THE Limestone Coast red meat industry is a significant earner for SA accounting for one third of the state’s production, but it could be worth much more with a lift in productivity and profitability, according to a report commissioned by the Limestone Coast Red Meat Cluster.
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It analysed the size and value of the industry, and the flow of livestock in and out of the region, using data from a range of sources.
PIRSA’s Red Meat Score Card found in 2013-14 the region’s net red meat revenue was $614 million and with a lift in cattle prices it would be even higher.
ABS data analysis found the region, including the Coorong, was home to 64 per cent of the SA cattle herd and 34pc of its sheep flock.
Livestock turned off achieved higher prices from the state’s processors than other regions although it was unclear how much was driven by heavier weights versus higher quality.
The report’s author Dennis Wignall, the Macrologic managing director, said it would provide a basis for benchmarking to grow the region’s red meat sector.
The cluster could also identify opportunities to act collaboratively to achieve the benefits of scale without having to buy or lease more land.
In the past 25 years the average national return on assets, excluding capital growth from agriculture, was poor averaging 1pc per annum.
“High rainfall regions are tracking even worse at minus 0.1pc,” Mr Wignall said.
“This is not what I would call market failure but for what is one of the toughest industries with seasons, price fluctuations and policy changes it is a pretty tough return.
“If those are the sorts of returns being made it is hard to borrow money to buy more land and is hard to sign up a lease.”
In the past five years performance on the Limestone Coast had improved achieving 1.7pc return on assets and was outperforming other high rainfall areas.
But Mr Wignall – who has more than 30 years experience in the ag sector – said the potential for further gains was huge.
ABARES analysis had identified a large variance between the level of management skills and scale of individual farm businesses in agriculture.
These ranged from -9pc to as high as 14pc for well managed businesses with $1 million plus in farm output.
“Each step up in management adds two to three per cent in returns,” he said.
“Each step up in scale adds about 2pc but you have to get better before you get bigger.
“Scale alone is not enough.”
- Details: www.limestonecoastredmeat.com.au
