gate with no dramas.
• We yard up into the intersection and do a 90 degree turn into another lane, only a few more kilometres to the final yard.
• We pull up for lunch. I carry tinned meat and bread, lots of biscuits and we boil a billy can for tea.
• The distant fire is really billowing and looks bad, we see our mail plane fly over. They deliver our mail once a week, Every one teases dad about all the stuff he buys on ebay and how many presents he’ll have this week.
• We swap war stories on the one that got away, rocks or close calls and especially how mum seems to have lost another cow.
• We let the cattle meander along at any pace they want while we have lunch, some keep going all the way to the end gate some will sit and rest like us, feed around or just generally have a doze in the sun.
• Its come up really windy and gusty, no doubt fanning the fire.

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3pm
• the laneways are only about 100m wide, we all ride abreast so we move any cattle along as we find them, It is important to keep an eye out for any laying down asleep that can be easily missed in spear grass and look out particularly for any calves. The cattle can’t get out of the laneway so it’s a pretty casual, easy job.
• The animals will tend to follow the pads they make, tracks in which they comotosly follow each other, nose to tail.
• Last gate, we don’t open until the mob are bunched up, we need to move them through efficently to keep them together for when we yard up into the stock yard.

07.08.2014 019_edited-1Figure 7. Cattle in the last laneway heading for the last gate before yarding up.

3.30pm
• Last section of lane, it is rocky and has a few small creeks, it’s rough to ride, we have about  200m of good going clearance from the stockyard gate. We start to get nervous and make sure everyone is in a line across the whole of the lane, the cattle have been fine but yard ups can go to crap very quickly and it only takes a cheeky bull or irate cow to mess the whole thing up. Cattle aren’t good at maths they never seem to figure theres 400 of them and only 5 of you but look out when they do. Trying to turn or even hold a mob that doesn’t want to turn back is not fun. Stay on your bike and make plenty of noise is about the only rule at this point in time as we keep the tailenders moving.
• We don’t open the yard gate until the mob is relatively close, that way the leaders will be filing into the yard and going to get a drink , the idea being the whole mob will flow and we close the gates before many know they are even captured.. If we let them straggle in the leaders will get a drink and then double back out, blocking the way for those trying to get in or even worse a few will realise they are in the stockyard and try to come back out. This causes chaos at the gates and is usually bulls who don’t like to be jammed in too tight with other bulls because of aggressive ones.
• Everyone is in a line across the lane, making noise but not forcing too hard, keeping the mob moving. I have my tin rattle dog I shake the jeepers out of, it drives hubbie nuts but it’s a great bluff for cattle, I can’t use a whip to save myself. I most certainly can’t use a whip and ride a bike at the same time.
• We yard up with no problems and close the gates.
• Its just past 4pm.

It has been a really good day, mainly because it looks like we’ve got a reasonable mob of cattle, no major problems, no one got hurt. The cattle are looking to be in good to fair condition with a few old girls looking a bit skinny. Odd cleanskin bull amongst them but nothing too bad, one in fact that we know gave us a really hard time a year and got away but we have him now.
Its been a good day. I hope you had a nice time,  hey thanks for your help.

Categories: Animal Welfare, Beef Industry, Cattle work, Dry Season, Life on a property, Live Exports, Property operations, Uncategorized | Tags: , , , , , , , , , , | 1 Comment

Agriculture Protection Laws

There has been a significant amount of media debate concerning the possible introduction into Australia of Agriculture protection laws (APL’s), or as opponents refer to, ‘Ag –gag laws’. Those opposed, view these laws in particular as targeting and restrictive of people who choose to undertake actions that most notably involve illegal entry of property to expose alleged animal cruelty.

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Increasingly what is currently happening in Australia is that Animal Activists (AA’s) target a site they feel is not meeting animal welfare standards. They enter a property, sometimes under false pretences, usually as break and enter. Search, record and on occasion cause malicious damage to infrastructure including intentional spread of disease. Animals are then filmed in various situations involving housing, slaughter and treatment. Some filmed in poor visibility at night and by people with flash lights. Obtained film is then distributed as video, film, stills or information as they see fit, when they want and with information that they see as suited to the situation they wish to portray. Most notably footage release may be targeted at a high consumption point of the year but long after the film was made.

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What AA’s think the APL’s will do is completely stop the ability of them to release footage of what they regard as animal cruelty which is basically what the American rulings have done.  I think the US versions are too stringent but I do think adaption could be used in Australia.

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An Australian friend has looked at the US laws extensively and I think has come up with a more relevant version to Australia that doesn’t prevent the use of the footage but certainly makes the AA’s more accountable for their actions in regards to authenticity, accuracy and release of footage. I have added my own take on  disclosure to the owners property that was filmed including ability of owner to refute information.

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Social media has become the court house and  AA’s have proclaimed themselves as judge jury and executioner of the producer in the public arena. Using footage to  incite outrage and reaction from mostly the general public, who in turn are asked to pressure government and law makers to act against the animal property owner by implementation of supposed better animal welfare laws or abolition of the animal use all together. The footage’s usual intention is to incite hate and repulsion and thus detrimentally affect market sales of that properties or related industry animal product. Through repulsion, emotion and often outright mis-information by the AA’s, the industry targeted then suffers as a consequence either through direct loss of income or the problems directly caused by the AA’s.

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It is sometimes many months after the event of a media wave that the facts of the film in regards to what was happening, why, where and who were involved actually comes to light and sometimes, I’m not saying all but definitely sometimes is shown to be intentionally misleading and outright propaganda.

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From the producers point of view a major concern is bio security, but it is also control of information and image and a chance to have a fair say when directly attacked. The right to know when they are being slandered and the right of reply. In my view the APL’s could make it legally equitable in disputes of animal cruelty that the producer at least has a chance to explain their situation and reasoning of what the film depicts at the same time as it is released because it will be illegal to withhold it longer than 48 hours without notification to the owner and authorities.

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Currently it is quiet legal to openly place photographic images advertised as animal cruelty, poor animal welfare, poor animal standards or outright neglect and mis treatment. These images need no details of who, when or where they were taken and many times these aren’t provided even when investigated further by a viewer on social media. The intended purpose of the visual, is to lead the audience to always assume they are viewing Australian animals and think what they see is a fair representation of how Australian animals are treated overall.

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Many images provided by AA’s are undated, without source names, often not even proving that they have been filmed at a site. Usually the recorder is anonymous. Some blatantly promote their business as animal expose and earn money  through their escapades. So the attacks on the producer come from many and varied sources but the initial antagonist, the trespass person or persons generally remain completely anonymous.

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More often than not the animal producer faces intense hostile assault from other AA’s including large organisations most notably on social media as to their business attributes and again the images are used as if that is what the whole of that industry represents. Personal attacks are very common against the producer and their families including children through social media and many sites allow these comments to remain visible as it feeds the hate and outrage. This is how things get so out of hand and beyond control.

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The interesting thing about some of the claims attackers of the producer make is that ‘the consumer has a right to know or they as the consumer have the right to dictate animal husbandry practices’. Ironically most of these people conducting trespass invasions are vegetarian or vegan and don’t actually consume or use the products from the industry they attack, so they aren’t consumers.

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Some AA’s may own or produce livestock for their economic survival, usually not though as many are fundamentally against animal production for food. Many actively work in and solicit donations for animal shelters they are involved with. Most are definitely concerned members of the public but how informed, representative or even knowledgeable of animal welfare practices and their purposes would vary from very informed and experienced in animal care to absolutely not having any idea of animal behaviour or practices at all.

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I am very wary of the phrase ‘social licence’ when used as description of the supposed general public view of animal production. When given a choice based on economics many of the buying public won’t actually pay extra for the improved animal welfare standards that they perceive are required. Instead buying imported products that don’t come even close to Australian welfare standards. Therefore at what point as a producer do I take their social licence prejudices seriously when they don’t practice what they preach when it comes to the act of actually paying at the checkout!

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As a producer we can explain, if people don’t accept that some practices are absolutely necessary, then that’s just the way it is, don’t eat our product. But if people don’t accept our business operations it doesn’t give them the right to invade and destroy our business because they don’t agree with consumption of animals.

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I have no doubt it is only a matter of time before an activist or producer is killed due to a property invasion. At the least massive disease across some animal industries will occur. If some tighter regulations are not put in place soon the AA’s will simply become more brazen and the producers more angry. Something will give.

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The APL’s in the US currently do and could be moulded to suit Australia, not to stifle animal activities but to filter those who have genuine intent animal welfare improvement from those who are simply economic terrorists with criminal malicious intent. APL’s are a possible way to hold AA’s legally accountable by ensuring that if an event of animal cruelty is recorded it is a recognised obligation by the recorder, for that information to be passed to relevant authorities quickly and unedited in a set time frame of 48 hours. With the provision that footage be not allowed on any public media format until at the least handed to authorities and the animal producer targeted allowed first viewing and 24 hours to consider it and mount a defence.

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Once footage is handed to authorities it is then the responsibility of  them to  act in a responsible and legal way. Once viewed by the accused then the AA’s can do what ever they like with their film and if so choosing could splash animal images of alleged cruelty where ever they liked. The point being that the producer has a fair and equitable chance of also instigating their own media commentary on the footage and saying what they think is relevant.

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If  footage is not backed up by a declaration by a real person as the recorder, as named and verified then the footage would be illegal to use on any media at all.

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Let the general public decide who they wish to listen too, but at least allow the opportunity to the public decide to investigate the other side of a story to be able make an informed decision. If the producers view is available then they may just see two sides of the story and not only the one as they are most commonly presented with at the moment.

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Where the American’s differ in their aspect of APL’s is they are saying any footage is never allowed to be publicly aired. I’m, not saying that at all. I don’t think all animal producers are good but then I don’t think all AA’s work with best intentions of improving animal welfare either.

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Under APL’s if an act is deemed as maliciously cruel as opposed to husbandry practice, determined by experts in the field, then the person or people who presented the original unedited footage would not face prosecution under law rulings irrespective if the initial property invasion was normally deemed illegal.

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Importantly those who withhold footage, and promote without handing to authorities including those that support that promotion, should face the full force of the law for their trespass and intentional damages actions. For organisations this should be harsh monetary fines, for individuals with little or no assets this should be restraining orders and jail time.

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If AA’s get it wrong and they make wrongful accusations that have been publically displayed as animal cruelty then they must personally face and be prepared to accept serious remedy consequences payable to the producer they wrongly accused. They have responsibility of duty when entering animal properties and at the moment AA’s rarely acknowledge this, particularly in respect of bio security including ironically animal welfare itself through the stress their actions may cause

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The APL’s are intended to enforce the witnessing of malicious cruelty as an obligation to report the recorded activity, so that animal cruelty can be stopped for the purpose of improving animal welfare. Not for the footage to be used for the gain of an Animal activists ego and advertising of campaigns for financial donation collection.
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Another aspect of the legislation is that groups opposed to animal farming or other aspects of agriculture can’t impose legislation or regulations that are not scientifically based on fact and significant research. This is the right to conduct Agriculture it is about protecting agriculture as the right to conduct animal breeding, raising and use of animals as acknowledged in any legitimate business.

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APL’s as could be adapted to Australian laws are not intended to stop genuine animal cruelty exposes or provide coverage to poorly operated animal producers they are meant to make the AA’s more accountable. If AA’s wants to make serious accusations of malicious cruelty to animals then they better be sure they are accurate and genuine in their revelations of it and not as what is happening at the moment where many are just economic terrorists on ego trips.

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Agricultural protection laws are about recognition of responsibility of animal activists and fairness for production owners including the health safety of their animals they are not about hiding practices and diminishing animal welfare.

Categories: Advocacy, Agriculture laws, Animal Welfare, Animals Australia, Beef Industry, Cattle work, Indonesian abattoirs, Legislation, Live Exports, Politicians, Property operations, Sheep industry | Tags: , , , , , , , , , , , , , , , | 4 Comments

AACo Beef Processing facility.

In late March of this year I had the chance to visit the site of the new abattoir being constructed by Australian Agriculture Company (AACo) 50 km south of Darwin, at Livingstone, Northern Territory. By my reckoning the only brand new abattoir built-in Australia from scratch for at least the last 60 years.

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The site when I visited represented a crazy meccano set of construction, with lots of big boy toys, plenty of activity, people everywhere and skeleton shapes of the large buildings which will make up the process and facilities of the plant.

 

B.Cooper. 28.03.14_edited-2

Source – Photo AACo. Article – ‘AACo abattoir set for spring start’ The Land. 28/03/2014
I have labelled some of the infrastructure in place in March 2014. Animals will enter the facility at the slaughter point to be processed as they move up the photograph. I have the ‘packing’ label position slightly wrong, it should be to the right. Storage is the Freezer areas.

Once the main buildings are finished much of the internal work has been pre-fabricated at other sites, it will be transported in and installed. Stock yards and cattle holding facilities are yet to be built and the actual slaughter box site was only just begun. Completion of construction and beginning of processing of cattle is planned for September 2014.

 

14.04.14 089_edited-1Source. Jo Bloomfield. March 2014.
Where the bobcat is working is where the slaughter box will be built with its surrounding building yet to be constructed. The building in the centre is where the main processing of the carcasses will occur.

Obviously AACo and the Sunbuild construction people know that pastoralists are a bunch of sticky beaks and veritable excited children around new sheds. We do tend to go all gooey eyed at steel bundles, shiny new engines and large machinery. We were allowed access on very strict OH & S requirements. Tightly corralled behind flimsy hazard tape like a too small holding pen. More than once I heard the promise of future tours once the plant is functioning, the interest in this facility is very high and AACo are keen to have producer involvement and observation of the processing of  cattle occur when the plant is in operation.

 

14.04.14 100_edited-1
Source Jo Bloomfield March 2014

The AAco beef processing facility will have a co-generation plant, powered by gas that will supply the plants electricity needs.

To give a brief history of the AACo organisation, it was established in 1824, not only is it one of Australia’s oldest Agricultural companies but also now likely the biggest. AACo own about 682,000 head of cattle, about 2% of Australia’s whole current cattle herd. Their operations include extensive breeding operations throughout the NT and QLD covering 7.2M hectares (1% of Australia’s whole landmass). They sold approximately 250,000 cattle in the 2011/12 financial year (ending March) and currently employ over 450 people.

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Utilising a variety of cattle breeds AACo target a large cross-section of markets, grain-fed production, grass-fed and the live export markets.

 

AAco cattle sales #2_edited-1Source – AAco Financials ending 2012.
Types of cattle markets AACo supply.

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Horizontally integrated, meaning they have similar properties or facilities at different sites that perform similar tasks, such as animal breeding and raising happens on 23 cattle stations. They also operate procedures vertically , meaning AACo control various stages of the supply chain from production of fodder, stud animals and the retail of a meat product from another 4 farms and 3 different feedlots in conjunction with the stations.  Soon they will have their own abattoir for processing animals from their north Australia operations once the Livingstone abattoir is finished to further enhance their scalability and asset utilisation. Currently AACo have a number of branded beef products which are processed at plants in mainly QLD which are operated by rivals in the meat industry.

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The AACo beef processing facility proposal was announced to the public in early 2010 with site location not then decided on. Initially the plant was expected to cost $47.5M (Including Government contribution of $12.5M) and capable of processing 140,000 head with the intention always to operate 12 months of the year and not seasonally as most abattoirs in the north were forced previously to do. Initial plans were it was to be operating by mid 2013.

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The plant has never been intended as a replacement to live export targeted animals. The majority of animals to be processed will originate from AACo properties, cull cows and bulls and thus not animals they have bought in but already own. This enhances their own supply chain capabilities and is also a very different aspect of previous NT abattoir operations in that operations at Katherine, Batchelor , Tennant Creek and Alice Springs  needed to purchase all stock to supply their processing requirements.

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By late 2010 early 2011 AACo had raised capital from institutional investors with hopes of raising more to construct the facility. Overseas investors had been sought with the intention that AACo never relinquish majority ownership equity of more than 50%.

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The live export ban of 2011 resulted in a reduction of over $50M of the AACo asset base over the next 2 years, including $11m immediately attributable to the loss of markets and the ban implementation. This severely hampered AACo’s efforts to fund the abattoir. The suspension and subsequent devaluation of properties was negatively compounded due to loss of direct cattle income. This caused some skeptics of the project to predict the abattoir plan at Livingstone would be abandoned, they were wrong!

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In mid 2012 AACo announced they had purchased a site for the abattoir at Livingstone, the budget now estimated at a finished operational cost of $90M with a capacity increase to process 185,000 head and depending on operational performance further development ability to 225,000. AACo making the decision to increase the facility throughput size to strategically capitalise on the locations proximity to Asia and demand for meat, supported by supply of animals in the north of NT and WA of an approximate herd of 2M head.

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AACo cattle sales suffered a drop of 30% in gross values  per head for animals sold from a June 2012, over a 3 month period to a comparative period in 2013. This was pretty much in line with what was happening all over Australia. Cattle markets had generally plummeted due to oversupply of animals because of 2 main factors. The flow on effects of the Live export ban from 2011 and drought. Like most other Australian producers they had also been held hostage to the domestic market and its volatility. Drought and the ongoing effects of the ban exasperated the natural climatic problems, as cattle held from 2011 period which should have gone to live export as smaller feeder animals were now hitting the domestics processing facilities as heavier and older animals. AACo cattle held back 185,000 of their own animals from sale in 2011/12 to be sold in 2013.

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The benefit of the Darwin abattoir will be in its ability to process cull animals that aren’t worth a great deal of money in comparison to steers or other preferred younger animals yet are expensive to sell due to high freight costs and lower yields when processed. Due to costs of sale these animals tend to remain on property, eat grass and yet do nothing, costing money to maintain they actually give no return. For producers like myself located several thousand kilometres from any current processor, the costs of transport could easily be more than the realised sale value of the animal. Add to that market and quotation variances, we may transport cattle without a known set price or even gauranteed recovery of costs of sale and transport once the animal is landed at the destination.

 

distance to abs.This is a very rough indication of the distances our cattle would have to travel by road to specific abattoirs located in the other states. It doesn’t take into account extra time or expense for spelling, unloading, weight loss, costs or losses.

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Ability to cull non-productive females from our herd and removal of unwanted others could be of significant benefit in improving the reproductive efficiency and return on asset of our herds simply by their removal and some realisation of value. Their removal would allow fodder for reproductive and earning capacity animals.

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The real test of the AACo abattoir will be, can and will they match the processor prices in eastern states to attract the suppliers to make it profitabile to process the animals closer to where they are bred and raised. Due to freight cost savings I suspect some processors are very concerned at AACo’s ability to do exactly that. Keep in mind a smaller but still significant facility is being constructed in WA near Broome with similar views of processing non-export orientated cattle. This would affect current processors animal supply chains which they have previously comfortably sourced from literally across Australia. I also suspect that when AACo begins to purchase volumes of cull animals located in the WA and NT areas this may help to bump up the prices offered to producers in other states for their cull animals as demand for them increases. Well I hope so!

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In the future if AACo choose to develop the plant further to a production line processing heavier prime cattle they will need to invest a further $30M+ for cold boning processes. Domestic and live export heavy markets will be what they will be in direct competition against and required to beat to ensure animal supply. Producers can’t be expected to give their cattle away simply because a processor is located in Australia but with the vast improvement in herd quality and improved control now, compared to many years ago I think many producers will be supportive of the plant.

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Lack of supply in northern abattoirs declined in past years as the processors wouldn’t pay the prices of which live export consitently did. The processing facility operations were not competitive due to high costs of operation and transport of product of meat. Many believe and mislead others that live export closed abattoirs across north Australia because it created competition for the product of animals. What many people don’t realise is that some processors were only paying producers $50-$100 for a beast prior to Live export cattle development, that was not sustainable for producers. There are many reasons abattoirs closed across Australia to the present day, massive rationalisation in the early 80’s (costing 10,500 jobs by 1981)1, sheep wool crash, beef crash, meat substitution scandals, illegal, corrupt and poor management, drought, inability to meet hygiene standards, lack of markets, costs of production. To name only a few these  were significant factors that sometimes singularly sometimes combined caused abattoir closures throughout Australia. ( I will get to that blog one day!) Bloody hell I nearly forgot the unions, in my opinion they caused more closures than any other individual factor!

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As time marched on to the current period of 2014, government funding for the Darwin abattoir was becoming increasingly unlikely, to eventually only be for $2.5M for alignment of road entry at the site and improvement of the crossing access of the railway line that was required for access from the Stuart Highway. At one stage $9M had been promised but it never eventuated.

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Very raw figures of a plant with a capacity to kill 185,000 head requires over 1,200 full 6 deck road trains just to deliver the animals. Not taking into account transport of other input goods and services and then transport out of full containers with animal product. Include also the general traffic of 350 workers and their vehicles most days of the week.
Some port improvements for container handling and transfer of containers between ships, trucks and the wharf have occurred with replacement of a crane and other infrastructure.

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AACo had allocated funding for the finalisation of the abattoir beyond the initial stages of construction but then undertook a further capital raising venture, deciding in late 2013 to sell some of its own assets as well as to raise fresh equity through capital share offers. This had a two fold effect it assisted AACo to reduce overall company debt and to secure funding for the purchase of two other properties in the NT,  Labelle Downs and Welltree station. These properties are located approximately 180km from the abattoir and will allow holding and transfer of cattle through wetter periods of the year when direct access from other producers or properties would not be able due to the rainy season, thus enabling better continuity of all year supply of animals.

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Supply and consistency of supply of animals in north Australia was the thorn in the side of all previous abattoirs in existence in the north, the dry season would allow supply of cattle for 5-6 months of the year and then depending on the wet possibly no cattle for long periods due to mustering issues, road access and the general infrastructure of the times.

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Present construction of the Livingstone abattoir is being undertaken by an Australian based company Sunbuild, utilising equipment and expertise from New Zealand and Denmark. The refrigeration and food processing equipment alone is worth $21.5M.

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Employment requirements are now forecast to be about 350 people, with the current expectations to begin operations in September 2014 on a five day processing week, for 12 months of the year.

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AACo have a number of employment alternatives they’re preparing to try

  • Locals, including aboriginal. With the location of the site being about an hour out of Darwin AACo have received significant inquiry from potential employees who wish to avoid the traveling to work in the city area and work closer to their home bases.
  • Shared work to encourage employment of people with school children
  • Sentence to job programs for low security prisoners and
  • 457 visas employing overseas people

AACo are currently calling for employment applications now for pre training and preparation for when the site is operational.

AACo Employment information.

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Initially AACo will process only their own animals to make sure operations and protocols are fully working, it is hoped they will begin to process other people’s cattle towards the end of 2014.

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Animals sourced by AACo will be mostly un-suitable for the live export markets. Live export has specific parameters of breed types, horn, pregnancy and injury protocol that mean many animals perfectly healthy to travel and slaughter aren’t allowed to be exported. For instance in our circumstance we have a massive wild dog problem in which up to 6-8% of our weaners show light to major damage of their hides, ears and muscle through dog attacks. Some of these injuries may be well healed but leave large unsightly indentations and are generally culled from live export lines.

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Another problem here is missing tails, commonly called ‘tail rot’ the cause isn’t fully known but is thought to be one of bacterial, fungal or a parasite that enters the tail mainly due to an injury, especially after a dog attack. It generally stops in the tail and often heals but leaves the animal with a stumpy tail about 10cm long. Live export will deduct the value of an animal by atleast 10c per kg of the whole beast if the tail is missing. These animals may be perfectly fine otherwise and would be suitable candidates for the abattoir.
Bulls, as silly as it sounds often stand on their own pisals, or others do when they are sitting and will permanently damage it, making them worthless for reproduction, they must be culled immediately. Cull cows that may not be right breed type, or requirements of the boats may be suitable to sell to AACo.

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It may develope that supplying cattle to AACo may be less troublesome to producers, especially small ones like my family than supplying the boats, due to bookings and ship space and lots of issues of stock handling. It must be economically viable to AACo and those they buy from, Only time will tell how it all pans out.

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Animals delivered for slaughter are generally expected to be processed within 24 hours of arrival, All animals will be pre-slaughter electrically stunned with the time period from stunning to the meat and products entering freezers to be 45 minutes. Once in the freezers the cartons will be reduced to a minus 15 degrees over a 24 hour period. Red and Green offal and other body parts including the hide will be processed in various areas depending on market requirements. By products such as blood will also be collected for rendering.

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There is absolutely no doubt AACo have had their skeptics right from the start of building this abattoir, many thinking they wouldn’t even get this far. I sincerely hope they do succeed in this venture and have it develop into a profitable long term operation. I definitely hope that I’m able to sell them cattle, but the real proof will be, can they pay a competitive price to producers to enable the continuity of supply. They will face tough competition from other processors already established in other states and the live export markets.

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I hope the beef processing facility at Livingstone is a great success and I wish AACo the best of luck, for not only having the guts to take this on but the vision to plan it and fortitude to stay with it.

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As a final note I have written this article with the intention that it explains facts and real happenings in respect to the beef cattle industry in north Australia from only my perspective. I receive no payment or commission or are otherwise employed by AACo or any other party, I have never been employed by AACo. The only vested interest I have in this abattoir is I hope to sell cattle to it, those being animals not suited to live export and mainly cull cows and bulls. Realistically the small number of animals I could sell to it will have minimal impact on their operations but could be of substantial benefit to my own.

Further information on the timeline of events of the AACO beef processing facility are here – Livingstone abattoir (NT)

Source

  1. John Kerin, Parlimentary website Hansard 20.08.1981.
Categories: Advocacy, Animal Welfare, Australian abattoirs, Beef Industry, Live Exports, Livingstone (Darwin) abattoir, Northern Territory., Property operations, Uncategorized | Tags: , , , , , , , , , , , , , | Leave a comment

I owe an apology to Animals Australia.

I made a comment on the following newspaper article

‘Vet threatened, say activists’ Stock and Land 07.04.2014

My comment was
“When do any of Animals Australia’s so called informants ever appear before DAFF to back up their so called evidence. Feb 2012 Indo Footage was proven false. Giles abattoir woman never supported her own evidence, Gaza tapes were sourced from internet via you tube stating they used Animals Australia supplied camera’s”

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I made  another comment following others asking for my evidence in which I arrogantly stated  ‘I never say what I can’t back up’.

I owe an apology to Animals Australia regarding the abattoir as going back over my notes I don’t have direct evidence to back up that Sarah Lynch didn’t actually front the Primesafe investigation. For that accusation I do apologise.

I am extremely weary of any animal cruelty film clips that have the ability to be used as evidence when undated, unverified and usually unsupported by the person who was actually doing the filming. I am not denying there hasn’t been terrible cruelty filmed and many are Australian animals shown but I don’t believe all the footage presented are always supplied unedited to authorities, are all Australian animals or even recent incidences. Not to mention circumstances that surround the incidences of filming to explain people and animal actions.

In regards to ESCAS it is not a kangaroo court and Animals Australia are not judge, prosecuter and jury. They are an animal liberation group who are intent on stoppage of all animal livestock production systems.

What I had based my opinion on regarding the Trafalgar abattoir (Victoria) was that the prosecution of cruelty had failed against the owners due to charges dropped with no explanation of the reasons to the owners. Workers had been charged with cruelty. My recall was that Animals Australia presented the evidence to primesafe not Sarah Lynch, an exert of the article I had mis-interpreted is as follows.

Piggy in middle_edited-1Source – ‘Piggy in the middle’ The Australian 22.03.12

In regards to The West Java Indonesian footage in early 2013 – the informants who presented this information did not appear before the then DAFF investigation at all. This was an investigation that occured following claims of cruelty at an Indonesian abattoir in which the informant supplied information to Animals Australia which was used to pursue a complaint against the exporters for breach of ESCAS.
The basis of the evidence revolved around supply of eartags by Animals Australia that allegedly proved the animals time of death, they didn’t. The exporter proved the eartag was from an animal slaughtered some weeks prior to the informants film event taking place.

The DAFF report Allegations of breach of Exporter Suppy Chain Assurance system is linked here West Java Feb 2013.

The annex 4 regarding the eartag incident is here annex4-investigation-report-ile-abattoir4

Failure of informants to appear before DAFF is noted on page 2

Indo - non appearance of informant_edited-1Source – DAFF West Java Feb 2013

Again mention was made that informants were not prepared to support their information supplied to Animals Australia on page 3

Indo footage #2_edited-1Yet Animals Australia used unsubstantiated person or persons and ‘so called’ evidence that they simply took on face value from an informant that was actually proved wrong.

Indo footage_edited-1Source – Annex 4, Page 7

People wonder why DAFF take so long to undergo investigations, I would assume much of their time is spent just trying to verify who and what is being filmed.

In a Kuwait 2012 DAFF report Animals Australia supplied still photos and two film footages, one 45 seconds long the other 42 seconds. Neither film could identify the sheep, infact an exporter claimed they weren’t even Australian Sheep, highly likely Awassi. Another exporter had already self notified of a breach of ESCAS having reclaimed lost sheep and corrected the problem. Animals Australia vigilantly exposes are not helping animal welfare they are slowing it down because they are wasting valuable time and resources that could be better spent on direct positive animal welfare outcomes.

It is well known most of the Gaza cattle footage presented December 2013 was from youtubes. Considering anyone can do a youtube and anyone can edit and modify I would have liked to have seen a lot more verification of where and when these videos were filmed. Animals Australia was credited by a supporter as having supplied some of the phones for use to film animals being treated cruelly, the following screen shot I took in December 2013. I believe it has now been removed from the following link Facebook link to Gaza footage

#4 23.12.13_edited-1Source – Screen shot of information attached to Gaza files Animals Australia footage taken December 2013.

Again I apologise for not having the evidence to back up for all that I had originally stated. But reading the DAFF report of the Egyptian vet that is referred to the original Stock and Land article and his questionable conflict of business interests. The forgotten irony is that Animals Australia actually supported the closed loop system in Egypt that was in place prior to ESCAS. Lyn White even claims Animals Australia proposed it in her appearance before the senate inquiry of live export welfare standards in August 2011.

 

Categories: AA Financials, Advocacy, Animal Australia investigations, Animal Welfare, Animals Australia, Beef Industry, Indonesian abattoirs, Live Exports, Media | Tags: , , , , , , , , , | Leave a comment

Who is actually going to pay?

Various reports have been conducted over the years that have considered the economic impact were live exports of Australian animals stopped. Some reports have attempted to put a price on the financial cost of stopping live export, and predict ongoing returns if live export animals were supplied to Australian processors instead. I would like to discuss the economic expectations of some of these views. I am purely looking at economics, not animal welfare in this article.

In 2006 MLA released a report1 that considered the value and ramifications of closure of the live animal export industry stating that

the prosperity of Australian sheep and cattle producers is linked to the live export trade as domestic prices are underpinned by the trade1(Pg ii).

Forecasting a drop in both sheep and cattle prices of up to 18% and 7% respectively if live export was stopped 1(Pg 28/29). That irrespective of any gains made in beef export, the national beef industry would decline by $330M or 5% annually for every following year due to no live export trade1(Pg28)

Before the peak of the 2009 cattle export period of slightly less than 1M head, MLA (20072 ) forecast a 10 year direct loss of income if the trade was halted. Across Australian sheep and cattle industries (including dairy) a direct loss of income over 10 years was estimated at $2.2B. The effects would continue to be significant after the initial 10 years of closure. It forecast a farm-gate price drop of 59c/kg for the Northern Territory alone, due mainly to lack of processing facilities in the north and increased costs in freight, a point the MLA 2006 report also raised citing freight increases of as much as 40c/kg1(Pg 28).

From a personal perspective, owing to effects of  the ban in 2011, and then subsequent market loss the following 18 months we personally realised a direct loss of income of $239 per head ($0.70/kg loss directly plus extra cost in freight) for every steer that was suitable as a boat animal as a young animal but eventually sold into the Australian domestic market due to being too heavy or unable to gain market access in the period of 2011/2012 and part way into 2013. This doesn’t include the cost of keeping an animal for another 18 months on property and effect on overheads and finances due to loss of income. In total a loss of approximately nearly $300 per beast. We are a small property, the effect on others could have been much greater.

For WA northern cattle producers, a more dire forecast is predicted if live export ceased, estimating price drop of $1.60 down to $1.10 plus additional costs of 21c/kg in costs due to cartage2(Pg 6).

WA sent 23% of the cattle exported through their ports in 2013 of 276,450 head3. Historically WA has always been a significant volume exporter of approximately 70-80%  Australian sheep exports.

WA sheep producers prices are expected to plummet by 70-80% with a live export ban, remember this report was done nearly 7 years ago when Australia was approximately exporting 4M head of sheep a year3. In 2013 Australia sent just under 2M head of sheep. WA’s market share of live sheep exports in 2013 was 83%9

WA sheep producers experienced catastrophic market price freefall when the Saudi Arabian market had closed and caused an immediate reduction in WA sheep local prices of 50%1(Pg 23), In 20054. The WA saleyard sheep indicator in March 2013 was 120c/kg cwt, down from 331c/kg cwt 12 months previously. The OTH sheep (18-24kg) was 187c/kg in March 2013 but had been 220c/kg 12 months prior10

Friends who supplied live export sheep in WA have told me ram prices went from $100 per head export prices pre 2012, ESCAS implementation to $40 in Australia (following ESCAS implementation and loss of some markets) with many animals not being able to be sold at all. Others who solely supplied live export with Damaras, purposely bred for live export were unable to sell any into Australian processors as they were simply not desired animal type.

The Victorian dairy industry, if live export was stopped would affect their entire sectors farm profitability negatively by 20%2. Many enterprises sometimes up to 250 producers may contribute to a single shipment of export animals. 12 month old dairy heifer prices were estimated to drop in price from the then $1000 head to $500 and surplus heifers would go from $500 to $100 if the dairy live export industry shut down. Again keep in mind this report was written nearly 7 years ago. When dairy exports were nearly half of what they were in 2013.

In my opinion it could be reasonably expected some live export animals could be picked up by Australian processing. Surely though the realisation is that 100% transferability of live export sheep and cattle to onshore meat processing can not and will not happen. In regards to sheep the “current view is that such a subsititution will not occur easily”5(Pg 13).

As to what percentage Australian plants would willingly process animals  and to what capacity has simply been assumed at 100%. If the investment funding was available, abattoirs built, animals fed to ensure all year supply and availability, markets assured and costs of production not prohibitive, labour assured including unions irratic demands kept at bay and costs of production controlled. Would the Australian processes be able to or even want to maintain 100% capacity? Interestingly 100% operating capacity is actually not optimum for many abattoirs, about 80 to 85% is. If it was feasible to do don’t people think we would be doing it now? Live export in the north developed because the processing facilities we did have, were unable to stay competitive due to costs of operation and freight. Australian processing currently costs nearly twice as much as overseas processors, competititiveness is becoming a big problem on a global scale for all Australian manufacturing industries.

Of course the fundamental question underpinning a complete stoppage of live export to domestic processing, is would it be profitable? For the producer, processor and retailers. Ultimately in the long term most reports concur that for the producer, the base of the whole livestock production supply, it will not be profitable without live export. Why would processors pay more than they have to for a product of which there is no other competition for. Again the producer cops the raw end of the deal.

In 2009 ACIL Tasman, by virtue of RSPCA, conducted a study on the closure of the WA live export sheep industry, their conclusion, was that closure of live export for WA would “require adjustments” but were “not extensive”5. Ironically  they had the figures so completely wrong and undervalued that Livecorp instigated a review of the ACIL report in 20107. Livecorp claimed gross miscalculations were made by ACIL of nearly double in most cases of losses directly attributable to producers that would occur if live export was stopped. ACIL had based its ‘No live export available scenario’ on the assumption that market prices would remain unchanged without live export as a market alternative to producers. Every single other report even those supported by WSPA realise that returns to producers will lessen without live export. Yet RSPCA and others supporting a ban continue to present the ACIL 2009 report as fundamentally sound! Of course as the impact will be mainly worn by producers maybe it is of no concern to them of $60M losses here and there.

In  2012 WSPA stepped up to the plate, employing ACIL also, they carried out a feasibility study of establishment of an abattoir in north Australia, this study WSPA  regularly quote saying that producers will magically make 245%6 in increased profit by being able to sell heavier cattle to a newly established abattoir.

From a producers point of view this report indicated the abattoir required prime animals at very cheap prices to be paid for at less than cost of production, hot boned and put into non-premium markets in direct competition with already existing meat suppliers and assumed new market access will occur for the outgoing meat produced. A lot of ‘ifs’ in that equation on how the abattoir would be feasible itself and highly likely it wouldn’t!
I really do wonder sometimes at what point do people think producers should gift their animals, it seems that we are expected to do it an awful lot and yet magically to operate with no income! Of course assuming that they want livestock production to actually continue.

Unfortunately as with most things there’s a few points WSPA never point out in their propaganga phamplets, though very clearly stated by ACIL in the opening paragraphs of the 2012 report. The requirement of significant ongoing government investment if more processing facilities are to be established. Personally I think our government is currently broke, there is no slush fund for any industry at the present time.

ACIL have obviously realised the importance of producer viability to maintain live export because the 2012 report very clearly states that processing would depend on only a portion, they suggest half of what is currently sent to live export. The point being not to stop live export completely, yet process in the vicinity of 400,000 head. While I don’t agree with the basis of the views used in this report, it at least acknowledges the fact that live export is an important support basis for price and herd productivity.

Consider this AAco have battled for over 5 years now to eventually get an abattoir that will process 100,000 head initially, mostly its own cattle and cull numbers  that were already being processed somewhere else. It is not intended as a facility to process animals intended for live export, it is a vertically integrated system mainly intended for AAco’s own stock. The Facility is costing around $94M, of which they received no direct government assistance yet have repeatedly lobbied for. It will not process the 600,000 head turnoff currently directed to live export, infact it will process some numbers that are already directed at other abattoirs. I would dearly love to see the Livingstone abattoir operating profitably as it would be a welcome outlet for some of our own cull animals. I have not met a producer who doesn’t want this abattoir to succeed. In my opinion it had to be built near Darwin, not for cattle supply or market access but  for labour supply and employee demands now of facilities and amenities. A smaller facility in WA is also being currently built, again repeated requests for government funding have not been forthcoming, the majority of supply of cattle intended to come from the owners own herds.

ACIL’s 2012 report made some incredible assumptions concerning the 245% increased profitability

  1. Animals would reach 400kg live weight by 3 years of age – which is highly unlikely in north Australia.
  2. All north Australian properties have finishing capacity of animals to heavy weights – but they don’t!
  3. Properties would all be able to produce heavy cattle from every 5 out of 8 years – possible yes, but when thought of in the context of ensuring guarantee of average annual rainfall for 5 years, I’m not so sure!
  4. Sale price to abattoirs was based on $1.45 paid live weight delivery. A very low figure that I suspect wouldn’t even cover production costs of the closest supplier of animals.
  5. No mention was made of impact of currently working abattoirs as it was assumed a new abattoir would process 100,000 and the other 300,000 would simply go to other facilities. Therefore cost of freight and producers cost of production time in holding animals longer wasn’t considered when the plants were at full capacity and kill space not available. Seasonal variability of supply of animals to Australian abattoirs has been a major problem since the time the first slaughterhouse was established when the first settlers arrived.
  6. Alteration to herd size on property was only minimally altered for allowance of carrying sale animals rather than breeders. To me this is the biggest impact on property cost and operations and is fundamental to economic viability. If your property is fully stocked the carrying ability of sale to production animals is of utmost significance.

Of course a number of new processing facilities would be lovely in the perfect world but then again in the perfect world money would grow on trees. Australia simply doesn’t have the consistency of seasons to ensure continuity of supply of heavy animals suitable for slaughter. That is why Live export is so well suited to northern properties operations,  we breed quality cattle, but we don’t need to send them fully grown and fat. Other countries do the feedlot process, we breed they feed. For Australian processing we have to send them heavy for the processors to have yield of carcase in comparison to cost of processing. Small animals cost just as much to process yet yield substantially less meat, they are less profitable to process.

While it would be nice to process another 400,000 cattle in north Australia, surely others can see that it is not financially achievable. We must have the competition of live export to ensure some form of market price parity for the producer. Send us broke we will take a lot of other service industries, employees and businesses with us, including eventually some processors.

Is the Australian producer expected to give their cattle away to keep up supply to abattoirs to keep them in business while we go broke, it simply doesn’t work that way!

If the financial viability of producers is undermined then we simply go out of business or for those who can afford to diversify from livestock will do so. Stopping live export will undermine the national herds as producers stop production or lower it and this will ultimately affect processor numbers which will decline their supply of animals more than with live export available. A point only realised in one report5 and I’m surprised isn’t given more thorough consideration.

The most recent report I have found is another sponsored by WSPA. This one mainly focus’s on WA and phasing out of the sheep live export trade. Released in March 2013 this report is written by a economic analyst and uses these curious equations to consider prices in NSW sheep markets in comparison to WA and Comparing live export of sheep to sheep processed in WA determine that

“there is no support for the connection that the live sheep export trade somehow underwrites domestic sheep prices”8.

Equation_edited-1Equation_edited-2Source – ‘Economic impact of phasing out of the live sheep export trade’ A. Davey. March 2013. Appendix 2.

I must say this report is the oddest, most contradictory piece of rubbish I have seen for a long time. The very next paragraph following that profound statement then states a premium price of 57c per kg which is approximately $28 per head is received by farmers selling to the live export trade. 3 or 4 paragraphs after that it states that

“cessation of the live export trade would see sheep farmers selling heavy wethers lose the premium they currently receive at sale yard auctions when they sell to live sheep exporters. On this basis, these sheep farmers would be materially worse off”(Pg vii).

Yet the author feels that live export doesn’t underpin the market prices. Very odd and very wrong!

Sheep producers in WA have communicated quiet clearly the collapse of their ram prices and older sheep. Why on earth did this 2013 report so stupidly say that there is enough processing capacity in WA to process the entire WA current live export supplies when the sheep supplied to LE are in no way similar to type or age to what the processors actually want. It makes the arrogant assumption that to ensure all year round supply of animals to the processors that producers could and would wear all costs of feeding while waiting for kill space availability. At 50c per day cost to feed a sheep at what point do others expect producers to not even cover their own production costs but then incur further costs to appease the processors to keep up supply?

There is absolutely no doubt that Live export offers stability, income and confidence for investment in the beef industry as a whole, it does contribute significantly to the economy. Those who say it doesn’t aren’t affected directly by it and for those who believe we are ‘insignificant’ I can assure you stopping live export will destroy many good businesses. Live export production underpins not only the domestic cattle and sheep prices but the entire herd populations of both cattle and sheep. If you want to see a serious demise of the entire Australian livestock industries then support a ban. I hope I don’t have to write an article 3-4 years after a ban and ‘say I told you so, you really should be careful what you wish for”. Then again those who are pushing for a ban are not paying the economic price for it are they?  and they aren’t really pushing to improve animal welfare just animal liberation. Ironically I don’t think most of them give a damn anyway about the people a ban would affect, welcome to the more compassionate world.



Other reports of interest though not referred to in this post.
nwq-abattoir-opportunities

Investment opportunity – Northern outback QLD abattoir – DAFF. Feb 2012

Sources.

1 Hassalllive-expor-2006[1]

‘The Live export industry – Value, Outlook and Contribution to the economy’ MLA. Hassall & Associates. June 2006. – project code LIVE 314

2 Regional_Value_of_Livestock_Exports

‘The Live export industry – Assessing the value of the livestock export industry to Regional Australia’ MLA Clarke et al. June 2007 – project code LIVE 326

3 Australian livestock export trade. N Austin 2011.

4 2012AC Nath CP

‘Impact on Western Australia’s shep supply chain of the termination of live sheep exports’ Nath at el. 2012

5 ACIL Tasman 2009 – The value of live sheep exports from Western Australia
‘The Value of the live sheep exports from Western Australia’ ACIL Tasman, M. Barber 2009

6 ACIL Tasman 2012 – Economic analysis of live cattle exports

‘An economic analysis of the live exportation of cattle from northern Australia’ ACIL Tasman, M. Barber 2012

7 Zeitsch_Value of WA Live Sheep Exports_Final Report_9 February 2010[1]

‘Review of the ACIL Tasman study into the value of live sheep exports from Western Australia’ J. Zeitsch. 2010.

8 sapere report on live sheep

‘Economic impact of phasing out the live sheep export trade’ A. Davey. March 2013

9. Australian livestock export industry statistical review 2013.

10. Personal communication of sheep prices.

Categories: Animals Australia, Australian abattoirs, Beef Industry, Katherine, Live Exports, Northern Territory., Politicians, Uncategorized | Tags: , , , , , , , , , , , , , | Leave a comment

‘WAKE UP’ Wilkie

Mr Wilkie has been quoted in this article as of 21st June 2014
http://www.themercury.com.au/news/opinion/you-cant-keep-hiding-the-ugly-truth/story-fnj4f64i-1226961768642

My comment I have made on that article is fairly self explanatory.

Well there’ s your reason right there you don’t bloody well listen. I was also at that meeting and I told you LE didn’t cannibilise the meat processing sector remember the map I showed you with over 10 abattoirs on it in the NT and across the north of Australia. I told you why they closed, costs and ending of BTEC, Katherine was only paying $50 a head, freight killed it when it couldn’t get cargo of its product to Darwin at its previous 5c/kg and then went to 40c/kg to get to Brisbane. The introduction of Ausmeat standards shut down the Korean markets. You didn’t bloody listen. Now Mr Wilkie your saying cattle exporters are responsible for sheep and visa versa, while we may support each others industries it doesn’t mean they all have the same issues and problems but your speaking in generalisations and assumptions, again absolute rubbish.

You say things are worse – HOW! Indonesia now stunning 90%, you were told this you didn’t listen! Vietnam now building feedlots only for Australian cattle all to be stunned – you were told this have your forgotten. Regulations are not ignored they are strictly adhered to with exporters self reporting. You told us you were extremely worried about the monopoly of the Woolworths / Coles now your saying they are paying more. Now your lying! I kept notes of that meeting Mr Wilkie, you have a lousy memory. AACo abattoir will be processing cull animals not those suited to LE, its taken nearly 10 years to get going (with only $2.5M from government) has cost $90M to build. Mr Wilkie you are dreaming if you think any government or even private enterprise is going to build another 6 abattoirs in Australia.

AAco’s has been the first cattle processing plant in over 50 years. Of course assuming that producers can supply the animals required, of course do you expect us to give them away, much is made of the capacity but you don’t seem to realise the abs in QLD are 3 months booked out. In WA you expect producers to hold sheep at over 50c a day to just keep supply consistent. You aren’t looking for ways to improve, if you were you wouldn’t be so quick to overlook King Island abattoir closure because JBS choose too, you know the little island that is actually part of Tasmania. You fail to recognise that Tasmania itself is reliant of the live transport of sheep and cattle across the Tasman to be processed in Victoria because Tasmania processing is twice as much as any one else. Do you need reminding that LE out of the NT alone is worth consistently twice of what Tasmania produces in total red meat production. Live export may be unimportant to you Mr Wilkie but shock horror, is vital to us. Shame you couldn’t have spent more than 24 hours in the the NT when you actually did your gracious visit.

The original Post of ‘Wake up Wilkie’ as I wrote 24th February 2014.

There are some things that you should never do in this country because they are just plain dumb, one is drive on boggy muddy wet roads in the wet season the other is ban live export. The first is what I did, my husband and I left our property at 5am one morning after receiving rain and slogged our way through 120km of mud, slush and $h!T, taking 2.5 hrs as top speed was spinning wheels going sideways. We then drove to Darwin, another 6 hours, I allowed hubbie half an hour in each of his shops he needed, as thats all we had time for. The next morning we left Darwin at 5am and drove to Batchalor about 120km south of Darwin and another 80 odd kilometres on a crazyly windy road to a property near the Litchfield national park.

Why, because I wanted to meet Mr Andrew Wilkie  face to face who wants to ban live export, not that I was going to change his mind I knew that but I wanted to tell him why processing in the NT had failed producers previously and why live export was such a vital link to us now. Other producers were there, we explained how stopping Live export would destroy us and our families, we gave our views on various improvements and problems of live export. There were people there that worked in Indonesia, that had worked on the ships he met local indigenous people and those of us who are small producers to some who represent our industry groups and the much larger organisations.

Andrew Wilkie struck me as genuinely wanting to improve animal welfare, it wasn’t a nasty, heated meeting, it was people talking who had very distinct points of view I felt he listened, he looked at you when he spoke and he explained some of his reasoning and intentions politely and clearly. We all tried to do the same, in the approximate 1 hour we had.

But he obviously has little understanding of the past meat processing in Australia or its current situation and I don’t think he appreciated the impact banning live export will have on future operations of properties involved with live export.

To try to put into perspective the value of the live cattle export and importance production of cattle in the Territory I made up the following chart of only the NT animals. It is information taken from waybills supplied to me by the DPI of only cattle sourced from the NT. I used it to correlate the value of $FOB of only NT cattle and to give a very broad estimate of processed cattle. While the $FOB is reasonably accurate the processed value would vary widely and therefore needs to be looked at very loosely.

NT earnings _edited-1Chart 1 – NT Cattle earnings production to Live export and to processors /backgrounding in other states.

When I spoke to Mr Wilkie I hoped he would see perspective, from the other producers, from the workers in the industry, but I also wanted to show him relative to Tasmania what he is actually asking. That being, to ban live exports for all Australian cattle will in the NT cause the degradation of a cattle industry at gate value  worth easily twice as much as his own state’s whole beef production at processed value in Tasmania.

compare NT to Tas._edited-1 Chart 2. Comparing the gate value of cattle production in the NT to the processed value of beef in Tasmania.

Now add to this the problems that Tasmania have with its processors in monopolising the meat production sector there Longford abattoir (Tas) and the fact that Tasmania has lost the processing capacity of abattoirs recently in King Island (Tas) and I had to wonder at the hypocrisy of Mr Wilkie coming to the NT to tell us to do more meat processing when his own states can’t be said to be running too well. In 1987 Tasmania had 5 large processors, 4 of which were domestic and 40 small processors who were doted all over the country doing mainly service kill.

My best guess is now they have 4 large processors (2 owned by JBS), 3 being export, 1 is domestic with only a handful of small service kill operators still working, I only managed to find several but a 2001/2002 government report said the 40 small fellas had dropped to 29.

Now Mr Wilkie’s own state is actually quiet reliant on live export of animals, mainly to the mainland but they do on occassion export a small number of cattle via the mainland to overseas facilities. My question is this and it’s not easily defined in the previous Bills Wilkie has presented.  Is the banning of live export to overseas destinations just a stepping stone for banning of live export of his own producers animals to the mainland eventually? Tasmania send about 50,000 cattle and 300,000 sheep a year to be mainly processed in Victoria. Why because it is half the cost to process in Victoria as it is in Tasmania.

In fact Tasmanian abattoirs have even imported animals to keep processing lines working in past years to enable operating efficencies to be maintained. So Tasmania has cost of production issues in a big way in its processing sector, I think most across Australia would have, but whats Mr Wilkies plan if Tasmanian’s can’t keep those costs in competition down against other processors in Australia. I wonder what his plan is to maintain his own state’s capacity and ability to process?

Surely Mr Wilkie is aware of these problems in his own state, surely he’s not that asleep at the wheel to realise that animal production is at a cross roads in Australia and while it is important we improve Australian meat processing, banning live export and undermining the supply of animals will not do it. Stopping live export will undermine the national herd numbers, do that and the processors will end up with even less cattle.

While talking with Mr Wilkie he was shown a map of the NT, with no less than 10 varied sized abattoirs in the NT at different stages of the last 40 years. All except one is now finished, but its been mothballed and while the AAco abattoir is great and currently being built it has never been intended to be a replacement to live export.

In 1995 producers were being paid $50 a head for delivered animals to the abattoir in Wydham and Katherine, Does Mr Wilkie think going back to these prices if feasible, let alone sustainable!

Mr Wilkie Live export didn’t develope across the north because it was the first idea to strike the producers it developed because our meat processing facilities couldn’t compete in cost and efficency, Now you want us to go back to that. Do politicans really expect producers to give their cattle away and survive, on what! Tasmania is possibly where the Territory was 15 years ago,Cost of production is beginning to be catastrophic on profitability. Tasmanian processors have had to adapt and improve and innovate to stay in business, Territory ones choose to close and the producers of the time left with nothing concentrated on Live export.

Wake up Mr Wilkie, what you are doing is not helping any one or anything, so cut the crap and stop wasting parlimentary time and get on with running the country, or may I suggest your part of it atleast. You have some great processors and producers in your state get out there and help them out and stop trying to ride the coat tails of these animal liberation groups.

Footnote – Left the meeting and drove nearly 700km home again through some serious storms to get home at midnight.

Further reading. ‘Wilkie v’s live exports enters round 4’ James Nason. Beef Central 25.02.14

Categories: Advocacy, Animal Welfare, Australian abattoirs, Beef Industry, Katherine, Live Exports, Northern Territory., Politicians | Tags: , , , , , , , , , | 21 Comments

Best laid plans of mice and men can go astray!

This phrase basically means no matter who or what you are the best laid plans can and will go astray. Operating a business in Agriculture is a bit like that, there are some circumstances when no matter how well you plan financially for example there will always be a curve ball in there somewhere, drought, live export bans, market crashes to name only a few,sometimes things work in your favour, sometimes not.

I don’t have the answers for Australia’s current rural debt problems, I’m not comfortable with debt and it worries my husband and I from day to day the debt we owe to ensure it is serviced and able to be repaid in the longterm. There is always the balancing act of how to improve and increase productivity with out bogging yourself in what I call caustic debt. That being the rock solid debt that you can never get off your books and you can’t trade out of.

Caustic, crippling debt is of very real concern in the community at present. It is the focus of a senate inquiry to consider ways to implement policy that can assist agricultural businesses to combat the root causes of it, costs of production, profitability and long term sustainability.

I encourage people to write a submission to this enquiry to voice your opinion on the establishment of  the Reserve bank Amendment (Australian reconstruction and development board)Bill 2013. Presented by Senator Nick Xenophon and Senator John Madigan in December 2013.

Part of the explanatory background states that the “aim of this bill is to create a specific entity tasked with examining, reconstructing and improving the financial status of the Australian agricultural sector and its associated industries and infrastructure”

If you would like to voice support or opposition to this bill, or have ideas on how agriculture policies can be improved in regards to circumstances that affect it then use this link to submit your ideas. Senate Inquiry – Reserve bank amendment Bill 2013 inquiry

You don’t have much time submissions are due by 10th February 2014. They don’t need to be great long essays, just your view.

As I have been looking at this bill for some time and I tend to look at ABARES statistics for information of a long term nature I have put these charts together from the excel downloads that are available from the Australian Bureau of Statistics – Agricultural Commodity statistics 2013.

Now I’m not a statistician and I don’t claim to understand what index factors mean or how some of these figures are achieved by mathmatical geniuses in Canberra but I don’t think there can be any denial that Australian agriculture debt is an increasing problem and costs of production and lack of return on goods we produce is its leading cause.

1. What are we producing and whats is it really worth?

I’m  happy to be corrected on anything I have given as my view of these charts. Particularly this first one. This chart says to me 40 years ago we were producing a heck of alot less but it was worth nearly 4 times its value at todays index, yet now in 2012 we are producing 5 times as much but realistically worth half of what it was 40 years ago. Clear as mud!!!!! Gee I hope I have that wrong!

net value production #1_edited-1Chart 1. Net Value Production index of that value as per ABARES ACS 2013. Table 13.

Notes accompanying this chart by ABARES

  • The Net value is obtained by the subtracting the farm costs for the year from the Gross value of farm production for that same year.
  • The Index of the net Value of farm production is obtained by deflating the net value of farm production by the consumer price index.

2.Costs of production.

Did you ever think Diesel wouldn’t go over the $2 a litre. I remember my parents having a great debate when a kid because my old man wanted a diesel ute, diesel was 30c/lt, petrol was 60c, I remember him saying diesel will never cost as much as petrol. He bought the ute  because it was going to save heaps in running costs, so mum was pleased. I just thought the ute was cool because it was bright orange.

Diesel._edited-1Chart 2. Off Road Diesel Prices as per ABARES ACS Table 90 – Australian Farm Fuel prices.

3. Extreme Interest.

Remember when interest rates hit 20%, I can’t help but think some of the debt now is because we think interest rates are cheap, and therefore easy money, This is Australia’s track record in regards to the rural lenders interest rates.

Indicative interest rates. _edited-1Chart 3. Indicative interest rates for the Australian Farm sector ABARES ACS 2013. Table 75

4. Whats the damage?

Now this is one scary graph!

Rural Indebtness_edited-1Chart 4. Rural Indebtedness to financial institutions ABARES ACS 2013. Table 76.

Notes accompanying this chart by ABARES

  • All banks – derived from all banks lending to agriculture, fishing and forestry
  • Government agencies includes state banks and advances made under war service land settlement. Before 1996, Includes loans from the QLD Industry development corporation. From 1996 these loans included in bank lending.

Consider on a shorter time frame since 2000, the exact same information from above in chart 4. I hope it seems to have plateaued.

rural indebtness 13yrs_edited-1

Chart 5. Rural Indebtedness to financial institutions ABARES ACS 2013. Table 76.

In 2000 / 2001 Australian agriculture had a collective large institutional debt of $28,514 Million, by 2012/13 this had increased by 125% ($35,789 Million) to be $64, 303 Million.

If we go back to the first chart – Net farm production our net value of farm production in 2000/2001 was $8,121 Million, at last count in 2012/2013 this had only increased by 32% to $10,774 Million.

So does this mean for every dollar of debt we only earned only 30c in adding to our production? Again, I’m happy to be corrected on these comments. But to earn only 30c for every $1 spent sounds very much what my current business plan of spending to income is and it’s not a good scenerio!

5. Does anyone save for anything anymore?

I wish there was more incentive for people to put a deposit down, lay by, have some cash reserves, unfortunately there only seems to be tax incentives to spend money, to borrow to lease. Here is where I think a shift in peoples thinking needs to occur. We need methods of finanicial structure where we can help ourselves, to put away for the bad periods, to keep that wheel turning. Of course saving money depends entirely on people haveing reserves to put away and that comes back to what are we being paid for in the products we produce?

This chart is for ATO – Farm management deposits that only individuals are eligible for, I think something the new reserve board should consider is to allow FMD’s applicable to companies and entities that could benefit by also putting money away. The problem being, the government don’t really like savers, as that affects retail etc by keeping money out of circulation. Personally I think people saving and being rewarded for reduction in debt would have much better long term effects than encourging spending.

FMD_edited-1Chart 6 – Farm management deposits. ABARES ACS 2013. Table 76.

Farm management deposits at 2012/2013 were valued at $3,721 Million, about 6% of what the total value of debt was at $64,303 Million.

6. Now, why on earth do I look at this stuff?

One of my biggest gripes is the producer doesn’t get paid for what they produce, we’ve all heard the term price takers, not makers. We sell cattle and get less than $1 liveweight per kg and then walk down a retail isle and see absolutely nothing under $10 a kg and certainly not a decent steak but it’d be sausages or some rubbish. Dare I look at steak it’d be up around $20/kg.

We see wage earners demanding wage increases equal to CPI and getting it, well its kicking them now because Australian employers can’t afford to pay them.

The live exports boats are paying up around the $2 live at the moment, we’re all going “that’s great, gee wish i had a 1000 head to put in”. The thing is this is the price we should be getting all the time, we should be viewing this as the norm. I don’t sell much to abattoirs but when I hear of people getting less than $1/kg I just have to wonder, someone is taking advantage of those people and that shits me.

A report released in 2009, the Northern Beef situation analysis had conducted a study of North Australian properties across WA, NT and QLD and came to the conclusion that

“The major issues facing the industry include inadequate scale in the more closely settled areas, significant cost escalations in both overheads and direct costs, doubling of debt per livestock unit (LSU) over the last decade while return on assets (ROA) has declined to very low levels of 0.3% up to 2% on average” (Page 2)

I dispute that every one needs massive scale to be profitable, with scale comes staff the biggest profit killers of all. But I agree completely with the escalations of costs and poor returns.

So first I thought the processors were making the money. I’m not sure how these companies sell to other companies which sell to their overseas owned companies and I suspect many are making a lot more than they let on but these are some figures I found to their earnings.

meat processing margins jpg_edited-1Chart 7. Industry costs of the meat processing sector. Source IBIS world. Meat processing in Australia. January 2014.
The column on the right indicates that the meat processors are making an average profit margin of 3.8%.

Teys Australia-A Cargill who process 12.7% (JBS process 16.8%, Nippon 4%, Midfield 3.2%, Fletcher 2.7%)of Australias read meat production claim their processing plant at Beenleigh abattoir (QLD)  site in 2013 operated on a 1% ROA over the last 4 years.
The red meat processing is made up of 65.8% beef, 23.4% lamb and Mutton and 7.9% pork, others are mainly goat.
68.1% is exported, the rest is to wholesalers (8.4%), retailers (7.2%), food service industries (11.4%) and food manufacturers (4.9%).

So I wondered how much the retailers were making as I happened to come across this graph.

retail margins in Australia_edited-1Chart 8. Food retail Margins – ABARES – Australian food statistics 2011/12. Pg 12

Woolworths alone sell 30% of the red meat in Australia (2012/13) (IBIS Oct 2013). Woolworths have the largest retail margin in the world (2010/11)  in Australia at 7.4%, yet rank 17th in world sales turnover and number of stores held world wide.

I made this chart up from ABARES to look at the difference in what the producer gets for a live animal to what retail of meat is sold for.

retail beef, 1990-2013jpg_edited-1Chart 9. Comparing producer saleyard earnings to retail of meat prices. Source ABARES ACS. 2013 Table 131 & 132.

Notes accomanying ABARES table

  • Weighted saleyard price is a weighted average saleyard price for yearlings, ox and cows.
  • Saleyard prices are for quality stock of monthly average of fat stock prices in each major state market.

From the year 2000, retail increased its prices by  51.1% to 2010, Saleyard weighted average increased by 28.6% over the same period. Considering both made gains I still think the retail margin is too high. Please keep in mind these saleyard prices are not what producers were getting for low condition cows or stock during the current sales.

To display this information in a different format I did the following chart

Beef % retail_edited-1Chart 10. Comparing saleyard earnings to live animal differences in prices. Source ABARES ACS 2013,2012,2011,2010 & 2009.

While I thought 460% increase on mark up of saleyard price was steep, I considered costs of processing, at about $300 per head currently forecast and cost of refrigeration, transport and storage would be hugely expensive. So I’m not in a position to say if retail prices are way above where they should be, though I think they seem high. Remember they only sell 7.2% of production.

What did surprise me was the following graph where I tried to compare the same saleyard and retail price graphs of beef to lamb and pork. What concerns me is beef is consistently 40% higher in difference to lamb and pork.

comparing retail %_edited-1Chart 11. Comparing differences of saleyard to retail prices. Source ABARES ACS 2013 Table 131 & 132.

Back to my original introduction of the reserve board I hope it is discrepancies in the retail of meat products like the differences in beef prices to others that I hope they take into consideration when looking at profitability of the meat industry.

If it was possible to get retailers to drop their mark ups on beef products and enable more sales I would hope the extra sales would make up for the loss of their profit margin and more money would filter to the producer. I suspect our problem still lies squarely at the feet of the processors as to what they are paying for the produce when the majority and I suspect prime is exported. Without profitability across the whole meat supply chain as a fairer distribution of that profit then eventually it will be a house of domino’s and the lot comes down.

Making production properties bigger is not necessarily always better because the only ones able to afford to operate soon will be overseas operatives, if something isn’t done about Australian agricultures finanicial stability and longevity now then many producers are going to go to the wall. I don’t want to see that happen.

Categories: Australian abattoirs, Beef Industry, Legislation, Live Exports, Politicians, Property operations, Sheep industry, Uncategorized | Tags: , , , , , , , , , , , , , | 1 Comment

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