Profitability remains issue for beef sector

Profitability remains issue for beef sector


PPHS' Robin Steen was not surprised the national average return on assets for beef producers was zero, but he said the SE was in a good position.

PPHS' Robin Steen was not surprised the national average return on assets for beef producers was zero, but he said the SE was in a good position.

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THE statistic that shows the average return on assets for beef producers nationally is zero is not particularly surprising, according to Pinkerton Palm Hamlyn & Steen director Robin Steen.

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THE statistic that shows the average return on assets for beef producers nationally is zero is not particularly surprising, according to Pinkerton Palm Hamlyn & Steen director Robin Steen.

Economic analysis by agriculture consultants RCS Australia showed a never-before-seen average return on assets of zero for beef producers in the past financial year

The organisation’s Profit Probe benchmarking draws on the longest-running data sets in the Australian beef industry and shows that spend-ups with record cattle price money were not reigned in enough to offset the effects of drought and market decline.

“Profitability in the beef job comes back to our export markets,” Mr Steen said.

“With markets like Indonesia, once our beef gets too dear, they’ll turn to buffalo out of India.

“We’ve also got such strong competition from all the other forms of protein, and that’s the problem for the beef industry. Consumption of chicken and pork is growing so fast. The sad thing in Australia is pork consumption is rising so much, and competing with beef, but the amount of imported boneless product coming in is sending our pig farmers broke.”

Mr Steen said once there was a good general break across Australia, he could see beef prices rising swiftly.

“When, and if, we get widespread rain across Australia, I think we’ll see the beef job get very dear, but for a short period of time,” he said.

“It won’t be because of the export market, it will just be based on supply.”

While Mr Steen said the national figures were not surprising, he said it would be a different case in the South East, where good seasonal conditions would have helped boost profitability for producers and given a positive return on assets.

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