Northern Rivers Beef: Industry Snapshot

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1 Northern Rivers Beef: Industry Snapshot

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3 Suite Molesworth St PO Box Heath St LISMORE NSW 2480 EVANS HEAD NSW 2473 tel: tel: fax: info@rdanorthernrivers.org.au kluckie@outlook.com web: web: Chief Executive Officer: Ben Redden RDA Northern Rivers would like to acknowledge: the report authors Katrina Luckie (luckie & associates), Geof Webb (previous RDA NR Communications Officer) and Kyllie Walker (RDA NR Research Officer); Fiona Borello and Simon Stahl of Northern Meat Cooperative Company for information on meat processing; livestock agents and saleyards operators: Chris Moran, Grafton Regional Livestock Centre; Darren Perkins, George & Furhmann (Holdings) Pty Ltd; Glen Weir, Ian Weir Weir & Son Pty, Ltd; and Frances Ryan for providing data on sales activities in the region; Rik Whitehead and Todd Andrews of NSW DPI, and Nathan Jennings of Local Land Services for assistance with identification of regional/local data, and MLA for the prime cattle sales data that has been reproduced courtesy of Meat & Livestock Australia Limited - Cover photo: Jill Hunter 2014 RDA Northern Rivers CITATION: Regional Development Australia Northern Rivers, Northern Rivers Beef: Industry Snapshot, Regional Development Australia Northern Rivers We respectfully acknowledge the Aboriginal peoples of the Northern Rivers including the peoples of the Bundjalung, Yaegl and Gumbaynggirr nations as the traditional custodians and guardians of these lands and waters now known as the Northern Rivers and we pay our respects to their Elders past and present. Disclaimer This material is made available by RDA Northern Rivers on the understanding that users exercise their own skill and care with respect to its use. Any representation, statement, opinion or advice expressed or implied in this publication is made in good faith. RDA Northern Rivers is not liable to any person or entity taking or not taking action in respect of any representation, statement, opinion or advice referred to above. This report was produced by RDA Northern Rivers and does not necessarily represent the views of the Australian or New South Wales Governments, their officers, employees or agents. Regional Development Australia Committees are: ii Regional Development Australia Northern Rivers

4 Table of Contents OVERVIEW... 5 THE NORTHERN RIVERS... 5 HISTORY... 6 GROSS VALUE... 6 EMPLOYMENT... 9 NUMBER OF ENTERPRISES SIZE OF NORTHERN RIVERS HERD CATTLE SALES IN THE NORTHERN RIVERS MEAT PROCESSING BEEF INDUSTRY PERFORMANCE BEEF MARKETS AND SUPPLY CHAIN CONCLUSION REFERENCES ACRONYMS AND ABBREVIATIONS List of Tables TABLE 1: VALUE OF BEEF INDUSTRY 2005/06 TO TABLE 2: BEEF CATTLE AND AGRICULTURAL PRODUCTION CONTRIBUTION TO GRP, 2010/ TABLE 3: BEEF INDUSTRY EMPLOYMENT (NO. EMPLOYEES) BY PLACE FOR WORK FOR NORTHERN RIVERS AND LGAS, TABLE 4: GROSS NUMBER OF CATTLE SALE UNITS AT NORTHERN RIVERS SALEYARD FACILITIES, 2010/11 TO 2014/ TABLE 5: PRIME SALES TRENDS FOR STOCK CLASSES AND WEIGHT RANGES AT NRLX, 2010/11 TO 2014/ TABLE 6: NORTHERN RIVERS BEEF PRODUCER PROFIT SCENARIOS BY RAINFALL (2013) List of Figures FIGURE 1: NORTHERN RIVERS REGION... 5 FIGURE 2: VALUE OF CATTLE PRODUCTION ($), 2005/06 TO 2011 IN NORTHERN RIVERS LGAS... 8 FIGURE 3: EMPLOYMENT IN BEEF INDUSTRY SUB-CLASSES, BY PLACE OF WORK FOR NORTHERN RIVERS, NSW AND AUSTRALIA, FIGURE 5: NO. OF CATTLE IN NORTHERN RIVERS LGAS, 2005/06 AND FIGURE 6: TOTAL HEAD SOLD AT NRLX PRIME SALES PER ANNUM, 2010/11 TO 2014/ FIGURE 7: TOTAL HEAD SOLD PER STOCK CLASS PER ANNUM AT NRLX PRIME SALES FOR PERIOD 2010/11 TO 2014/ FIGURE 8: MONTHLY TRENDS FOR TOTAL NUMBER OF HEAD SOLD AT NRLX PRIME SALES, 2010/11 TO 2014/ FIGURE 9: PRODUCTIVITY IN THE AUSTRALIAN BEEF INDUSTRY FIGURE 10: REAL FARM CASH INCOME, BEEF INDUSTRY, AVERAGE PER FARM, FIGURE 11: AUSTRALIAN CATTLE INDUSTRY MARKETS, 2010/ iii

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6 Overview Northern Rivers Beef: Industry Snapshot provides a regional data summary on trends and status of the beef industry in the Northern Rivers. The Snapshot has been prepared with industry consultation to identify key facts and information, but not to assess industry issues, or the role of key agencies and organisations that exist to support the beef industry. The Snapshot identifies further work required to address this as well as factors associated with data accessibility at the regional level. The Northern Rivers The Northern Rivers region of New South Wales is located in the far north east of the state, just below the Queensland border (Figure 1). The region covers 20,706 square kilometres and approximately 290,000 people or 4% of New South Wales population (RDA NR, 2013). The region includes the Local Government Areas (LGAs) of Ballina Shire; Byron Shire; Clarence Valley; Kyogle; Lismore City; Richmond Valley; and Tweed Shire. The Northern Rivers has a unique sub-tropical climate, diversity of soils, high levels of biodiversity and a wide range of land uses. The economic base is dominated by small, micro businesses with strengths in health care and social assistance, retail, accommodation and food services, education and training, manufacturing, agriculture and construction. Traditional agricultural land uses that are still major contributors to the regional economy include the beef and sugar industries. Figure 1: Northern Rivers region Source: RDA NR (2013) Northern Rivers Beef: Industry Snapshot 5

7 History Beef grazing in the Northern Rivers, on lands that were squatted stations started in 1840, when Henry Clay and George Stapleton set up Cassino station (later abbreviated to Casino) on the Richmond River (NSW Roads and Maritime Services, 2012). Many of the early pastoral holdings were owned rather than leased by landholders (OEH, 2011). In the first half of the twentieth century, dairying emerged as a major form of primary production in northern NSW and by the mid-1930s, the Co-op now known as NORCO became the largest agricultural cooperative in the Southern Hemisphere. In the latter part of the 1900s, Victoria rose to prominence as the nation s top milk producer and at that time many North Coast dairy farmers turned to beef production. Meat processing became a significant manufacturing activity in the region early last century and by the end of 1932 the [Byron Bay] meatworks was killing 1,000 calves, 400 cattle and 300 pigs per week (Stubbs, 1972). In 1933 the Northern Co-operative Meat Company (NCMC) was established at Casino and by the late 1960s the Byron Bay and Casino abattoirs collectively slaughtered around 10% of the state s beef cattle. In the last few decades there has been a significant decline in the dairy industry, increased competition between land uses, the rise of smaller more intensive horticultural industries and a contraction in the number of agricultural enterprises on the NSW North Coast. This highlights the continuing trend towards consolidation of agriculture, particularly amongst more traditional industries where it is increasingly difficult to retain viable businesses on traditional-sized land holdings (Eco Logical Australia, 2015). Despite these challenges, beef cattle has become (by far) the most valuable item of primary production in the Richmond-Tweed: followed by fruit and nut growing (Wilkinson, 2014). The beef industry has consistently been and still is a major employer in the region, along the whole supply chain, including growing, transport, refrigeration, processing and production. Casino is renowned as the Beef Capital of NSW and proudly celebrates the history and continued significance of this industry with an annual Beef Week 1 festival in May. Gross value In 2012/13, ABARES estimated the gross value of cattle and calf production (including live cattle exports) in Australia at $7.4 billion (MLA, 2013). Whilst the Northern Rivers contribution to this is relatively small, beef cattle production is a major contributor to agricultural production in the region. According to the 2011 Agricultural Census (NSW Trade and Investment, nd) and North Coast Local Land Services (Eco Logical Australia, 2015), beef is the Northern Rivers most valuable agricultural commodity to the economy of the Northern Rivers and North Coast regions. In 1 Beef Week extends well beyond a week with activities throughout the whole Richmond Valley LGA. 6 Regional Development Australia Northern Rivers

8 addition, the North Coast Local Land Services (NCLLS) study by Eco Logical Australia (2015) determined a priority order and growth status for all industries contributing more than $2 million annually to the North Coast LLS region 2 (Eco Logical Australia, 2015). The beef industry was identified as the sixth highest ranked industry, with a stable growth status, and the largest agri-business contributor to the NCLLS economy. In the Northern Rivers, beef cattle production accounts for almost 28.9% of the total value of the region s agricultural income, up 7.9% on the 2006 figure (NSW Trade and Investment, nd). Table 1 indicates that the total contribution of beef to Gross Regional Product (GRP) in 2011 was more than $127 M, or 1.03% (NSW Trade and Investment, nd; and AEC Group, 2014). This figure is consistent with the national contribution of beef cattle to Gross Domestic Product (cited as approximately 1% in by MLA, 2013). In 2011, the value of the Northern Rivers beef production was 7.9% of the $1, M value of the State s (NSW) beef production (NSW Trade and Investment, nd). Table 1: Value of beef industry 2005/06 to 2011 Indicator Beef Industry (a) (Northern Rivers) Agriculture (a) (Northern Rivers) Total Northern Rivers Region (b) Total NSW (c) $ value, 2011 ($M) , ,895 Contribution to GRP, 2011 (%) Gross Regional Product, 2005/06 ($M) ,852 Growth, 2005/ ($M) ,013 Growth, 2005/ (%) Annual growth, 2005/ (%) Sources: (a) NSW Trade and Investment (nd) (based on & Agriculture Census), (b) AEC Group (2014), (c) ABS (2011a) The growth in the value of the beef industry in the Northern Rivers at 7.6% per annum has been significantly higher than the total growth of agricultural production in the Northern Rivers (only 0.05% per annum). Figure 2 highlights that the value of cattle production has been increasing in the all local government areas (LGAs) in the Northern Rivers during the period 2005/06 to 2011, with the greatest increases evident in Kyogle (10.9% per annum), Richmond Valley (10.0% per annum) and Clarence Valley (8.8% per annum) (NSW Trade and Investment, nd). Beef is the most significant contributor to LGA agricultural production in Kyogle at 65.8% ($37.8M and 2.3% of total NSW cattle production) and Clarence Valley at 48.9% ($33.9M, 2.1% total NSW cattle production). It also contributes 22.9% ($17.4M, 1.1% total NSW cattle production) and 21.6% 2 The region for the North Coast Local Land Services extends from Tweed Shire in the north, south to the Port Macquarie Hastings local government area (LGA). The region is assessed as three distinct socio-economic landscapes (SELs). The northern SEL includes most of the Northern Rivers region, but not all of the Clarence Valley or Richmond Valley LGAs. Only 870 km 2 of the Clarence Valley LGA is in the Northern SEL, with the remaining 9,552 km 2 in the Central SEL. Most of the Richmond Valley is in the Northern SEL (2,654 km 2 ), with only 392 km 2 in the Central SEL. Northern Rivers Beef: Industry Snapshot 7

9 $ value of cattle production ($20.3M, 1.3% total NSW cattle production) towards the LGA agricultural production in the Lismore and Richmond Valley council areas respectively. Figure 2: Value of cattle production ($), 2005/06 to 2011 in Northern Rivers LGAs $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000, Agricultural census year 2011 $- Ballina Byron Clarence Valley Kyogle Lismore Richmond Valley Tweed Source: NSW Trade and Investment (nd) (based on & Agriculture Census) In terms of beef s total contribution to gross local production, this was highest for Kyogle at 11.8% and Richmond Valley at 2.3% in 2010/11. Beef cattle made a minor contribution towards both agricultural and gross local production in the Ballina LGA, at 5.2% and 0.2% respectively in 2010/11 (Table 2). Table 2: Beef cattle and agricultural production contribution to GRP, 2010/11 Area $ Value total Agricultural Commodities 2011 (a) $ Value Cattle Production 2011 (a) Total $ (M) GRP 2010/11 (b) Beef as % of Total GRP 2010/11 Beef as % of Agricultural GRP 2010/11 for LGA/Region Ballina 56,880,828 2,976,221 1, Byron 29,306,169 4,809,549 1, Clarence Valley 69,401,836 33,882,653 1, Kyogle 57,426,382 37,769, Lismore 76,063,338 17,433,317 2, Richmond Valley 93,925,149 20,311, Tweed 56,889,925 9,911,689 3, Northern Rivers 439,893,627 27,094,505 12, NSW 11,639,935,757 1,616,146, ,895.0 (c) Source: NSW Trade and Investment (nd) (based on & Agriculture Census), b) AEC Group (2014), (c) ABS (2011a) 8 Regional Development Australia Northern Rivers

10 Employment Table 3 indicates that beef farming and related classes in the region employed 3,006 people in 2011 (ABS, 2011b). Whilst 3.3% of the Northern Rivers workforce was employed in beef farming and related sub-industry classes, this was double the State and National proportions of 1.50% for NSW and 1.49% for Australia (Figure 3). Within the industry employment classes there are higher rates of employment in beef cattle farming for the Northern Rivers region (51.43% compared to 30.14% for NSW) and meat processing (25.98% compared to 16.89% for Australia). Figure 3: Employment in beef industry sub-classes, by place of work for Northern Rivers, NSW and Australia, 2011 Fresh Meat, Fish and Poultry Retailing Meat, Poultry and Smallgoods Wholesaling Leather Tanning, Fur Dressing and Leather Product Cured Meat and Smallgoods Manufacturing Meat Processing Meat and Meat Product Manufacturing, nfd Grain-Sheep or Grain-Beef Cattle Farming Sheep-Beef Cattle Farming Beef Cattle Feedlots (Specialised) Beef Cattle Farming (Specialised) Sheep, Beef Cattle and Grain Farming, nfd 0% 10% 20% 30% 40% 50% 60% Northern Rivers NSW Australia Source: ABS (2011b) nfd = not fully defined In comparison to the regional workforce other industries of similar size in 2011 included: transport, postal and warehousing (3,022); wholesale trade (2,700); and other services (3,521) (ABS, 2011b). Just more than a half of those working in the beef industry (1,546) were specialist beef farmers, with the greatest employment in the Clarence Valley (26.26%), Kyogle (21.86%) and Richmond Valley (15.94%). Of the quarter of beef-related employees engaged in meat processing in 2011, 80.41% were employed in the Richmond Valley, 13.83% in Clarence Valley and 3.59% in Byron LGA, representing the meat processing and abattoir facilities in those areas. There were also high proportions engaged in leather tanning and processing, predominantly in the Richmond and Clarence Valleys (67.8% and 20.3% respectively). Whilst the Richmond Valley (36.45%) shows strong employment levels in meat, poultry and smallgoods wholesaling, there are also high Northern Rivers Beef: Industry Snapshot 9

11 levels in Tweed (28.04%) and the Clarence Valley (17.29%). Employment in fresh meat, fish and poultry retailing is highest in Tweed (28.34%) and Clarence Valley (19.20%). Table 3: Beef industry employment (no. employees) by place for work for Northern Rivers and LGAs, 2011 Beef industry employment classes Ballina Byron Clarence Valley Kyogle Lismore Richmond Valley Tweed Northern Rivers Sheep, beef cattle and grain farming, nfd Beef cattle farming (specialised) ,546 Beef cattle feedlots (specialised) Sheep-beef cattle farming Grain-sheep or grainbeef cattle farming Meat and meat product manufacturing, nfd Meat processing Cured meat and smallgoods manufacturing Leather tanning, fur dressing and leather product manufacturing Meat, poultry and smallgoods wholesaling Fresh meat, fish and poultry retailing Total , ,006 Source: ABS (2011b) nfd = not fully defined Employment in beef cattle farming has decreased from 2006 to 2011 in the Northern Rivers by 18.14% or 350 employees (ABS, 2011b and RDA NR, 2011). Employment in meat processing has also reduced from 1,109 to 781 employees (- 328 employees or 29.85%), which would have been largely impacted upon by the closure of Ramseys Meats in Grafton in Regional Development Australia Northern Rivers

12 Number of enterprises MLA (2013) reported 77,164 properties in Australia with cattle according to the ABS Agricultural Commodities data in 2011/12. The number of farms reporting cattle activity in the Northern Rivers totalled 2,864 in 2011 totalling 3.7% of Australian cattle properties and 10.6% of NSW cattle farms (NSW Trade and Investment, nd). There has been a decline of 296 cattle reporting farms in the region from 2005/06 to 2011, with the greatest reductions in the Clarence Valley (-96 farms), Lismore (-65 farms) and Kyogle (-50 farms) (NSW Trade and Investment, nd; Industry and Investment NSW, nd). Size of Northern Rivers herd The Northern Rivers herd is spread over the entire region and primarily includes small breeding herds of less than 100 head (Huefner & Associates PL, 2012). There are no major feedlots within the region. In 2006, NSW DPI identified that most herds produce store weaners, with the rest providing vealers and growing out or finishing steers. Most herds producing store weaners are run on native, lower quality pasture areas and calves are sold in store condition at 5-7 months of age at low liveweights ( kg). The weaner-producing herds grazed on improved pasture areas based on the better soil types turn off calves at 7-9 months of age weighing on average kg. Store weaners move to more favourable grazing areas for growing out and finishing as prime cattle. (NSW DPI, 2006, p 12). As breeding management matches the seasonal availability of paddock feed, with vigorous pasture growth in the wetter, warmer months, herds tend to calve in late winter to spring, with their progeny turned off in autumn. In 2011, the Northern Rivers herd size was estimated at 359,146, 6.8% of NSW s 5.3M and 0.9% of the Australian 42.1M cattle (NSW Trade and Investment, nd; MLA, 2013). The herd size decreased from 413,104 (13.1%) between 2005/06 to Figure 5 indicates that the reduction in herd sizes between 2005/06 to 2011 was highest in the Clarence Valley (-21,867 cattle, -3.1% per annum), Lismore (-10,216 cattle, -3.9% per annum), Kyogle (-9,185 cattle, -1.7% per annum) and Richmond Valley (-6,405 cattle, -2.3% per annum). Northern Rivers Beef: Industry Snapshot 11

13 No. cattle Figure 5: No. of Cattle in Northern Rivers LGAs, 2005/06 and , , , ,000 80,000 60,000 40,000 20,000 0 Ballina Byron Clarence Valley LGA 2011 (a) (b) Kyogle Lismore Richmond Valley Tweed Source: (a) NSW Trade and Investment (nd); (b) Industry and Investment NSW (nd) Whilst farm numbers and herd sizes have reduced, gross value of beef cattle has increased, indicating benefits associated with productivity and/or higher sale prices. Cattle sales in the Northern Rivers The Northern Rivers Livestock Exchange (NRLX) on the outskirts of Casino is the largest livestock trading facility in northern NSW, with other facilities in Grafton, Lismore and Murwillumbah. NRLX currently operates two sales each week, one each for prime and store sales. Grafton Regional Livestock Centre and Lismore Saleyards conduct weekly prime sales and monthly store sales, and Murwillumbah conducts a fortnightly sale. Prime sales tend to service product to meat processing facilities and operators, whereas store sales tend to service other farmers looking to buy additional stock for their property. There are seven agents identified to support sales activities at these facilities. These facilities serve a producer catchment well beyond the seven LGAs within the RDA- Northern Rivers boundary, including parts of the Mid-North Coast, the western slopes of the Northern Inland and some producers from South East Queensland. According to Nathan Jennings, NSW Local Land Services Officer (personal communication, 2014): The saleyards are still the North Coast s favoured method of selling, due to our smaller farms and because beef is often not their main source of income and selling in other ways takes too much time and effort. Table 4 indicates gross throughput of cattle at each of the region s saleyards facilities for a five year period. Fluctuations reflect seasonal and price variations, for example, the closure of Ramseys Meats and flood events in the Clarence Valley are reflected in lower sale volumes during 2012 to Regional Development Australia Northern Rivers

14 Table 4: Gross Number of Cattle Sale Units at Northern Rivers Saleyard Facilities, 2010/11 to 2014/15 Grafton Regional Lismore Livestock Centre (a) NRLX (b) Saleyards (c) Murwillumbah Saleyards (d) 2014/15 50, ,977 24,889 7,500-8, /14 38,839 92,944 20, /13 35,256 96,280 19, /12 47, , /11 55, ,596 34,710 Source: (a) Moran, C. Grafton Regional Livestock Centre, personal communication, 7 July 2015 (b) Frances Ryan, NRLX, communication, 9 July 2015 (c) Glen Weir, Ian Weir & Sons Pty Ltd, communication, 21 July 2015 (d) Darren Perkins, George & Fuhrmann (Holdings) Pty Ltd, communication, 13 July 2015 Due to the larger volume of throughput at Casino, this is the only facility that Meat & Livestock Australia (MLA) record the weekly prime sales data. Huefner & Associates (2012) estimated 50% of the prime sales at NRLX are processed at the Northern Cooperative Meat Company (NCMC), which is within walking distance of the yards via which cattle can be moved on foot, without the need for additional loading and unloading. As the prime sales data includes cattle moving in and out of the region it can only provide an indication of patterns of activity, however, a five-year time series analysis provides some insight into stock classes, weights and general cattle sale trends through the NRLX. Figures 6 and 7 highlight total prime sales activity at NRLX for the period 2010/11 to 2014/15. The dip in sales between 2012/13 and 2013/14 reflects national reductions in herd sizes due to droughts, as well as the lift in prices and sales due to the wetter years of 2010/11 and 2011/12 (MLA, 2015a). Figure 6: Total Head Sold at NRLX Prime Sales per Annum, 2010/11 to 2014/ / / / / /15 Source: MLA (2015b) Northern Rivers Beef: Industry Snapshot 13

15 Stock class Figure 7: Total Head Sold per Stock Class per Annum at NRLX Prime Sales for Period 2010/11 to 2014/15 Yearling Steer Total Yearling Heifer Total Vealer Steer Total Vealer Heifer Total Manufacturing Steer Total Grown Steer Total Grown Heifer Total Cows Total Calves Total Bulls Total - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 No. head 2014/ / / / /11 Source: MLA (2015b) Figure 7 and Table 5 highlight that during 2010/11 to 2014/15, vealers were the predominant stock type, comprising 71.7% of the NRLX prime sales stock. This is consistent with the DPI (2006) report stating that store weaners and vealers are key stock classes for the region. Cows comprise 14.7% of the stock classes, with manufacturing steers at 0.1% and bulls at 1.1% comprising the smallest stock classes at these sales. Table 5 provides greater detail regarding sales activity for stock classes, including: total numbers of head sold for each stock class over the five year period 2010/11 to 2014/15; the proportion of each weight range to each stock class sold, averaged over the five year period; minimum and maximum numbers sold in each stock class and weight range and the years that the high and low sales occurred in. There was a greater tendency for minimum sales during the 2012/13 financial year (51.4% of all weight and stock classes recorded their minimum sales for this year), predominantly affecting yearlings, grown steers, cows and bulls. Higher sales activity occurred in 2014/15 and 2010/11 (45.7% and 34.3% of maximum sales recorded for all weight and stock classes for these years respectively). The largest sales for 2014/15 were for calves, yearlings, grown heifers, 520+ kg cows and 600+kg bulls; and for 2010/11 the maximum sales were for 0-200kg vealers and grown steers. 14 Regional Development Australia Northern Rivers

16 Table 5: Prime Sales Trends for Stock Classes and Weight Ranges at NRLX, 2010/11 to 2014/15 Stock class Weight range (kg) Total no. head sold 2010/ /15 Average no. head sold per year during 2010/ /15 Average % weight class sold per year during 10/11-14/15 Minimum no. per weight class sold Year minimum no. sold Maximum no. per weight class sold Year maximum no. sold Total no. stock class sold 2010/ /15 Calves Vealer steers Vealer heifers Yearling steers Yearling heifers Grown steers / / , , /13 2, / ,256 8, , /15 12, / ,115 11, , /14 14, / , / / / / ,100 11, , /15 17, / ,006 16, , /14 22, / , / / / / / / , / / , / / , / / / / / / ,581 1, /14 1, / , / / / / / / / / , / / , /13 1, /11 11, , ,420 6,978 9,805 9,827 Northern Rivers Beef: Industry Snapshot 15

17 Stock class Weight range (kg) Total no. head sold 2010/ /15 Average no. head sold per year during 2010/ /15 Average % weight class sold per year during 10/11-14/15 Minimum no. per weight class sold Year minimum no. sold Maximum no. per weight class sold Year maximum no. sold Total no. stock class sold 2010/ /15 Grown heifers Manufacturing steers Cows Bulls , / / / / , /13 1, / /13 1, / / / / / ,722 2, , /13 2, / ,199 6, , /13 7, / ,138 1, , /13 12, / / / / / , / /15 Source: MLA (2015b) 4, ,059 3,577 Buyer types for the NRLX Prime Sales are predominantly: abattoir purchasers of grass fed cattle, ranging from 64.1% in 2014/15 to 77.6% in 2012/13 of buyer types; and restockers, ranging from 35.4% in 2014/15 to 22.4% in 2012/13. There are very low records of sales to feedlots with 0 in 2011/12, 1 in 2012/13 and the highest amount of feedlot sales in 2014/15 of 217 stock (0.3% of buyer types for that period). A review of monthly sales trends (Figure 8), indicates that sales activity tends to be lower during October to December, with higher sales activity occurring during February to April. 16 Regional Development Australia Northern Rivers

18 No. Head Sold Figure 8: Monthly Trends for Total Number of Head Sold at NRLX Prime Sales, 2010/11 to 2014/ Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Month Source: MLA (2015b) Meat processing The Northern Cooperative Meat Company Ltd s (NCMC) processing facility at Casino NSW is the only export-accredited beef abattoir in the Northern Rivers. Established in 1933, the cooperative has over 1,300 producer and 200 operator members, with three-quarters of its members based within the Northern Rivers region. NCMC is a one of the region s largest employers with over 1,000 permanent and casual staff. NCMC s Casino Service Processing (CSP) operates a custom processing service for its member operators five days a week, with a capacity to process 850 head a day on the beef floor (up to 700kg) and 950 head a day on the veal floor (up to 300kg). CSP processes on average 7,500 cattle per week with approximately 30% of these cattle sourced within the NCLLS region. Almost 70% of NCMC s Casino Service Processing output is destined for export: 7% (including private kills) leaves NCMC as carcasses to local butchers; the rest leaves as boxed (chilled or frozen) beef. All output is for human consumption, with the exception of by-products consigned for pet food, tallow and meat meal. NCMC also owns and operates the Casino Hide Tannery on the same Casino site, which is one of just three wet/blue tanneries remaining in Australia. Beef industry performance Figure 9 shows that total factor productivity for Australian beef farms has trended up from the late 1980s (despite seasonal variations), resulting in average carcase weights increasing by an average of 1.3% per annum (MLA, 2015a). Productivity gains have been attributed to improvements in reproduction, genetic selection and mortality rates. Northern Rivers Beef: Industry Snapshot 17

19 Figure 9: Productivity in the Australian Beef Industry Source: MLA (2015a) Industry performance data at State and National levels in Figure 10 show that the average farm cash income for beef farms in NSW is lower than the national average. ABARES (2015) attribute this to smaller average herd sizes. Recent variations shown below include: drier seasonal conditions in Northern NSW in 2013/14 led to increased cattle sales and a decrease in beef cattle numbers; projections for 2014/15 of higher beef cattle prices despite an expected decline in the number of cattle sold, will be offset by expenses (such as repairs and maintenance, pasture chemicals and fodder), resulting in a decline in income from 2013/14. Figure 10: Real farm cash income, beef industry, average per farm, $ 000 Australia New South Wales p Preliminary estimate. y Provisional estimate. Source: ABARES Australian Agricultural and Grazing Industries Survey in ABARES (2015), p10 The Southern Beef Situation Analysis (MLA/Holmes Sackett, 2014) provides an optimistic formula that suggests an average profit of $17 per hectare per 100 mm rainfall. Based on this formula, average farm profits for Northern Rivers beef producers range from $1,057 for a small 4 hectare/10 acre property to $31,720 for a producer with 120 hectares/300 acres (Table 6). This is consistent with findings by ABARES for average farm income figures for small and medium beef producing farms, which also report that these farms require supplementary off-farm income (Thompson and Martin, 2014). 18 Regional Development Australia Northern Rivers

20 Table 6: Northern Rivers beef producer profit scenarios by rainfall (2013) Beef profits vs rainfall 2013 Hypothetical beef producer profits based on Southern Beef Situation Analysis formula Weather station Rainfall 1 (mm) Area Acres 10a 50a 100a 300a 500a Total for 2013 Average Annual total Rank of 2013 % of annual average Hectares 4.05Ha 20.23Ha 40.47Ha Ha Ha Upper North Coast (district 58) multiplier 2 profit per Ha average profit Ballina Airport AWS 1,967.8 $ 17 $ 335 $ 1,354 $6,769 $ 13,538 $ 40,613 $ 67,689 Byron Bay (Cape Byron AWS) 1,643.2 $ 17 $ 279 $ 1,130 $5,652 $ 11,305 $ 33,914 $ 56,523 Casino Airport AWS 1,346.6 $ 17 $ 229 $ 926 $4,632 $ 9,264 $ 27,792 $ 46,321 Evans Head RAAF Bombing Range AWS 1,565.8 $ 17 $ 266 $ 1,077 $5,386 $ 10,772 $ 32,317 $ 53,861 Grafton Airport AWS 1,381.2 $ 17 $ 235 $ 950 $4,751 $ 9,502 $ 28,507 $ 47,511 Grafton Olympic Pool 1,366 1,083.7 high 126% $ 17 $ 232 $ 940 $4,699 $ 9,398 $ 28,193 $ 46,988 Grafton Research Stn 1, ,003.8 high 111% $ 17 $ 189 $ 766 $3,831 $ 7,661 $ 22,984 $ 38,306 Lismore (Richmond Hill) 1,637.8 $ 17 $ 278 $ 1,127 $5,634 $ 11,268 $ 33,803 $ 56,338 Murwillumbah (Bray Park) 1, ,616.3 high 113% $ 17 $ 311 $ 1,259 $6,297 $ 12,593 $ 37,780 $ 62,966 Yamba Pilot Station 1, ,469.2 avg 103% $ 17 $ 258 $ 1,043 $5,217 $ 10,434 $ 31,301 $ 52,169 Northern Rivers (estimate) $ 261 $ 1,057 $ 5,287 $ 10,573 $ 31,720 $ 52,867 The figures here based on MLA average profit estimate proposed in Southern Situation Analysis and correlated with rainfall data from the Bureau of Meteorology 1. Rainfall: Bureau of Meteorology website accessed 21 July Profit calculator: MLA/Holmes Sackett (2014) Northern Rivers Beef: Industry Snapshot 19

21 Beef markets and supply chain Figure 11 shows that in 2010/11, domestic slaughter comprised the bulk of the Australian cattle market (92%), with 51% derived from the southern beef industry 3 (which includes NSW). Whilst the northern beef industry had a higher level of export activity (in both live exports and domestic slaughter), beef exports and domestic beef consumption are almost equally split for the southern industry for domestic slaughter. The primary markets for the southern beef industry include Japan (29%), United States (18%) and Korea (16%). Figure 11: Australian cattle industry markets, 2010/11 Sources: Gleeson, Martin and Mifsud (2012), pvii 3 The southern beef industry covers NSW, South Australia, Victoria, Tasmania and southern Western Australia, whilst the northern Australian beef industry covers Queensland, Northern Territory and northern Western Australia. 20 Regional Development Australia Northern Rivers

22 The domestic beef market share is dominated by supermarkets (57%), and then split between food service (27%) and specialty retail markets (26%) (Spencer and Kneebone, 2012). The beef share of the fresh meat market decreased from 37.5% in 2013 to 36.4% in 2014, and Australians consumed an average of 27.9 kg beef per person in 2014 (MLA, 2015c). MLA (2015c) identify that the food service beef segment shares include: restaurants (34.9%); cafes (11.3%); clubs (10.2%); hotel/motels (9.9%); quick service restaurant (QSR) chain outlets (9.4%); aged care (5.7%); QSR independent outlets (4.9%); and others (13.7%). A supply chain assessment for the Northern Rivers food industry conducted in 2010 identified (RDA NR, 2011) that: 77.1% of sheep, grains, beef and dairy cattle production is value-added locally, indicating the impact of large processors like the NCMC; the food and beverage manufacturing sector imported approximately 16% of cattle to supplement the local supply; and meat and meat product manufacturing comprised 54% of the region s food industry exports at a value of $292.3M in 2009/10. Conclusion Northern Rivers Beef: Industry Snapshot provides a framework to support beef industry growth and development, including further research and dialogue with the local industry, NSW DPI, NCLLS and other supporting agencies on trends and future directions for the industry in the Northern Rivers. The beef industry has been a major contributor to the economy of the Northern Rivers for over 100 years, and continues to be one of the region s most valuable agricultural commodities. The industry maintains a mix of domestic and export development growth opportunities, is concentrated in the inland parts of the region and is supported by strong supply chain infrastructure associated with meat processing capability. Identification of trends and status in the region has been limited by changes to data collection and reporting boundaries which do not always align with LGA boundaries or the Northern Rivers region. The location of the Northern Rivers at the northern end of the southern beef industry, and just below the northern beef industry means that broader trends for both these industry groupings do not always align to the regional capabilities and characteristics. There also appears to be a wider range of data and information available on the northern beef industry. It is clear from the available data that, over the analysis period, the number of beef properties, total herd and sector employment in the Northern Rivers have declined. With continued competition for land use and property consolidation to achieve economies of scale these dynamics may continue. However, it should also be recognised that even in the face of the challenges above that over the same period the overall value of the industry in the Northern Rivers increased significantly (7.6% annual growth rate) due to a combination of higher prices and increased productivity. Northern Rivers Beef: Industry Snapshot 21

23 References ABARES. (2015). Agriculture, Fisheries and Forestry in the Richmond-Tweed region of New South Wales, 2015, About my region 15.12, Canberra, April. CC BY 3.0. Australian Bureau of Statistics. (2011a) Australian national accounts: State accounts, Catalogue No (accessed June 2015) Australian Bureau of Statistics. (2011b) Census of population and housing INDP 4 digit level, Place of Work (Table Builder) accessed July 2015 AEC Group. (2014). Gross Regional Product Estimates by Industry and Employment Estimates by Industry, spreadsheet prepared for RDA Northern Rivers Eco Logical Australia (2015) Characterisation of the socio-economic landscape of the NSW North Coast region of NSW, Prepared for North Coast NSW Local Land Services Huefner & Associates Pty Ltd. (2012). Casino Regional Livestock Exchange strategic review prepared for Richmond Valley Council Gleeson, T., Martin, P. & Mifsud, C. (2012). Northern Australian beef industry: Assessment of risks and opportunities, ABARES report to client prepared for the Northern Australia Ministerial Forum, Canberra, May. Industry and Investment NSW. (nd). Value of agricultural production data Interactive Spreadsheet, sourced from ABS Agricultural Census , (accessed June 2015) MLA. (2015a). The history of Australian cattle prices since 1970, MLA s Market Information, March MLA. (2015b). Saleyard Cattle Data for Casino Prime Sales, 2010/11 to 2014/15 reproduced courtesy of Meat & Livestock Australia Limited - MLA. (2015c). Market snapshot Australia: Beef May 2015 MLA/Holmes Sackett. (2014). MLA Southern beef situation analysis MLA. (2013). Australia s beef industry: Fast facts 2013 NSW DPI. (2006). Primary industries in the North Coast region of NSW: Strategic review, 2 nd edition. NSW Roads and Maritime Services. (2012). Upgrading the Pacific Highway (Woolgoolga to Ballina Upgrade): Historical (Non-Aboriginal) Heritage Assessment, p.37, cited in Wilkinson (2014) The Richmond-Tweed Region: An Economic Profile, e-brief 11/2014, NSW Parliamentary Research Service. NSW Trade and Investment. (nd). Value of Agricultural Production Data Interactive Spreadsheet, sourced from & Agriculture Census datacubes from ABS CD, (accessed June 2015) OEH. (2011). North Coast Regional History, (accessed June 2015) RDA NR. (2013). Northern Rivers Regional Plan , RDA-Northern Rivers, RDA NR. (2011). Northern Rivers food industry profile: Final report, prepared by AEC Group 22 Regional Development Australia Northern Rivers

24 Spencer, S. & Kneebone, M. (2012). FOODmap: An analysis of the Australian food supply chain, Department of Agriculture, Fisheries and Forestry, Canberra. Stubbs, B n.17, pp.47-48; Select Committee of the Legislative Assembly upon the Meat Industry, Report and Minutes of the Proceedings, part 1 (Sydney, 1972), cited in Wilkinson (2014) The Richmond- Tweed Region: An Economic Profile, e-brief 11/2014, NSW Parliamentary Research Service. Thompson, T. & Martin, P. (2014). Australian beef: financial performance of beef cattle producing farms, to , ABARES research report prepared for Meat & Livestock Australia, Canberra, August. CC BY 3.0. Wilkinson, J. (2014). The Richmond-Tweed Region: An Economic Profile, e-brief 11/2014, NSW Parliamentary Research Service Acronyms and Abbreviations ABARES ABS DPI LGA MLA NCLLS NCMC NRLX RDA NR QSR SEL Australian Bureau of Agricultural Resource Economics and Statistics Australian Bureau of Statistics [NSW] Department of Primary Industry Local Government Area Meat & Livestock Australia North Coast Local Land Services (formerly Northern Rivers Catchment Management Authority) Northern Co-operative Meat Company (Cassino) Northern Rivers Livestock Exchange Regional Development Australia Northern Rivers Quick service restaurant Socio-ecological landscape Northern Rivers Beef: Industry Snapshot 23