Australian Beef Industry
Currently, there is a global awareness of the significance of agricultural productivity sustainability among nations. Agricultural productivity is essential in enhancing the long-term concerns of a nation and source of income generation among persons living in rural areas. It also improves food security and ability of a nation to deal with related catastrophes. In Australia, the nation’s ability to make good use of the opportunities for future growth of agricultural and food demand depends on its innovativeness that comes along with productivity improvements. Australia’s beef industry has been instrumental in the agricultural productivity of the nation both domestically and globally. Cattle beef products come from the northern and southern regions. Furthermore, several challenges and opportunities have also influenced the industry productivity. This paper presents a general analysis of the agricultural industry in Australia and focuses on beef industry.
Australian Beef Industry
Agricultural Productivity in Australia
There are several determinants of productivity growth in a nation (Loko & Diouf, 2009). At the farm level, the productivity of a farmer is enhanced by improvements that reflect production of more outputs, for instance, livestock and crops that come from market inputs such as land, labor, market, capital materials, and services. At the industrial level, productivity is quantified in terms of effective resources across farms through positive industrial structure. One of the main determinants of enhanced agricultural productivity is innovation because it enables farmers to minimize production costs by adopting more effective technologies as well as management practices. As the relative farm prices decrease due to innovation and technology, there is profit maximization among farmers that enhances productivity growth and savings. In this case, some farmers may opt to produce normal output but with a reduced cost while others may decide to increase their productivity with an increased input through expansion of farm sizes, thus benefiting from economies of large-scale production (Sheng et al., 2014).
In Australia, the agricultural sector encompasses a diverse range of industries. The main sector is the bread care sector, which is made up of non-irrigated crops, cattle, and sheep. The sector has been enhanced by the availability of large tracks of land and water supply (Grice, Watson & Stone, 2013). The majority of these lands are arid and semi-arid, a factor that favors livestock grazing and native vegetation. Australia’s broad acre farms contribute to 54% of the gross agricultural production, which is averagely 53 % of the agricultural business (ABARES, 2012). High values of horticultural industries result in the gross value of agricultural productions. Australia’s agricultural sector highly focuses on the export market, whereby the majority of its gross value farm produces are destined for foreign markets.
Currently, Asia has turned out to be one of the leading destinations for Australia’s agricultural products (Drysdale, 2009). For instance, from 2011 to 2012, the Asian markets imported more agricultural exports from Australia (ABARES, 2012). The key markets are China, Japan, Indonesia, and the Republic of Korea. Similarly, Australia’s agricultural exports to Europe have largely diminished while the exports to the United States have improved. Europe and the United States account for approximately 10 % of the value of Australia’s agricultural exports. Nevertheless, specific industries vary in their scope of production for exports and use of domestic markets. Other high value agricultural industries produce products for domestic market. For instance, from 2010 to 2011, the horticulture production exported only 15% of the value of its produces. Contrary, the broad acre agricultural sector focused on export production. For example, the total export of wheat was 67% as compared to the value of production in 2010–2011 and virtually all the produced wool was exported (ABS, 2012d). Furthermore, the nation’s agricultural imports are also expanding. In as much as the nation remains an important net exporter of agricultural and food products, the total imports in the last 25 years have expanded, almost double the number of Australia’s exports (ABARES, 2012).
The first cattle to be introduced in Australia were aimed at developing the nation in 1788 (Queensland Government). After several years, the cattle increased in numbers to a level where cattle farming was commercialized. After the commercialization of cattle farming in Australia in the 1850s, there was a rapid increase in the demand of beef in the nation. Currently, cattle farming in Australia is one of the huge agricultural investments across million hectares (Jayasuriya, 2003). The nation has managed to export beef across the globe ranking second after Brazil. Australia prides in being one of the greatest producers of safe beef that is free from infections across the world. The most common beef breed that is used in Australia is the Bos Indicus cattle that is typically fattened, processed, and exported to international markets, such as Japan.
The northern part of Australia accounts for the highest production of beef product in Australia (Gleeson, Martin & Mifsud, 2012). Nevertheless, this production is less than half of what is produced in the whole nation. It is believed that most of the cattle from the northern region are usually forage for feed. The beef product from this region is of lower quality as compared to southern beef. Therefore, most of the beef products from the northern region are intended for export markets in the Asian nations.
To improve the quality of beef quality produced in the northern Australia, the cattle are transported to the south regions where they are given grain feed before slaughtering (Rutherford, 1995). After this process, the beef is boxed and then exported to other nations like the United States, for instance, humbugger. Furthermore, beef farms in the southern regions of Australia are commonly more intensive as compared to the southern regions. Most of the farmers in the southern regions of Australia also breed European and British cattle breeds that are well renowned for their ability to gain adequate weight for meat products that is of high quality (Martin et al., 2013). After slaughtering the animals, which is done at different ages, the meat products are then exported to various high value markets like Russia and Japan.
One of the main challenges that face beef agriculture in Australia is that the nation’s cattle industry functions in a liberalized setting (Zhao, Mullen & Griffith, 2008). This implies that the autonomous trade liberalization has amounted pressure to the beef industry to compete in the worldwide markets against super beef producers that are greatly subsidized. Due to this facet, Australian beef farmers have been forced to invest significant amounts of cash and other outputs in productivity enhancements. For instance, many developments have emanated from heredities, pastures, and market promotions.
Nevertheless, due to enhancements that have been put in place to improve beef productivity in Australia, many beef farmers and producers in the Australian cattle industry have emerged in strong position to uphold profitability. Moreover, the ability to develop and compete in the global markets has also allowed the beef industry to clinch on and make good use of the opportunities that are apparent in the future of the industry. Another significant challenge that affects the Australian beef producers is the dependence on a comparatively trivial number of export markets destination. This occurred when the national government suspended all cattle exports to Indonesia. The action was a big blow to the beef industry and endangered the farming activities and forthcoming production of numerous northern region cattle farmers (Blanchett & Zeller, 2012). This suspension affected the beef products since they were very few alternatives that farmers from the nation could sell their products to.
On the contrary, one of the major advantages of Australian beef industry is the fact that the meat is disease free, safe, and clean. This was enhanced specifically through the implementation of the National Livestock Identification System that ensured. Through this adoption, it is mandatory that beef cattle be given electronic identification ear tag at the initial stages of their growth. In the process of the animal growth and progression and in supply chain, the animal can be easily tracked through the identification system. For instance, there was an eruption of cattle disease in the U.S., which led the Japanese government to suspend all the U.S. beef imports for several years. This was a great opportunity for Australia as it was able to penetrate the Japanese meat market. If the same outbreak could have been reported in the Australian beef industry, the National Livestock Identification System could have treated the nation’s beef products in isolation, which could have affected the whole industry. The main reason Australia was among the first nation to implement the National Livestock Identification System was due to its endeavors to access large international market for its beef exports.
Agriculture is one of the main sources of exports in Australia and the nation produces approximately 3.9% of the globe’s beef (Australia Beef Industry Overview, 2015). Within the nation, more than 60 % of the beef production is intended for international markets (Australia Beef Indistry Overview, 2015). Therefore, globally, Australia is among the biggest producers of milk products besides the Unites States of America and Brazil.
The highest form of beef products that are exported from the nation is live exports or processed beef. The live export market is the northern Australia, where the Bos Indicus cattle are destined for Asian nations, for instance, Indonesia. Nonetheless, in as much as the growth of live export has been enhanced in the previous years, the highest amount of export production is processed within Australia and then exported to foreign nations. The main destinations of processed beef products for Australia are Korea, Japan, and the United States among other nations.
In Japan and Korea, Australia trades in high quality, high streaked beef. The beef products that are intended for these two nations are passed through the production system and fed in a feedlot a number of days before being exported. The Australian beef products are also exported to European nations as a result of the presence of the European and British breeds in the nation.
The United States is one of the major producers of beef products (Lowe & Gereffi, 2009). However, due to its increased value markets as compared to Australia, the nation has had an opportunity to deliver for its substantial ‘hamburger’ market. The beef product that is exported to the United States is normally boxed beef, which originates from the Australian northern regions.
The main starting point for any beef cattle agriculture production is pastures. Cattle production entails the transformation of grass or grain to weight and consequently beef. In Australia, numerous farmers depend on natural pasture or grass that is found in the cattle production belt regions (Wells, 2013). Nevertheless, the nutrient content, protein and energy in this natural pasture, is lower as compared to the manufactured pastures. Despite this fact, the natural pasture is stronger than the manufactured pastures. Moreover, other farmers in Australia in search for cattle pastures will sow different plants and grass, which produces plentiful, highly nourishing silage. In most cases, farmers select the best fodder for their animals. After making the final decision, they use a breed that is well suited for their production purposes, which can adapt to different specific local environments. At present, the Angus breed is the most common breed in Australia. This is because the Angus Breed has the ability to produce premium quality beef as a result of marbling. Other common breeds in Australia, for instance, the Charolaise are recognized for their ability to grow faster. Brahman is a resilient breed that can survive hostile conditions, commonly found and suited in the northern production systems. After settling for a specific breed, a farmer then identifies the correct genetics. The genetics involve the selection of males that may breed their chosen animal. This is mostly done with regard to the Estimated Breeding Values (EBVs).
Generally, it is apparent that the demand for protein is expected to upsurge significantly as the rates of incomes across the world increases among nations and people. This facet will result in the increased demand for beef from several developing nations, which will progress Australia’s export prospects. Furthermore, several nations that are facing an increasing demand for red meat are also trying to increase their local production. For instance, in 2010, Indonesia enforced a weight restriction on cattle exports in the nation. This approach was aimed at assisting local producers to increase local beef production, with the aspiration of becoming self-sufficient. In addition, during the peak of the Soviet Union, Russia had plenty of cattle, which fell sharply afterwards.
The implication of this is that the nation had imported many beef products over the years. Nevertheless, it recognized the need of rebuilding the cattle industry and has a dream of increasing its herd to approximately four million by 2020. In the short term, this indicates that the nation is trying to offer opportunities to the local Australian farmers who are selling their live breeding animals locally. In the long term, this process will see the farmers and the nation increase production of beef to global markets and will reduce the imports of the product. Several other nations have set up the policies like Russia and Indonesia. Through the introduction of more sophisticated technology, for instance, the EBVs in the global market, many cattle producers across the globe have also increased the adeptness and beef production. Nevertheless, the increased production is unlikely cater for the increased demand of beef products globally.
Currently, the Australian beef herd is approximately at 28 million head. This average is meaningfully higher than the long- term average. In the recent past, encouraging climatic conditions have triggered and encouraged several farmers to preserve the female cattle for breeding. Furthermore, the decreasing price of wool has also triggered the long-term increase of herd average. This is because several sheep farmers in Australia focus on beef production due to high profits and other benefits. In addition, sheep production in the nation requires a high cost of venturing into the industry, thus making the beef cattle production industry favorable to many producers.
Increased export value markets, for example, Japan and South Korea have also enhanced herd size in Australia. This has been a historic battle between the United States of America and Australia in order to gain access to these markets. The United States has been the main competitor of the Australian market. The disease outbreak in the United States in 2003, however, gave Australia an upper hand in accessing these high valued markets. Nevertheless, in 2006 Japan began the process of lifting the ban of meat products from the United States due to its compliance with the safety measures. This implies that Australia is likely to start facing the competition once again for the high valued markets for meat products.
Beef production is one of the main backbones of any economy across the globe in enhancing lives of people and the positive monetary growth of a nation. In Australia, several approaches have been put in place to support the industry to meet the demand of beef products globally and at a local level. These include the enhancement of pasture productivity, which will enable pasture to be effective in its functioning. Furthermore, enhanced genomics among cattle producers have become significant in allowing beef farmers to appreciate the features of the animals when they are maturing. This process is significant in allowing the selected animals to be bred earlier without any losses. Moreover, the incorporation of animal indicators in their feed consumption will be effective in ensuring the beef producers select the animals that are capable of effectively converting pastures into weight.
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