Double B Beef explores ways for producers to minimise risk

June 28, 2008

Double B Beef held another very successful Risk Management Day last Tuesday at the Bingara Returned Servicemen’s Club.

About 60 people attended to hear a range of speakers including world renowned farm management consultant, Terry McCosker from Resource Consulting Services. Terry spoke about making the most of the rainfall that falls. This issue is becoming increasingly critical to farm management, as all the forecasts point to heavier falls of rain less often.

Depending on the kind of vegetation management in the paddocks, farmers can lose up to 83% of the rain that falls, either through simple run off or evaporation.
By maximising the soil’s potential to absorb water, soil moisture profiles remain fuller for longer. Terry suggested that healthy grasslands can absorb up to 75% of rainfall.

Terry told the gathering that to counter the effects of climate change, farmers need to increase water efficiency, improve the water cycle, increase the utilisation of the available feed while matching stocking rate to carrying capacity.

One of the conclusions those present were encouraged to accept, is that ecological health drives gross margins. Terry also spoke about the progress to date in carbon credits, as they relate to agriculture.

Joff Cannington from Rabobank in Moree covered some of the financial risks to cattle producers while congratulating Double B Beef on its marketing arrangements, saying “You are way ahead of the wheat growers, who now need to establish the kind of arrangement that you have with OLM.”

Joff delivered the message that producers must have a strategy and that it should be followed with discipline while maintaining monitoring and accountability. He talked about interest rates and the falling American dollar as well as principles to follow when borrowing money.

Mark Thompson from C&W Partners in Moree spoke about the benefits of Testamentary Trusts in estate planning which can minimise taxes paid upon death, as well as safeguarding the inheritance against interference from outsiders.

Pete Mailler, who is a grain grower as well as a beef producer gave a run down on his views of grain for feed versus grain for fuel. Pete asserted that ethanol research and development is focussed on cellulostic technologies rather than grain.
He suggested that the most efficient biofuel factories on the future will be based on algae.

Pete also warned producers that social expectations for cheap, safe food are a major challenge for agriculture. He said that “we will be regulated into a corner, if we’re not careful.”

Objective Livestock Management principal, Danny Wilkie described the world market for beef and how currency changes have affected Australian beef producers and their competitors.

Of interest to those present was the fact that the Eastern Block countries are starting to import significant quantities of Australian beef alongside the growing importance of the European Union market for Australian producers.

With regard to Australian beef producers’ competitors, Danny said that the lack of traceback infrastructure in Brazil has “sunk” them as far as the EU goes, as there are only 80 accredited properties in the country.

Argentina is not a threat at the moment, as the government there has imposed bans and limitations on beef exports to keep the cost of living down.

All the speakers contributed to a rewarding and informative day for the participants.