Beef v’s Dairy for ProfitabilityMonday, Sep 3, 2001
Two news items from Australia today indicate that the future potentials of beef are good. Growing consumer
demand and new production constraints appear to be changing the balance in the international
It is clear that the northern hemisphere producers are being forced to face up to the problematical
pressures from reduced subsidies and growing environmental protection standards.
But even in Australia, with its seemingly limitless grazing country is now being constrained by controls
on clearing, developing and intensifying animal production by tighter environmental laws.
These moves are not the dramatic changes of direction that were expected to arise from the agricultural
free trade talks of the last decade but are never the less clearly having an effect on the old
patterns of beef production and distribution.
The current NZ pastoral focus on all things based on milk is over looking the longer term viability
of intensive beef production as a profitable substitute product for pastoral farming.
The rapidly increasing capital costs for on farm dairy development and off farm share capital will eventually
limit the attractiveness of further development in dairy production.
Beef on the other hand, and particularly for those farmers who have identified the advantages of an
integrated breeding and fattening operation, has a much lower on farm capital costs and minimal requirement
for off farm processing and marketing investment.
The key operational costs of labour and supplementary feeds are minimised with beef production but are
inflating rapidly for dairy producers
In the race for dairy conversions particularly on marginal dairy country it could be that in most regions
the total farm investment in the medium term will realise a better return from beef production