Cattle Prices

There has been much discussion in recent months about the improvement in cattle prices for Australian producers.  The price improvement in late 2015 has certainly been most welcome and reverses the trend of a number of years of very poor returns for cattle producers. 

It is interesting to consider how good the price rises have been.  The chart below shows cattle prices in nominal terms and also real or inflation adjusted terms.  The data shows a slight improvement in prices over time in nominal terms.  However, price rises have not kept up with the inflation rate, demonstrated by the steady decline in saleyard prices in real terms. 

Despite the recent price rises, cattle prices are still approximately 25% lower in real terms than those prevailing in 1980. 

Figure 1:  Average Australian Saleyard Price for Yearling, c/kg.  

Source:  ABARES, Commodity Statistical Bulletin 2015. 

Since 1994, average weekly earnings in Australia have risen by approximately 130% in nominal terms.  Cattle prices referred to in the chart above rose by only 30% in the twenty years between 1994 and 2014 in nominal terms.  The price rises in 2015 have meant that prices have risen by about 80% since 1994, still considerably less than wage rises. 

FURTHER READING

Australian Bureau of Statistics (2015)  6302.0 Average Weekly Earnings, Australia.

CATTLE AND METHANE GAS

The production of methane gas by ruminant animals is often given as a reason by some people as a reason for avoiding meat to mitigate the potential effects of methane on global warming.  The notion exists that methane is a more potent greenhouse gas than carbon dioxide.  Like so many issues surrounding agriculture, a little knowledge is dangerous and leads many people to the wrong conclusions.  It even led to the New Zealand Government at one point considering a financial penalty for the farming of ruminant animals. 

There is a popular belief that methane is something like 20 to 25 times more potent than carbon dioxide – an example of how if you repeat a lie enough times people start believing it.  Here are a few facts:

• ·         Carbon dioxide is nearly three times heavier than methane so if equal volumes of the gases are compared rather than weights it is evident that the warming ability of methane is grossly overstated. 
• ·         Carbon dioxide remains in the atmosphere for hundreds of years whereas methane has a half-life of around eight years converting into carbon dioxide and water. 
• ·         There appears to be little correlation between methane levels and the number of ruminants on the planet.  Increases in the number of ruminant animals has resulted in no corresponding increase in methane levels in the atmosphere. 
• 
  

·         Livestock agriculture contributes between 15% and 28% of global methane emissions from human activity.  The balance comes from activities such as rice growing, landfills and pipeline leaks. 

Having discussed the relative potency of methane and carbon dioxide, perhaps the most important point is that in many ways it is irrelevant.  I raise livestock in the rangelands of Australia where there are few alternative land uses and cattle are raised in close as possible to a natural environment.  It is one of the most benign forms of food production.  The vegetation that grows here would be eaten or broken down by something.  In our case it is cattle converting the grass to meat – if the cattle were not there the grass would be eaten by termites or broken down by microorganisms releasing methane into the atmosphere. 

The digestion performed by ruminant animals is truly a miracle of nature which brings into agricultural production land that would otherwise be unsuitable for production.  It is a form of food production which should be promoted rather than the opposite. 

FURTHER READING

Brill, Barry (2011)  Methane:  myths and misrepresentations.  http://quadrant.org.au/opinion/doomed-planet/2011/05/barry-rill-methane/

Schwartz, Judith D (2013) Cows save the planet and other improbable ways of restoring soil to heal the earth.  Chelsea Green Publishing. 

The Case for Livestock Farming Part 2

We often hear of the disconnect between urban dwellers and the farming community here in Australia and in other parts of the world.  Most people don’t grow food and many don’t know anyone who does grow food and have little understanding of how their food is produced. 

It seems to me that the disconnect goes further than that – the urban existence means that many people no longer have an appreciation for the circle of life.  Temple Grandin puts it this way – “Unfortunately most people never observe the natural cycle of birth and death.  They do not realise that for one thing living to survive, another living thing must die”. 

Life feeds on life – every living thing whether it is a fish, bird, bacteria, plant or fungi feeds on other living things.  Humans are part of this despite the fact that most of our food is sourced from a supermarket. 

Grazing animals of which domesticated livestock are an important component of this cycle of life.  Ruminant animals have the ability to digest cellulose in grass in their rumen – the first component of their complex digestive system.  Of course it is not the animal that is digesting the cellulose but the bacteria, fungi and protozoa in the rumen. 

Livestock are able to digest the plant material and return nutrients to the soil through urine and faeces.  Without the grazing the plant material will continue to build up and prevent new plant material from growing.  The grasses need the livestock as much as the livestock needs the grass. 

In addition to gaining the benefit of recycled nutrients, people are able to benefit from livestock through the supply of products such as meat, milk and fibre.  In Australia most of the land mass is made up of open rangelands.  Cattle are able to utilise the vegetation on marginal, uncultivated land and convert this into food. 

 

Further Reading

Thinking in Pictures.  And Other Reports from My Life with Autism.  Temple Grandin.  Vintage Books. 

 

The Case for Livestock Farming Part 1

There are many arguments put forward against livestock farming, none of which have any substance.  One of the arguments against livestock farming is the environmental one.  It always disappoints me to hear people say that to reduce their carbon footprint they should reduce their meat consumption.  Such glib statements while not only being profoundly ignorant do nothing to further the cause of the environmental movement. 

We produce meat in the rangelands of Australia – it is one of the most environmentally benign forms of food production.  There are minimal inputs such as fertiliser or herbicides and the land supports a variety of plants in contrast to the monoculture of modern cropping operations. 

The grass produced on the station will either be fermented on the ground or in the fermentation vats that are the digestive system of a cow.  By having a cow utilise the grass then we can utilise the output of this fermentation.  And by appropriate management of the livestock on the property we can maximise the carbon that is sequestered by the vegetation. 

The use of livestock can also reduce the fuel load through the grazing of herbaceous plant material thus reducing the probability and negative consequences of wild fire.  Thus if we eliminated beef production in our neck of the woods it is likely that carbon output would increase and nothing would be produced.  

The potential benefits of livestock farming in the rangelands have been recently highlighted by Allan Savory with his talk on TED receiving more than one million viewers.  Mr Savory illustrates the potential to produce food on land while improving its condition by mimicking nature.  

Spy Scandal in Indonesia

Just when the Northern Cattle Industry thought that we may have turned the corner, along comes a scandal which threatens the recovery of the industry.  The scandal this time is in the form of espionage where Australia is accused of intercepting the mobile phones of senior officials in the Indonesian Government. 

What has all that got to do with cattle producers in the north of Western Australia?  Very little is the answer, but it still seems the northern cattle industry could be the collateral damage if the relationship between Australia and Indonesia continues to sour and retaliation takes the form of lower beef and cattle imports. 

The cattle industry in the north of Australia continues to rely heavily on live exports and will continue to do so for the foreseeable future.  There is a processing facility under construction in the Kimberley region of Western Australia.  Initially at least this facility will source cattle that are not suitable for the live export trade. 

The live export trade plays to the relative strengths of both Australia and Indonesia.  In the north of Australia, we have the comparative advantage of in breeding cattle.  With access to a variety of by-products, Indonesia has advantages in feeding cattle.  Low labour costs in Indonesia means that they can process cattle very cheaply compared to Australia. 

The contrast with breakdowns in diplomatic relations with other countries could not be more stark.  The spat with China over comments made by the Foreign Minister does not result in any threats of trade retaliation. 

While the Australian cattle industry should continue efforts to diversify markets, the Indonesia will remain very important for the foreseeable future.  

Darkest Hour

The darkest hour is the hour before dawn.

I have always liked that saying for the hope that it brings.   I don't think that it is actually true and that the darkest hour is generally sometime in the middle of the night.   Never mind, I like the saying and I will stick to it.  

I interpret the saying to mean that when everything is at its bleakest, better times are just around the corner.  It certainly feels that things are at their bleakest at the moment and hope there are improved times ahead. 

The parlous state of the beef industry in Queensland has garnered media attention recently with cattle selling for as little as twenty dollars recently.  In a similar situation but for different reasons are fruit growers in Victoria who have had their contracts cancelled by SPC and are faced with the agonising decision of whether to pull out their trees.  

In my industry, the northern cattle industry, we currently have no markets for our cattle.  At a time of the year when we should be at our busiest, it is a waiting game to see whether cattle markets can be re-established.  The most frustrating thing is knowing that the people on the ground want and need what we produce but politicians get in the way to stop trade happening. 

There is plenty to be positive about when it comes to Australian agriculture such as increased demand from key markets in Asia and rising demand from agricultural products generally.  There have been some positive signs for other farming groups.  Dairy farmers have recently been the recipient of price increases for the coming season.  Good opening rains have been received in much of the winter cropping areas around Australia. 

I am just hoping for some positive news here to get the northern beef industry back on track.  

Cattle in Indonesia or people in Bangladesh?

What is more important - cattle in Indonesia or people in Bangladesh?

My industry - the cattle sector in the north of Australia - has been rocked by animal welfare abuses in export markets, notably Indonesia and Egypt.  These incidents were truly shocking to all those involved in the sector.  The response of the industry to these incidents was swift and involved investing more into animal welfare in these markets.  

To participants in the industry like me the response of the Australian Government to the problems seemed to be completely disproportionate to the magnitude of the issue.  To completely close the trade overnight crippled a successful industry in addition to offending an important trading partner and close neighbour.  

The contrast between the response to animal welfare problems in Asia and human rights abuses could not be more stark.  Recently a factory in Bangladesh collapsed killing more than 1000 people making it the worst industrial accident since the Bhopal disaster in India nearly 30 years ago. The factory collapse was the result of shoddy building standards and overcrowding in the building. 

The factory in Bangladesh produced cheap clothing enjoyed by consumers in affluent countries including Australia.  Judging by the reaction to animal welfare abuses, you would have expected a bigger reaction to this disaster and demands to rectify the situation.  After all human lives were involved and not just the lives of  farm animals.  The expected reaction would have involved a boycott of similar products made in Bangladesh or at the very least, the boycott of the companies involved, some of which were well known international brands.  And it is not as if the factory collapse was an isolated incident.  It was merely the latest in one of a string of incidents.  

To say the reaction in Australia and around the world to these incidents is muted would be the understatement of the decade. They barely create a ripple in the Australian media and no calls for blacklists from Green Party politicians.  

Of course any such boycott would not have been welcome in a desperately poor country such as Bangladesh.  The workers in such factories are no doubt grateful for whatever meagre wages they are paid.  Instead the industries involved should do a similar thing to the Australian livestock industry - work with the local companies to improve their standards. Isolating countries such as Bangladesh or even industries within the country is likely to be counter productive.  

Positive Media for Livestock

It is easy to get downcast in the livestock industry.  Not only do you have to cope with low prices, high costs and increasing Government regulation, but there are also ridiculous claims from environmentalists that livestock production is bad for the environment. 

It is always good to see positive media about the sector when it comes along.  Once piece of media that has gained a lot of traction recently is the video by Allan Savory on the potential to reverse desertification in the world’s grasslands through the use of livestock.  Not only can there be food production from now degraded areas, economic and political stability can be improved in areas prone to violence. 

Allan Savory also mentions the role of regenerating grasslands and its positive effects on reversing the global warming.  The video challenges much of what is regarded as conventional thinking – that livestock production adversely affects the environment and that less is better.  To those of that produce livestock in the rangelands it confirms what we already know.  That is running livestock in the rangelands is one of the most environmentally benign forms of food production.  The rangelands are teeming with life and capable of producing large amounts of food. 

Further Reading

Allan Savory: Grassland ecosystem pioneer.  http://www.ted.com/speakers/allan_savory.html

The Farming Gene

I think we all have the farming gene in us somewhere.  For many people the gene is latent and remains that way for their whole life.  In others who live in towns and cities it may manifest itself through people growing fruit and vegetables in their backyard along with a few chooks.  Some people exercise their farming gene by visiting friends and relatives who live on rural properties. 

For farmers the “gene” is fully expressed through daily activities as they go about producing food and fibre.  Often the farming gene can reveal itself when someone marries a farmer.  Traditionally this happened when a woman from the city married a farmer and moved to the bush.  Now there are many men who follow their wives back to farms that may have been in the family for generations. 

On our property in Northern Australia, we often see expression of the farming gene when a backpacker comes to the station with no experience in handling livestock and takes to it like a duck to water.  Of course we encourage expression of the farming gene as much as we can by on the job training and encouragement. 

The farming gene also becomes evident in jobs around the homestead such as feeding the poddy calves or tending the chooks.  Again people with little or no experience in dealing with animals soon have a real connection with the animals in their care. 

Despite most people becoming further and further removed from their food production, the farming gene means that everyone could get back to some form of food production without too much trouble.  

My Country

“I love a sunburnt country, A land of sweeping plains, Of ragged mountain ranges, Of droughts and flooding rains.”

The famous lines from Dorothea Mackellar’s poem “My Country” often runs through my head as I drive around the property.  We do not have any mountain ranges here, but we do have plenty of sweeping plains. 

The strange thing at the moment we seem to have flooding rains and droughts at the same time.  Below is a photo taken at the northern end of the property in the last few days showing a few calves enjoying the green grass. 

 

Incredibly the photo below was taken just one day later showing a fire which had started as a result of a lightning strike.  This was taken towards the southern end of the property where obviously much less rainfall had been received. 

 

Flooding rains are a part of the landscape up here – between Broome and Exmouth in Western Australia is the most cyclone prone coastline in Australia.  Unfortunately droughts are also part of the scene up here as they are for all of Australia.  However, It is very unusual to have both events seemingly occurring at the same time. 

Peter Reith's Solution for Australian Agriculture

Attention has been focused on the plight of Australia’s dairy farmers in the wake of the decision by Coles and Woolworths to cut the price of their home brand milk to $1/litre.  In addition to the poor returns for their output, dairy farmers like all primary producers in Australia have suffered from higher input costs including fuel, electricity, labour and fertiliser. 

Peter Reith recently weighed into the debate about the viability of the dairy industry and proposed a six point plan to reduce costs.  Given much of Australian agriculture is facing similar problems to dairy farmers, it may be appropriate to use Mr Reith’s blueprint for other sectors.  Below, I consider if the Reith plan could be extended to other farm sectors. 

 

1.        Cut municipal rates; councils have been increasing expenditure above inflation.  This needs to stop. 

This is certainly applicable to most farmers.  In our case, shire rates increased by 9% last year following similar increases in previous years.  This was an outrageous increase given the Shire provides no services to us. 

2.       Abolish payroll tax on all dairy processing plants. 

Abolishing payroll tax on manufacturing plants including meat and dairy processing would indirectly benefit the farm sector.  Taxing employment has always seemed like one of the most insidious forms of taxation. 

3.       Reduce energy prices by abolishing the carbon tax and remove impediments to other initiatives like gas, including coal seam methane. 

I will sidestep the issue of coal seam gas, but certainly agriculture is an energy intensive business and will therefore benefit from lower prices.  The carbon tax has certainly negatively impacted on the meat and dairy processors and thus affected farmers in these sectors. 

4.       Reform labour market policies introduced by Labor for the benefit of unions. 

In our case we have problems getting labour so reforming labour market policies have not affected us too much. 

5.       Slash government waste, cut wasteful expenditure, and stop the boats to cut costs. 

No-one could argue with this point.  In addition to reducing wasteful expenditure, Governments should also reduce the regulatory burden they place on business. 

6.       Slash the petrol tax to lower business costs.  Improvements to transport should be a much higher priority ……

Again lowering taxes will obviously assist business in a period when input costs for farm businesses have increased significantly.  Investment in transport infrastructure and other infrastructure such as ports and rail will also assist export focused sectors such as agriculture. 

 The response to Peter Reith’s plan has not exactly been ebullient.  On www.milkmaidmarian.com dairy farmer Marian Macdonald thought the plan, at first, was a spoof.  It is notable that Mr Reith does not mention the elephant in the room – the supermarket duopoly. 

What affect would the Reith plan have overall on the agricultural industry?  The results would be minimal in the short term – the problems of the dairy industry and my own industry, the northern cattle industry, have specific problems not addressed by Mr Reith. 

Should the Reith plan be implemented?  Absolutely – the medium and long term benefits from his ideas would be substantial across all agricultural industries. 

Will the Reith plan be implemented?  Probably not – Governments of both political persuasions have shown little appetite for meaningful reform in areas such as Government spending. 

FURTHER READING

Reith, P (2013).  Stop milking our dairy farmers.  http://www.abc.net.au/unleashed/4464198.html

 

Wildlife and Cattle Production

It is often assumed and sometimes promulgated by anti-farming groups that all agricultural production comes at an environmental cost.  In our case, we have a great example of conservation and food production in a nice balance with mutual advantages. 

Our station is adjacent to Eighty Mile Beach – a vast coastline which is home to a number of migratory wader birds.   Despite its name the Eighty mile beach is approximately 230 kilometres long.  Many of these species migrate to the northern hemisphere to breed, often flying thousands of kilometres in a single journey all without complaining about the airline food.  The farthest journey from the Kimberley is to Siberia which is sometimes completed in a single journey. 

A few of these species feed on the grass plains of the station while seeking refuge on the beach during the hot part of the day.  The birds benefit from the presence of cattle as they keep grass shorter reducing potential hiding places for predators including birds of prey and feral cats.   Water points provided for cattle, can also serve as thermal refuges for the birds at hot times during the day. 

Three key bird species that forage on the grasslands but roost on Eighty-mile beach during the hottest period of the day are the Oriental Plover, Charadrius veredus, Little Curlew, Numenius minuta and Oriental Pratincole, Glareola maldivorum. 

The birds do a great job of reducing the burden of grasshoppers and thus benefiting pasture production.  In addition to being able to fly across the world, the birds appear to know where rain has fallen in Australia and thus the best places to feed. 

Being an extensive grazing property in the rangelands, inputs are minimal – no fertilisers or herbicides are used in cattle production.  Raising cattle in the rangelands of Australia is one of the most environmentally benign forms of food production in the world.  In addition to a light environmental footprint, pastoralists also perform a number of other important environmental services including the control of weeds and feral animals such as cats, wild dogs and camels.  The control of wildfires either by controlled burns or by extinguishing fires when they start is also an important environmental service. 

 

FURTHER READING

Hollands, D and C Minton  2012  Waders.  The Shorebirds of Australia.  Bloomings Books Pty Ltd. 

Rogers DI, CJ Hassell, A Boyle, K Gosbell, C Minton, KG Rogers and Clarke, RH  2011  Shorebirds of the Kimberley Coast – Populations, key sites, trends and threats.  Journal of the Royal Society of Western Australia, 94: 377-391. 

Mustering is Nearly Upon Us

It is that time of the year when we are waiting around for the start of mustering.  It is a bit like the feeling you get when playing cricket and you are next in to bat or when you are waiting for a flight at the airport and your plane gets delayed.  Everyone just wants to get on with it. 

Commencement of mustering is dictated by a number of factors.  If it is too wet then you cannot drive around the property so mustering is delayed.  The commencement of the live export boats is also critical as this is our main market for cattle. 

Everyone starts getting itchy – helicopter pilots want to start flying, cattle agents want to start selling, truckies want to start trucking.  And the long suffering pastoralist such as me who hasn’t any income for six months wants to get some cash flow happening. 

On the station at this time, it is all about preparation.  There is a long list to complete:

·         Making sure all vehicles are serviced and ready to go.

·         Ensuring all cattle supplies are ordered such as vaccines, drenches, tags,

·         Ensuring truck is ready to go to move cattle around the property

·         Repairing all the fences

Much of the work that we do all year round on the property prepares us for the onslaught of mustering like grading the roads.  All of our roads we grade ourselves which is a massive job given that we have nearly 1000km of roads. 

Of course the grass is always greener on the other side of the fence – once we are into the thick of mustering we will be longing for the relative peace and quiet of the wet season. 

Impending Cyclone

The impending cyclone – that feeling you get in the pit of your stomach when something significant and unknown is about to happen.  It is a bit like the feeling you get before going to a job interview or going to the dentist. 

That ominous white blob on the satellite photographs that slowly crawls in your general direction.  It is a time when you give thanks to the modern marvels of technology such as the internet so you can follow every centimetre of the cyclone’s progress. 

Of course a good way of dealing with this concern is to keep as busy as possible so you don’t have time to think about things too much.  That is generally fairly easy as there are always plenty of jobs to do: 

-          Tying down the windmills around the property

-          Tying down the sheds

-          Putting all the vehicles undercover

-          Cleaning up around the homestead so that there is no debris lying around.

Our animals are always our primary consideration on the station.  The cattle generally do a good job of looking after themselves.  They get in amongst the trees to shelter from the wind where possible. 

As the cyclone approaches we all start to sweat on each update from the weather bureau – has the cyclone changed direction?  Will we get more wind or less?  How much rain will we get? 

The weather bureau issued a warning about storm surges along the coast.  Our homestead is situated about 7 kilometres from the ocean.  Prior to the commencement of the strong winds, we could hear the ocean from the homestead – the constant roar sounded much like an aircraft in the distance. 

Tropical Cyclone Lua passed near us without causing too many problems.  It was certainly very windy with the house I was sheltering feeling like it was shaking in the wind.  The photos of the palm trees give a good idea that it was very windy. 

The biggest problem turned out to be all the debris which accumulated around the homestead. 

Cyclones are part of the fabric of life in the north of Western Australia.  Between Broome and Exmouth is the most cyclone prone coastline in Australia. 

It doesn’t make it any less frightening when it happens but at least we know we can prepare well when the next one happens.