Farm costs, and the
cost of living for farm families, have increased in-line with the national rate
Costs have increase
40% since 2001 and about 30% in the decade to 2013.
THE INCOME COST SQUEEZE
In real terms, cattle
prices have declined 30% over the decade.
This has led to an
income cost squeeze. In the biological
world of cattle production, it is impossible for an individual business, let
alone an industry, to achieve the annual 3-5% gain in productivity that is
needed to maintain positive margins.
Australia is not a
cheap place to grow livestock.
The soils can be poor
and nutrients may be bought in. There is the tyranny of distance. The rainfall is erratic and droughts are
frequent. Australian businesses pay
world parity prices for input costs including energy, equipment, and farm
chemicals. We must pay first world wages to farm workers, business and
community service providers, bureaucrats and politicians.
There is no way
Australian cattle can be the “cheapest” in the developed world.
Going forward, we must
correct the system that allows the Australian grass fed cattle producer to be
excluded from the potential income that his animal generates.