Troy Setter, the boss of one of Australia’s biggest cattle and beef companies, says producers need to keep lifting their on-farm productivity by at least the inflation rate.
And he said, in historical terms, that hasn’t been happening.
He said key levers for lifting profitability were better genetics, nutrition and property management.
Mr Setter is chief executive officer of Consolidated Pastoral Company (CPC) which operates a network of 16 properties covering 5.5m hectares across Qld, the Northern Territory and far northern WA.
“We have been investing heavily in genetics, pasture management, animal health and welfare, as well as training our CPC team members to keep lifting productivity and overall performance,” he said.
The national commodities forecaster, ABARES, released a report in 2016 which showed productivity in the Australian beef industry had increased an average 1.3 per cent a year from 1977-78 to 2013-14.
Australia’s rate of inflation has been around two pc for the past few years. The average rate from 1951 to 2017 was 5.05pc but that period included some years when inflation went through the roof.
Mr Setter said the supply chain beyond the farmgate also needed to work harder on increasing productivity to keep our beef industry competitive in world markets.
“Australia is not one of the cheapest processors of meat and exporters of cattle,” he said.
The processing and export sectors had to invest more heavily in technology and innovation and work harder at cutting red tape and the cost of services such as electricity and water.
Mr Setter said DEXA (dual energy x-ray absorptiometry), an objective measurement tool which measures meat, fat and bone in a carcase, offered the chance for more automation in abattoirs and the delivery of better product to consumers.
The industry also needed to keep marketing our image as a producer of clean, green meat while also breaking down trade barriers.
CPC’s two majority-owned feedlots on the Indonesian island of Sumatra have been feeling the impact of higher Australian cattle prices, competition from Indian buffalo meat imports and a slowdown in consumer spending.
Around half of CPC’s turn-off of slaughter cattle are shipped to the feedlots and fed for an average 120 days before processing and sale into the Indonesian market.
Overall, the CPC properties were running at about 85pc of their total carrying capacity of 400,000 head.
CPC runs a broad mix cattle breeds and types with a strong Angus and Charolais influence in the south and a Brahman base in the north.