Year in review 2016-2017, Northern Territory Cattlemen's Association
Northern Territory Cattlemen's Association yearbook; Reports; PublicationNT
Made available via the Publications (Legal Deposit) Act 2004 (NT).
Livestock -- Northern Territory -- Periodicals; Beef cattle -- Northern Territory -- Periodicals; Ranches -- Northern Territory -- Periodicals
Northern Territory Cattlemen's Association
Check within Publication or with content Publisher.
My brief from Tracey when she asked me to speak today was to try to answer the question Are we in a beef price boom?. In any event, whether were in a boom or not, weve got more cash or working capital in the system now, so another question is: how should that be allocated rationally for the best chance of being prosperous in the future? In my view, the latter is probably the more important question, because for every business manager, or CEO of a public company, the rational allocation of capital is one of the most important things that you can do. Graph 1 (pg 60) shows the average price of all Australian beef (dressed weight). I update these data every six months or so and it goes all the way back to 1949. Theres few things to point out here before we get into the detail: 1. The data actually goes up to December 2016 (2016 is just not listed on the bottom line) 2. Ive taken inflation out; the price is at the value of the December 2016 AuD. This is an important principle to know: whenever you look at data thats more than 3, 4 or 5 years old you need to take inflation out, otherwise the data can be very misleading. A lot of work went into easily determining the average price across all of Australia, and its too difficult to do it every time you want to get a price point. The best defacto of the average price of all beef across all regions in Australia is the JapOx price. There are some big events on this graph, and these happen about every 70 years or so in agricultural markets some of you in the room who are as old as me will have lived through the downturn that you can see on this graph and, as you know, it was not pleasant at all. Before we look at the next set of data Id like to point out a little known fact: at least 75% of the total business EBIT in any decade will be generated in only 3 of those years. SPEAKER NTCA INDuSTRY CONFERENCE 2017 Positioning for Prosperity-Is it a beef boom and will it last? Dr Phil Holmes HOLMES & COMPANY Dr Holmes is the principal of Holmes & Company, a NSW based firm providing business advice to corporate and family owned farm businesses throughout Australia. Dr Holmes special interests are commercial beef and sheep production, agricultural sustainability, finance, and sensible wealth creation through investing. Dr Holmes is a hard-line disciple of the evidence-based school of thinking and strives for that approach to dominate debate on Australian agricultural issues. 58 NTCA YEAR IN REVIEW 2016/17