Ignore South America's beef industry at your peril - 21 November 2005
Monday, 21 November 2005
The vast areas and size of Latin American agricultural industries and their increasing ability to compete in international markets mean that Australian beef producers ignore their South American counterparts at their peril.
Brazil has become the world's third largest agri exporter, after the European Union and the United States, while Argentina now ranks seventh and is closing in on Australia in sixth place."
Brazil, for example, is the world's largest exporter of beef, coffee, orange juice and sugar and is closing fast on the leaders in pork, poultry and soya. It also produces the cheapest sugar and orange juice around the globe and still has land available for production.
These were some of the discoveries from a group of 33 producers* who have just returned from a three-week tour of Brazil, Argentina and Chile co-ordinated by the National Australia Bank (NAB).
During the trip the group visited stud and commercial operations, feedlots, saleyards, abattoirs and experimental farms, and held meetings with South American producers.
NAB Head of Agribusiness Northern Australia, Wayne Carlson, said it was an incredible opportunity to see the competition first hand.
"The thing that struck us most was the potential that's sitting there, in Brazil particularly, and it's scary to think of the impact that will have once it's realised," Mr Carlson said.
"Brazil has taken on the world - and is winning - in industries such as coffee, sugar and soya beans, so Australian beef producers can't afford to take their eye off the ball. After just 15 years of growing soya beans, for example, Brazil now produces 40 percent of the world's crop."
The tour found that the strategies and directions in each country visited were very different.
Chile is a net importer of beef at the moment, but is looking to grow exports of high value product and replace it at home with cheaper imports.
The industry in Argentina is keen to grow exports to increase farmers' income, but is battling government pressure to keep domestic beef prices low.
In Brazil, infrastructure is the key challenge at the moment, with poor roads and practically non-existent rail systems. Recent outbreaks of Foot and Mouth Disease (FMD) are also affecting Brazil's beef exports.
"It's slowing them down, but everyone in the industry is aware of how important Brazil is becoming in the global beef market," Mr Carlson said. "They have 180 million head of cattle compared to our 25 million; low labour costs; soils, climate and rainfall that many of us can only dream about; and around 90 million hectares of under developed land.
"They're working hard on better pasture management that will see even better use of the land that's already available, and have huge volumes of grain available for the still developing feedlot sector.
"One of the farmer co-operatives we saw, COAMA was an unbelievable operation that's vertically integrated from the paddock to the market overseas. It started with 79 farmers in 1989 and now has 18,000 members and annual turn-over of $6 billion.
"This sort of organisation and focus are going to make Brazil a powerhouse as they increasingly improve their activities," Mr Carlson said.
The beef study tour was run in conjunction with ANF Agritours. The majority of the participants were from Queensland, but most other states were represented.
*Photos of the group in South America are available on request. Many of the producers are also willing to talk to media.
About NAB Agribusiness
The National Australia Bank (NAB) employs more than 550 agribusiness banking specialists at over 110 regional locations Australia wide. The Agribusiness team at the NAB is a leader in providing agribusiness banking services to Australian rural businesses, agriculture, forestry and fishing industries. It serves customers across Australia ranging from small family farming enterprises to large multinational operations.
For further media information, please contact:
NAB Australia Corporate Affairs
Guy McKanna
Tel: (02) 9237 9817
Mob: 0402 893 843
* The information contained in this media release is for media advice purposes only. The contents are true and correct at time of publishing/issuing, however may change over time. For further information about NAB products or rates, please go to Interest Rates, Fees & Charges
