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Beef v’s Dairy for Profitability

Greetings Readers

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 beef market

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 than dairy.

Good farming

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