BANKS were now looking beyond financial performance from a risk management perspective and that presented opportunities for those at the forefront of sustainability efforts.
So says Lachlan Monsbourgh, head of sustainable business development at Rabobank, a guest speaker at an update of Australian beef’s sustainability framework held at Beef Australia in Rockhampton recently.
Rabobank was interested in management to ensure long-term agricultural productivity and environmental outcomes, he said.
It was also looking at creating products within finance that reflected the commodity price.
“Sustainability first and foremost is profitability,” he said.
What’s driving direct consignment
ONE of the main reasons processors are targeting direct consignment over saleyard cattle buying is the requirement to have Meat Standards Australia graded beef.
Commenting on industry data showing the portion of Eastern Young Cattle Indicator eligible cattle processors were taking at the saleyard is tracking 45 per cent below the ten-year average, processors told Fairfax Media most of their Australian customers now demanded a form of grading and they were unable to grade saleyards cattle under Meat Standards Australia.
It’s more profitable for the producer too.
“So far this year our cattle on consignment are averaging close to $50 head above saleyard prices, like-for-like, which if you then add in the $70 to $80 a head in saleyard fees and commissions, the $120 head differential is quite extreme for a producer,” one processor said.
Five years before US comes knocking in China
UNITED States beef producers have a five-year plan for building viable volumes of beef to China, prominent analyst Don Close has revealed.
Speaking at the big Beef Australia event in Rockhampton this month, Mr Close, Rabobank’s US senior analyst animal protein said Australia and the US were fierce competitors for export business in Japan and South Korea.
“Inevitably we will be fighting it out for market share in China,” he said.
“When China last year reopened its doors to US fresh beef, it was under the same stipulations Australia has - traceability and no implants being the big ones.
“We thought at the time for us to get our act together and figure out how to produce a quantity of those cows, and for China to figure out just what primals they wanted and where we can sell those extra parts, it would take five years.”
That time frame, he said, would mean the current Trump-led “rift” with China might work itself out before it really affects the US beef industry.
Beef farm incomes
BEEF farm average income is this financial year projected to the be the highest in 20 years at $195,000, according to Australian Bureau of Agriculture and Resource Economics data released last week.
That is 85 per cent higher than the average farm cash income for beef farms in the 16 years prior.
Going forward, poor seasonal conditions are expected to result in an increase in turn-off of cattle for slaughter but total cash receipts are projected to decrease as a result of lower beef cattle prices, according to ABARES.