Australia: Beef producers prioritising productivity over profitability
In the current economic environment, input costs from feed costs to council rates are ever-increasing expenses. The BPIS provides industry-first numbers regarding turn-off weights based on producer type.
There is typically a heavier turn-off weight seen in southern Australia when compared to northern Australia, with variations based on producer type.
At a producer level, the average turn-off weight is based on producer type.
Over the next 12 months, it is expected that a large majority of producers will maintain turn-off weights.
Producers are expecting to maintain turn-off weights given the increased input costs which are creating a downward pressure on profit margins. This is leading to a maintenance period for turn-off weights for most producer types.
Despite this, 50% of producers nationally are continuing to fatten cattle until they hit target weight. If producers continue to fatten cattle without considering the growing input costs, there will be a profit margins decrease, forcing producers to sell above market price to break even.
Producers need to consider the cost benefit of continuing to feed animals and the end price received for the animal to evaluate if continuing to feed is cost-effective.
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