Queensland may be renowned for perfect beach weather, but its climate can be as extreme as it is serene – as Aussie farmers know only too well.

Five years ago, huge swathes of Queensland farm land were covered in flood waters that drowned crops, livestock, and farmers’ spirits.

In a cruel twist, many of these farmers are now battling one of the worst droughts in memory.

In just two years, pastures have been depleted for most of Queensland’s 11.5 million beef cattle – just under half the national herd.

Most cattle farmers (graziers or beef producers in Australian terms) in Queensland rely on rain from November to March to grow native grasses and fill creeks, rivers and dams.

In 2012-2013, this wet season was virtually non-existent. Below-average rainfall through winter, spring and summer reduced pasture and crop growth in all states of Australia. These conditions continued through 2013-2014, pushing around 80% of Queensland, 40% of the Northern Territory and many areas of Australia’s other beef-producing areas further into drought.

In such a widespread drought, options are limited.

There was very little grazing land for lease. Even if there was, the vast distances in outback Australia, combined with regulations which limit the time cattle can spend in transit, can make moving cattle to greener pastures cost-prohibitive.

Individual farms (properties or stations) run thousands, even tens of thousands, of cattle. Buying hay or grain to sustain these numbers is costly. Some farmers in severely dry regions like central-west Queensland are still paying $1,000 (€702) a day to buy feed to keep cattle alive.

For the majority, the only option has been to sell their cattle.

And sell they have.

Record numbers of adult cattle passed through Australia’s marts (saleyards) in the past two years: 8.3 million head in 2013 and 9.2 million in 2014. To put that into perspective, cattle sales usually average 7.7 million head a year.

Meat and Livestock Australia (www.mla.com.au), the equivalent of Ireland’s Meat and Livestock Commission, said that this is the highest since 10.3 million head were sold in the 1978 drought.

Farmers whittled their herds back to core breeding stock and many had to sell this precious genetic capital.

With breeder cows sent to slaughter and fewer younger cattle purchased as replacements (because pasture was not available), cattle were snapped up by processors.

Average prices for trade steers (330-400kg) dipped to as low as A$1.70/kg (€1.19/kg) live weight, which is 35c/kg lower than where they were before the drought commenced. In comparison, the average export price for beef in 2014 was $5.77/kg (€4.05/kg).

Trade opportunities

In the 1970s drought, cheap beef flooded the domestic market. However, today, 70% of Australian beef is exported, which has absorbed the increase in processing.

This hungry global red meat market is Australia’s saviour, according to Angus Gidley-Baird, a senior analyst for animal proteins with the Australian and New Zealand arm of global agri-bank, Rabobank (www.rabobank.com.au).

“It’s been a challenging two years for Australian farmers, but the outlook for our beef industry is very strong,” Angus said.

“Major markets have opened up for Australian beef with the signing of Free Trade Agreements with China and Korea in late 2014.”

When fully implemented, the China-Australia FTA has potential to boost beef production in Australia by $270m (€189m) a year by 2024.

“Australia’s US market is also expanding, with demand for higher volumes of lean beef at record prices. Although the EU remains a premium market, it is limited by quotas, so these other markets have stepped in to absorb the excess beef being processed in Australia.”

Looking ahead, Angus said Australia’s beef industry will watch with interest to see what follows the recent approval of Irish beef processors by the US, as these developments in trade discussions between Europe and the US could have implications to Australia’s EU quota.

Meat and Livestock Australia’s manager of market information, Ben Thomas, said Australia currently exports 25,000 tonnes of beef a year to the EU. The UK is Australia’s biggest EU market, taking nearly half (10,600t), followed by Italy (6,600t) and the Netherlands (4,800t).

“If positive seasonal conditions prevail, the sharp decline in cattle for sale (as farmers restock their properties) will translate to a decline in beef exports,” Ben said.

“However, this will mainly be evidenced in the price-sensitive markets of south-east Asia, the Middle East and north Africa.”

Quietly optimistic

Grant Maudsley, a Queensland beef farmer and president of that state’s agriculture lobby group, AgForce (www.agforceqld.org.au), said drought has pushed up debt levels as farmers borrow against the equity of their farm to pay bills.

“Rural employment has decreased because producers have had to let staff go,” Grant said.

“Many farming families who send their children to city boarding schools because there are no local education options, have had to pull children out because of cost pressures.”

With Queensland on the brink of a state election (31 January), AgForce is urging the government to continue providing drought relief financial packages and incentives for younger farmers, such as exemptions from stamp duty for intergenerational transfer of farms and a first farm buyers’ grant.

Another Queensland farmer, Brent Finlay, brings a first-hand perspective of drought to his role as president of Australia’s National Farmers’ Federation (www.nff.org.au).

Brent, who met Irish Farmers Association president Eddie Downey and spoke to farmers at Slane about the Australian drought while visiting Ireland in June 2014, is concerned about the human toll from drought, such as rural suicide.

“Many properties still have no grass, no surface water, their herds are decimated, the cashflow is all outgoing, many are borrowing against the equity of their farms,” he says. “Some farmers have even had to shoot cattle who were too weak to survive. The reality is, when everything they love – their land, their cattle – is being destroyed, the emotional cost is too much for some.”

He said Australia (along with New Zealand) has the lowest level of government support for farmers in the OECD, but farmers can access low-interest loans as part of the Australian Government’s drought support package.

In December 2014, one Australian financial institution, the ANZ bank, introduced a 12-month moratorium on forced farm sales in areas of crippling drought throughout Queensland and New South Wales. There is public pressure on other banks to follow suit.

Against this backdrop, Brent remains “cautiously optimistic” for the industry, thanks to international demand, the A$ easing against the US$ and improved seasonal conditions which will allow the national herd to be rebuilt.

While the Australian Bureau of Meteorology’s (www.bom.gov.au) seasonal outlook is for a drier February and March, there has been patchy rain in drought-stricken areas.

In response, prices rose at the first cattle sales of 2015. Australian cattle prices are benchmarked using the Eastern Young Cattle Indicator (www.mla.com.auURL), a seven-day rolling average expressed in cents per kilogram of carcase (dressed) weight. Last week, the EYCI was up 4.5c.

(Figures: Australian Department of Agriculture, Rabobank, Meat and Livestock Australia)

DROUGHT TALK

Rick Britton (see right) is a quintessential western Queensland beef producer. He wears a big hat, owns half a million acres (about 200,000 ha) and nearly every sentence is punctuated with a cheerful “mate”.

In a good season, Rick and his wife Ann run 6,000 Droughtmaster (a breed developed in Queensland) and Santa Gertrudis cattle on seven properties in the western Queensland shire of Boulia, 1,700km from Brisbane.

Rick is the mayor of the shire, all 61,000 square kilometres of it. The agricultural area belongs to 37 land owners and the entire shire is home to just 400 people.

The Britton’s home property, Goodwood Station, has a 225mm annual rainfall, but has experienced below average seasons for most of the past 14 years.

Their unique landscape relies on indicator storms in February to prepare the naturally tree-less Mitchell grass downs for the main rain in February. However, in 2013 they received just 53mm for the entire wet season, and only half the annual rainfall (114mm) in 2014.

The Brittons rely on strict cattle management strategies to remain viable during drought and protect their land.

They conduct quarterly feed budgets to match available pasture to stock numbers and the seasonal outlook, and make selling decision based on this. Rick chooses to destock rather than retain and feed cattle during drought, to protect the fragile landscape.

“We run all our cattle in age-groups, so when we have to destock we can just muster in a paddock at a time,” Rick explained. “For example, we start by selling breeding cows that are in the eight- to 10-year age group, and then work down from there.”

Economically, the Brittons can reduce breeder numbers to 1,500 and still remain operational. By the end of 2013, they reduced the cow herd to 2,800 head but took advantage of patchy rain in late 2014 and lifted numbers back to 3,700 females.

“This gives us the opportunity to sell heifers to other producers who are rebuilding herds thanks to better seasonal conditions,” Rick explained.

Boulia is in the Channel Country, meaning rain that falls upstream will make its way to Goodwood Station ancient flood plains. Last year, 100mm of rain, which fell 150km away, came down the channels and flooded 7,000ha of the Britton’s property – giving them grass to fatten bullocks on.

Although the seasonal outlook through to March is dry and hot, Rick remains positive. When we spoke to him, he had just finished a day replacing 4km of fenceline in 45°C heat, but with plenty of green grass around thanks to rain in December, he had a smile on his face.