Gross margins for NSW beef enterprises from 1999-2010

Erratic rainfall and rapidly changing world markets have led to volatile stock prices and variable returns to beef producers in recent years. Many producers have subsequently reviewed their choice of enterprise or management system and so an examination of long-term markets is useful when contemplating or advising on possible changes. A comparison of selected beef enterprise gross margins from 1999-2010 indicates that producers supplying markets with tighter supply specifications were generally rewarded with higher returns. For example, EU producers are obliged to maintain rigorous records, subjected to audits, and need improved pastures in order to produce heavy, finished, young cattle. Accordingly, returns in that enterprise have often been among the highest. Conversely, returns from weaner production were, on average, the lowest of those presented. There are no specifications for weaners; they can be produced from all classes of land and many producers revert to this production system during droughts or to realise quick returns. Note that rising input costs and variable market premiums have recently impacted most enterprises.