Regulation lifts costs

By Country News

Total operating costs associated with processing beef cattle in Australia were almost one-third higher than in the United States, almost 73 per cent higher than in Brazil and almost 45 per cent higher than in Argentina in 2015-16, according to a new report.

The Australian Meat Processor Corporation report, which was released last month, said the reasons for the disparities were because of Australia’s regulatory burden, something that accounted for 54.1 per cent of the costs ($195.21 of $360.62 per head) incurred when processing meat in the country during that period (2015-16).

This was well above the regulation figures of Argentina (43.4 per cent of $205.96 per head), Brazil (35.6 per cent of $172.29 per head) and the US (30.8 per cent of $290.15 per head).

Compared to the US and Argentina, Australia’s higher prices can be explained by costs being subject to a significant level of government regulation and much higher regulatory costs, respectively.

When compared with Brazil, higher certification and labour-related costs were the difference.

The report also compared export figures of the four countries, with Brazil topping the list.

Of the four countries examined, Brazil exported the highest quantity of beef in 2017, about 1.76million tonnes; Australia was the second-largest exporter at about 1.45million tonnes.

In the same year, the United States exported 1.29million tonnes of beef while exports from Argentina were significantly lower, at 0.28million tonnes.

Despite these figures the report insisted that looking at these figures alone did not tell the whole story.

‘‘However, examining the total volume of exports in isolation does not reflect the overall importance of the beef processing industry or the beef cattle farming sector in a given country,’’ the report said.

‘‘Beef exports from Brazil represent 18.6 per cent of the country’s total beef production whereas in Australia more than 68 per cent of beef produced is exported.

‘‘The quantity of beef exported from the United States represents only 10.6 per cent of beef production and the country is a net importer of beef.’’