Ken O'Dowd (Flynn, National Party) Share this | Hansard source

Today I want to talk about the Australian beef industry. As you probably all would know, we have the world's most efficient producers here in Australia, and they are to be congratulated for their efforts in maintaining a very high standard of product that they produce. It is world renowned that our beef products are clean, green and quality food. Foot-and-mouth disease is a big thing that we have been kept free of in Australia, and the biosecurity must be maintained now and forever to ensure that our product is kept in the great healthy state that it is currently in.

We are the third-largest exporter of beef in the world. It accounts for about $12.3 billion of farm value into our national budgets. We have a national herd of 28.5 million and we have 77,164 properties producing beef. Our beef cows and heifers amount to about 13.6 million of that herd of 28.5 million. Of that, 2.6 million go through feedlots and they account for some 33 per cent of our national slaughter. Beef accounts for 16 per cent of the total farm value—three per cent of the world's cattle inventory. We are the seventh-largest producer in the world. Other large producers are the South American countries—Argentina and so on—Africa and China. They have large herds in China. Australians eat on average about 32.5 kilograms of beef per person—and, quite amazingly, 94 per cent of Australians do eat beef. I guess the other six per cent are vegetarians or people who just don't like beef.

There is a particularly bad scenario unfolding before our eyes in northern Australia, and I want to talk about the northern Australian beef producers. They have hit extremely bad times of late. It all started with the banning of live cattle exports. What happened then was that we had 300-kilogram beasts ready to go to feedlots in Indonesia that were stopped in their tracks. It did not only stop the movement of the cattle into those feedlots in Indonesia; it stopped the trucking companies, it stopped the people who shipped the cattle to Indonesia and it put a big stop to the whole northern Australian beef industry—and that affected, of course, the rural towns in the Gulf, north of Alice Springs and north of Mount Isa. Those particular areas have been very hard hit ever since.

Added to that we have had a major drought—they missed rain this year; a lot of places have not had rain since 2012. This has put the industry under a lot of pressure. The hump breed are the ones that do best in the northern regions of Australia, but they could not fit the markets in the south, not so much because of the quality of the beef but because it would cost $200 a head to transfer them down to the southern meatworks. As you probably know, Mr Deputy Speaker, meatworks do not really exist in the northern part of Australia because it is very hot, very wet and the meatworks have to stand down for up to three or four months in the wet season, so meatworks in the north are not very viable at all. In some places you cannot get trucks to the cattle yards to load because the roads are washed out, with heavy rains and cyclones being prominent in that particular area between the months of December and, say, March. So the cattlemen in the north were faced with drought conditions, they had no markets to sell their beef to, the prices came down because of the surplus of cattle and they were generally looking down the barrel at a very bad season ahead—and this continues. We are hoping that the monsoonal rains will soon come and give them some relief. However, their breeding stocks are down. They have no female cattle to breed up their herds again.

They also had a drop in the land valuations of their properties. It was not unusual for a property, say, two years ago to be worth $12 million with a $6 million debt—a ratio of 2 to 1. However, with the devaluation of their properties, their property now could be worth half of that $12 million, and their debt has gone from $5 million to $6 million. This puts them in a dilemma with their banks or their investors who supported them over the years. The banks are now saying to them, 'Sorry, guys, the value of your property is worth what your debt is, so, virtually, no have no asset at all; therefore, when the rain returns, there is no way that we can see us financing your herd.' So what are they to do?

There are many distressed families in the north, and my heart goes out to them. They have had to pull their kids out of boarding school, and it is a situation that you would not wish upon your worst enemy. They are in dire straits. The husband, or the male of the family, feels he has let his wife and kids down, and, really, it has been a lot of things that are out of his control. The Australian dollar has not helped our exports, and there are so many factors that hit the industry all together that it does not bode well for the future.

Trade tariffs are another thing. The United States and New Zealand have free trade agreements with countries like China, Japan and Korea, but we do not have them. America and China's 39 per cent trade tariffs are being whittled back by five per cent a year. So, if we do not soon get free trade agreements with China, Korea, Japan et cetera, we will be losing out at five per cent a year. Gradually, over 15 years, America will be down to zero tariffs, and we will still be sitting on 39 per cent. So it is important that we look at our trade agreements with those countries, and that may eventually save the cattle industry.

I know it is all doom and gloom at the moment, but I can really see a good future for the cattle industry across Australia if we can turn things around and if we can give these cattle producers a bit of a hand up and get them over the hump for the next couple of years. As Indonesia's, Korea's, China's et cetera standard of living increases, they will require more beef. They like what they get from Australia if they can afford it. That is our way out of this mess, but what do our farmers do in the meantime? We need help. I asked the banks to be lenient with our grazier friends up there because they do not control the dollar, they did not stop live exports and they did not bring on the drought. They were just victims of a series of events that have put their businesses in a very unviable position at the moment. (Time expired)

See this speech in context