Flood loss flow-on to beef will be enormous

Flood loss flow-on to beef will be enormous


Commercial
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Devastation more far-reaching than documented.

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AS the extent of losses from the horrendous flooding in northern Queensland continues to unfold, the enormity of the flow-on impact to Australia’s beef industry is starting to become evident.

Producers are still in shock and battling to save stock, so decisions about what their options will be and what scenarios might play out are far from fully formed.

It is now evident the devastation is a lot more far-reaching than what has so far been documented. Stock well outside the satellite images of flooding are still dying from exposure and an inability to access food and water.

Around Winton, for example, producers report 80 per cent of their herd has now perished and the tragedy is still not over.

Given the flooded areas are largely breeding country, the loss of at least several hundred thousand calves from the market alone will take the effects of Australia’s drought-fuelled cattle supply shortage out far longer, analysts and industry leaders said.

Market analyst Simon Quilty said the losses have been across all breeds, male and female and covered a wide range of genetics.

“Flood loss is nondiscriminatory and as a result the ability for northern producers to rebuild is going to be very difficult,” he said.

Where southern drought-hit producers are desperately trying to hold onto quality breeding animals to ensure they have some chance of recovering when the drought breaks,  the flood victims have had that option take away, he said.

Bank analysts said it will likely be months before any accurate figures on the number of head lost is determined.

Even experienced producers from the region are hesitant to put a figure on it, given the heavy destocking that happened just prior to the event as many reached drought crisis point, combined with the fact many calves had just hit the ground.

Theoretically, producers will have feed and, those who can afford to do so, will be looking to restock within two months and the likelihood is they will go for young steers to facilitate the fastest cash flow.

That, of course, will put upward pressure on cattle prices.

Mr Quilty said producers unable to afford to restock might lease properties as feed becomes available and the demand from drought-stricken areas should be strong.

Cattle Council of Australia’s northern director David Hill points out there are questions about whether the cattle will be available to buy, even at a high price.

Certainly a turn for the better in the southern season would see numbers become exceptionally scarce and prices go through the roof.

The other great unknown is infrastructure.

“The talk is even with every fencing contractor in Australia up there on the job, there will be  years worth of work,” Mr Hill said.

“I can’t see how some will ever come back from this.

“There will be people will no ability to make money, with no income, for years and years, at the least.

“When something like this has happened in another country, we give overseas aid. This disaster is of that magnitude.

“It’s also fast becoming a humanitarian crisis because there are people who could not possibly get any more desperate.

“At the moment people are still in shock. They have no idea what decisions they will even face or what help they should ask for.”

Processors say they are bracing for the effects of the disaster to be felt down the track.

“Short term we must look after the affected farmers,” Australian Meat Industry Council chief executive officer Patrick Hutchinson said.

“However, governments - both state and federal - must now also look at the medium to long term effects of the loss of these cows and calves on the rest of the supply chain,” he said.

“Potentially from gate to plate thousands of jobs will be impacted.”

It’s probably not so much the shortage as a result of those specific cattle being lost to processing, but a big contributing factor to the ongoing ability of producers to breed and finish stock over a number of seasons, others in the processing sector said.  

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