A Brief History Of
Australian Beef to 1998 |
 "Cattlefacts Levels
Your Playing Field" |
By: Brian Herne |
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The
unsubsidised Australian cattle industry of today (1998) is recognised as
among the most efficient, consumer focused and quality conscious cattle
industries in the world and a significant player and exporter in the
Western Pacific beef market. This
is a far cry from its status at the end of WW2 when the industry was
introspective, production based and relied heavily on a 15 year meat
agreement with Britain to support undifferentiated beef production. Many
factors have influenced the evolution of this industry but a brief
discussion of the key factors follows: The
introduction of Brahman cattle in the late 1940's Post
war until 1960 the Australian cattle herd was almost exclusively based on
British early maturing cattle breeds, a direct result of our heritage and
the post war "15 year beef agreement" with Britain. Under the
agreement we exported frozen carcases of our heaviest and oldest beasts
with virtually no quality differentiation as it is understood today. The
British breeds run in those days, while well suited to southern and
temperate climates, encountered limiting environmental pressures in the
tropic, sub-tropic and semi-arid regions, virtually much of Australia.
Parasites, ticks especially, droughts, vast acreages, and highly seasonal
foraging conditions, made production of exclusively British breed
relatively inefficient in these regions which were, of nature, also far
from traditional markets. The
introduction of pure bred Brahman cattle from America, first as a
curiosity in 1947 then in substantial numbers in the late fifties and
after, changed the scope and productivity of the Australian cattle
industry decisively. The Brahman gene pool introduced all the
characteristics needed to cope with the less favourable environments and
to produce beef efficiently in them. During the early sixties to late
eighties, was a period high activity in crossing Brahmans with all other
breeds and of producing new stabilised breeds of "Tropically"
adapted cattle like the Droughtmaster, Belmont Red, Braford and Santa
Gertrudis. All benefiting in the survival and productive capabilities to a
medium to large degree from Bos indicus genes. Development
of the USA market & loss of the British market In
1960 Britain's alliance to EEC ideal saw it officially cut its
preferential trading ties with Commonwealth countries like Australia. This
body blow to the Australian dairy and beef industry was softened by the
simultaneous opening up of the American 'grinder beef' market. "Grinder
beef' or manufacturing quality beef is primarily used in the production of
hamburger patties. It presently accounts for over 40% of beef consumption
in the U.S. The expanding grinder beef market in the US, an increasing
population in Australia and increasing numbers of Brahman infused cattle
all helped to take our cattle herd to its all time high of 35 million head
by 1974 before the industry suffered a severe crash. In
1974, similar oversupply pressures pushed the US industry into a dramatic
liquidation phase. Cattle prices crashed in the US and demand for
Australian beef virtually disappeared overnight. This was one of the
blackest economic periods in the Australian industry's history. Cattle
became valueless and it was often much dearer to transport cattle to your
property than to buy them. Some Australian properties actually gave cattle
away rather than see them die in the dry season. By 1978 the Australian
herd was halved, many operators had exited and the industry was beginning
to rebuild its confidence, markets and economics. The
US grinder beef market returned to become the mainstay of our export
markets and by the year 1990 imported its high of around 330,000 tonnes of
beef from Australia. In the intervening years, starting in 1985 two other
events occurred that are principally responsible for the shape and
direction of the Australian cattle industry as we know it today. The first
was the establishment of the AMLC, the other was opening of access to the
Japanese beef market. The
establishment of the AMLC Political
thinking in the mid 1980's that moved to replace traditional commodity
boards with structures closer to commercial business models led to the
replacement of the "Beef Board" with the AMLC in 1985. Although
ostensibly established to represent 'Industry' interests, the AMLC was in
fact a QUANGO, under legislation that allowed it to operate effectively at
arms length from the industry. Ten years later in 1995, producer
disenchantment with its perceived lack of result in increasing their
returns and its perceived 'unaccountability' saw the AMLC dissolved into a
beef industry restructuring process that continues today. Nevertheless,
during its operation the AMLC took management of cattle and beef affairs
onto a professional level not previously possible in the industry. A range
of issues from research to marketing and promotion all received specialist
full time professional attention liberally funded to about 90 million a
year by a levy on cattle slaughtered.. The
AMLC was responsible for establishing standards in carcase description,
formalising research and analysis processes, overseas market intelligence
and many other facets of business development and practice. Most
significantly, AMLC activities served to steer cattle production ideas
away from an introspective, supply driven lifestyle, towards a demand
driven, customer based business approach. This process is far from
complete and given the culture of cattle production some believe may never
be. During
its tenure the AMLC played a vital research and advisory role to
governments and industry on important matters of international beef trade
and specifically the developing global movements toward tariff free or
reduced tariff international trade
initiatives such as the GATT (General Agreement on Tariffs and Trade -Uraguay
round), NAFTA (North America Free Trade Agreement) and the 1994 US Farm
Bill. All issues dealt with tariffs subsidies and market access issues
that were vital to the growing export dependence the Australian beef
industry. An Organisation with the resources and capabilities of AMLC was
a timely resource to the Australian industry during those times. Opening
of Japanese and Asian beef markets The
major recent development for the Australian industry in the middle 1980's
and almost coinciding with the establishment of the AMLC was the
development of the Japanese quality beef market as an export destination.
The market was initially 'opened up' by the USA as a Japanese concession
to the growing trade imbalance between the two countries. Once the
precedents of access to that market was established, Australia was able to
negotiate its own initially modest access rights. This
access was the springboard for many other developments in the Australian
industry. The development of lot feeding, and the export of chilled rather
than frozen beef were most important. The spirit of industrial competition
with the American product and the quality demands of the Japenese market
both led to a better appreciation of consumer demands and quality
assurance within the Australian industry at large. Today
there is relatively little difference in the 'Quality' of beef produced by
Australia and the USA. Market perception, fad, and commercial advantages
are the main differentiators. Australia and the US now equally share
volumes into Japan and Japan has become a major export destination. Japan
and other Asian countries, notably Korea and also Taiwan have come to
account for around 50% of our exports, the US taking the other 50%. Although
these proportions can vary widely under differing seasonal and economic
circumstances, the Australian industry now relies on exports for over 60%
of its cattle production and has claimed the title of 'worlds largest
exporter of beef' many times over the past 10 years. Live
exports Perhaps
the most dramatic expansion in the beef/cattle market began in around 1991
when South East Asian countries like the Philippines, Thailand and
Malaysia began modest importation of live cattle from our Northern ports.
Few predicted that the initial trade of 70,000 head annually would expand
10 times over the next 7 years to exceed 700,000 head in 1997. By 1997
Indonesia had accounted for 420,000 head annually of this figure and
consequently its crash from the market in late 1997 left that sector of
the industry stunned. It
is interesting that the live export market developed rapidly as exports to
the US declined. Some industry commentators expect a revival of our US
market in the short term and a return of live export demand in the medium
term. Either of these events would see the export trade in live cattle
revitalised. The
future |
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© Cattlefacts November 1998 - www.Cattlefacts.com.au |