MEAT AUSTRALIA TAKES LEAD IN WORLD BEEF TRADE

Press, Volume CIV, Issue 30900, 5 November 1965, Page 16

MEAT AUSTRALIA TAKES LEAD IN WORLD BEEF TRADE

(By the Melbourne correspondentof the "Financial Times.’’! (Reprinted from the "Financial Times" by arrangement I

Australia is emerging this year as the world’s largest beef exporter, with long-range prospects of vastly expanded production from immense pastoral potential still only on the threshold of development.

Record production, together with a slower growth of domestic consumption, and the decline in Argentina’s export surplus, have contributed to Australia’s new status in the world trade.

Output has been boosted in the latest year by increased slaughtering of stock from drought areas, but a strong expansion has been evident in the industry over the past decade, especially since 1958 .vhen shippers obtained freedom to supply the lucrative United States market. In ten years, beef shipments have doubled and the mutton trade has trebled, lifting exports in 1964-65 to a record 605,000 tons carcase weight, representing about 34 per cent of production. Drought Areas For the immediate future, supplies may be reduced by the rundown of stock in drought areas, but the consequences will be less serious than was feared earlier, as the drought is now confined mostly to western Queensland and the far north-west of New South Wales.

Looking further ahead, the outlook is for continued expansion of supplies as new areas are brought into production and more intensive use is made of existing pastoral country. In recent years the greatest gains have been made in southern States where dramatic results have followed the use of advanced pastoral practices —and the potential for expansion is far from exhausted.

But'the future, especially for beef, lies mainly in the north where a pastoral revolution is taking hold of the vast cattle country where many holdings are in a primitive stage of development. New horizons are opening with the launching of plans to clear millions of acres of brigalow scrub, and the building of 2,000 miles of all-weather roads giving secure outlets to markets for the remoter stations.

It is, however, from the introduction of new exotic grasses and legumes, tested by research workers over a long period, that the really spectacular results are expected to flow. Over large areas, scientists forecast a five-fold increase in the present carrying capacity with the use of fertilisers and the miracle plant, Townsville lucerne, which entered Australia as a weed and is now hailed as the greatest discovery in the history of the tropical pastoral industry.

Surveys by two scientists of the Commonwealth Scientific and Industrial Research Organisation indicate that 430 million acres of land are suitable for crops and sown pastures of which 360 million acres await development. In the long term, when this potential has been developed, they believe Australia should be able to increase her cattle population from 19 million to 85J million, and her sheep from 165 million to 450 million, and obtain even greater proportionate in meat production through better weight - gains and earlier turn-off of stock. For northern Australia, they have forecast a ten-fold increase in beef production when the new pastoral practices are introduced generally. These are long-range prospects, and some authorities think it will take 20 to 25 years for the new practice to be reflected in any major increase in production. Primary industry officials in Queensland. however, believe the rate of expansion in that State will be more than doubled in the next decade.

Progress could be accelerated if manpower shortages could be overcome. Another major obstacle is the high level of capital investment involved —a factor which may call for more big- corporate developments such as the King Ranch of Texas project in the Tully Valley of North Queensland. According to one authority, an outlay of £2OOO million would be required to carry out the C.5.1.R.0. scientists’ proposals in full. How fast the northern potential will be developed depends also on world markets. Conditions have never been so good. New Outlets Although the boom has waned on the American market, exporters have been able profitably to divert more meat to Britain and to develop new outlets on the Continent, where shortages of home-pro-duced and overseas supplies have opened excellent opportunities. While Australia’s problem at the moment is “finding meat for markets rather than markets for meat,” it is recognised that the situation could quickly change. Assessments of the prospects differ widely in the industry from a cautious official view to the optimism of some industry leaders who want cattle numbers increased as

rapidly as possible to take advantage of a sellers’ market which they believe will continue for many years. In planning Investment programmes. cattle-raisers are warily keeping in mind the possibility of a recovery in the Argentine trade over the next few years and the risk that doors in Europe could close when greater self-suffi-ciency is attained. In some Government quarters there is not complete confidence that Australian exports will have a permanent place even in the British market where free access is guaranteed under the 15-year agreement only until September, 1967.

If new agricultural policies raise Britain's domestic production from 73 per cent, to, say, 80 per cent, of demand, it is argued, there would clearly be pressures to limit overseas supplies. British Attitude Observers recall that the world meat shortage is a fairly recent occurrence, and that less than two years ago Britain was appealing to her suppliers to exercise voluntary restraint in exporting to the market.

To-day there are fears of restrictions again. At this stage, the Australian industry has no idea what the British attitude will be towards imports when the agreement expires, but it is hopeful that Australia will continue to enjoy free access to the British market which, this year, is taking almost one-third of total meat exports. Although this marks a sharp fall from the near-80 per cent, dependence on Britain in 1953-1954, trade authorises believe the British market will always be important for Australian exporters. They believe, too, that free access will be in the interests of Britain where the trade wants to maintain supplies and prevent meat becoming scarce and dear.

In the more competitive conditions which may lie ahead. Australian producers believe they will have advantages in the availability of vast areas of relatively lowcost land which should enable them to produce as cheaply, if not more cheaply than any other country in the world. These advantages, it is thought, should enable fhem to develop wider markets in emerging countries to absorb supplies, even if prices are not as good as in the older, established markets of the world.