Australian and international farm policy news

Municipal policy affects Canadian feedlot costs of production

Lethbridge County situated in Alberta, Canada has introduced a municipal tax for beef operations producing 150+ cattle for slaughter, annually. In the heart of feedlot country, the tax of US$3 per head has been introduced for intensive agricultural operations to assist to maintain and repair roads and bridges within the municipality. Lethbridge country has the capacity to deliver 500,000 cattle per annum. The Alberta Cattle Feeders Association (ACFA) is concerned about impacts to cost of production and competiveness at a global level. This area in Alberta is nicknamed ‘feedlot alley’ and it is the first municipality in Canada to introduce such a tax, with some places in the United States (US) having similar levies. This is an interesting solution allowing local authorities to raise revenue from high-users of local infrastructure, when seeking additional revenue to cover shortfalls.

Russian biosecurity concerns

The Russian pork industry has been disrupted by two outbreaks of African swine fever (ASF) during September. With a lack of medication along with lack of investment on biosecurity procedures and disease control systems by one of the main pork companies. Unfortunately for the company in question, it culled large numbers of pigs from the first outbreak, reported to be 20,000 pigs. Russian President Vladimir Putin’s plans for his nation to be a self-sustaining meat producer, may be hindered. The reaction in Eastern Europe has seen some tightening of regulatory rules concerning pigs with attention on small pig farms. Australia can learn from this, the importance of biosecurity, particularly at the hands-on level, demonstrating that the ability to observe breeches early and react is vital.

Common sense prevails with Australia’s backpacker tax

Many Australian farmers breathed a sigh of relief, when the Federal Government dropped the backpacker tax rate from 32.5% to 19%. Although it might already be too late for coming season labour requirements, with the damage from the concept of the increased tax deterring potential backpackers from coming to Australia as a working holiday destination, and a number of other countries competing for the same workforce. It prompted the government to announce $10 million fund for the tourism sector to promote backpacker jobs. In addition, there have been visa changes which increase the age limit on working holiday makers from 30 to 35, which is positive. However, many farmers are frustrated with the extra red tape of superannuation tax, which is cumbersome for farmers to administer and doesn’t seem to benefit the employee or employer. At the end of the day the issue for Australian farmers was security of labour, which effects on-farm productivity and profitability. The Australian Government won’t miss out on revenue, increasing the Passenger Movement charge (departure tax) for departing travellers by $5.

No improvement for US corn prices, although farm returns are set to increase for 2016
12 months on, projections of grain farm returns in Illinois are estimated to be in the US$30,000 to US$40,000 range, which doubles last year’s (2015) projections of US$15,000 per farm (University of Illinois). Corn continues to hover around US$3.30 per bushel (from US$3.80 per bushel in 2015). So how can you explain the increase in farm returns? Firstly, through reductions of non-land costs, mainly fertiliser costs; and secondly, higher yields for both corn and soybeans have been predicted. Soybeans look like they will have record-setting high yields – although forecasts for 2017 aren’t too bright – with large yields indicating large supplies, which equates to lower 2017 prices.

Image:  Stephan Ridgway