IN just a little over two months' time it will be 49 years since the event that shook the beef industry to its very foundations inflicting economic devastation on the production and processing sectors and all manner of associated service industries.
On October 6, 1973, Syria and Egypt launched a surprise attack on Israel (the Yom Kippur War). Six days later, President Nixon authorised the delivery of arms and equipment to Israel while the Soviets were similarly supporting Syria and Egypt.
On October 16, OAPEC (Organisation of Arab Petroleum Exporting Countries) raised the price of oil by 70 per cent to more than $5/barrel.
In the days following, OAPEC cut production by 5pc; Nixon raised the stakes with a massive $2.2 billion of military assistance for Israel which in turn prompted OAPEC to respond with a total embargo on shipments of oil to the United States and pro-Israel nations Canada, Japan, the Netherlands, United Kingdom, and later to Portugal, Zimbabwe and South Africa.
The price of oil rose by nearly 300pc to almost $12/barrel.
This oil shock, as it was termed, drove the world's economy into the steepest economic contraction since the great depression.
Japan was hit particularly hard because it imported 90pc of its oil from the Middle East.
There and elsewhere rationing and restrictions on industrial oil and electricity caused economic growth to plummet.
Prior to these events, increasing per capita income in Japan had led to increasing domestic demand for beef.
To accommodate this, the Japanese government allowed a gradual increase in the imported beef quota through the 1960s and 1970s.
In 1973, against a background of record prices in the domestic market, the Japanese government raised the total quota to 160,000 tonnes in an effort to hold down prices.
The heightened volume of imports drove down domestic production and while this may have been manageable in its own right, the timing of the oil shock exacerbated the issue.
The Japanese farm sector had strength through its vast co-operative structure and the pressure brought to bear on the government resulted in closure of the market to imported beef throughout 1974 and half way through 1975.
Japan at that time was our second largest export customer accounting for almost 20pc of total Australian beef exports.
The impact of this market loss was exacerbated by the sheer size of the Australian herd which at the time was rising to the 1976 peak of 31.8 million head.
Unfortunately Australia's largest market, the US, was also approaching peak herd of 132 million head in 1975 so domestic production there was a limiting factor on how much imported manufacturing beef was needed.
Meanwhile, in an attempt to encourage growth, Western central banks followed orthodox macroeconomic principles with sharp cuts to interest rates believing that inflation was a lesser concern.
The resulting stagflation shocked the orthodoxy and is credited with lengthening and deepening the recession.
Global demand for beef was unavoidably affected.
George Birch was at the coalface, having moved from Vestey's Darwin to Riverstone Tenterfield as livestock manager in January, 1974.
While the first sale he attended took a hit, George said the slump was not precipitous but rather a steady decline throughout 1974 as illustrated in the following recollection.
Around March 1974, a bullock producer in the border region had a very handy and sizeable line on offer to Tancreds at $42 per 100lbs dressed weight.
However 3-day sickness intervened and rather than split the mob he declined the offer.
When the sickness had passed the best George could offer was $39/100lbs. That offer was also rejected. Twelve months later, with the bullocks considerably overweight and over-fat, a sale was negotiated at $11/100lbs.
George's recollection is that the slump bottomed out in 1975-76 and by 1978 was starting to pull out.
He can recall sales as low as $9/100lbs for bullocks and $4/100lbs for over-fat cows.
Store cattle were also piteously cheap.
In 1975 he bought good quality 3yo Hereford store bullocks at Mungindi for $18/head.
But there was the odd positive story.
Brigalow producer and avid carcase competition supporter Syd Vellnagel told me in the late 1970s that despite the falling market in 1974 he had been able to make some money from turnover cattle because the quality of his country lessened the hold time, thereby keeping weight gain ahead of the falling rate.
The agency sector was hard hit as Warwick independent agent Don McGuinness commented at the time, "The more cattle we sell the more money we are losing."
By early 1975 livestock salesmen and auctioneers were being let go by the pastoral houses.
A lot has changed since those days but substitute oil for gas and some striking similarities emerge between Yom Kippur and the Russian invasion of Ukraine.
In the run-up to 1973, industrial countries in the West were heavily dependent on cheap oil from a politically unpredictable source.
In recent times Germany in particular and Europe generally has become similarly dependent on Russian gas for both industry needs and domestic heating.
In 1973 the Arab oil states imposed an oil embargo on the West. This time around the West has imposed a partial embargo on itself in the way sanctions have been applied to Russian gas only to have that situation compounded by Russia imposing a flow restriction on the main supply pipeline to the West.
The 1970s shock needed a response from central banks to try to avoid a global recession.
But the easing in monetary policy did not prevent GDP from falling and adversely contributed to runaway inflation.
The Feds in the West are again confronted with the same dilemma but still only have the same monetary policy tools to work with.
If they maintain focus on inflation and tighten monetary policy they risk recession but the alternative might result in much higher inflation without getting the necessary boost to growth to avoid recession.
For the sake of the beef industry, let's hope they pull the right lever.
