Australian lawyer plays down 1974 comparisons - leatherbiz: Leading ne Leatherbiz

News

Australian lawyer plays down 1974 comparisons

13/05/2013
Norman Hunt, a Sydney-based solicitor who is a recognised lobbyist for reform of Australia’s beef industry, has played down speculation that the situation in the country’s beef cattle industry today is as bad as that of 1974 when Australia experienced an industry decline that came to be called the Beef Slump.

In recent comments, Mr Hunt agreed that the current Australian cattle herd of around 30 million head is the highest since just before the 1974 crash. But he said that while the current crash in Australian cattle prices is largely attributable to drought, cuts in live cattle exports and the high value of the Australian dollar in currency exchange markets, 1974 was a “legendary” year in Australia for rainfall, with widespread flooding, but also easy access to feed for cattle.

Another difference is that in 1974, the US had a herd size of 130 million head, compared to 92 million at the moment. High numbers on home soil led the US to stop importing cattle from Australia at that time, whereas this year Australia has not yet filled its quota of exports of beef to the US. And although the Australian dollar is worth more today (around $1.03) than in the 1990s, it was at a much higher exchange rate at the time of the Beef Slump (around $1.20)



Conversely, 1974 was a legendary rainfall year with widespread floods and a massive season Australia-wide, hence many producers were able to hang on to their cattle when the price crash first struck.

In 1976, the then fixed A$ traded at $1.20 to the US$, but in 1996 the floating A$ was worth US$0.77 and today, sits at US$1.03.

“In 1974, the US had 130m head of cattle compared to its current herd of 92m, Mr Hunt said.

“The 1974 cattle price crash was largely the result of America ceasing to import beef from Australia. This year Australia has not yet filled its US beef quota,” he said.

Mr Hunt concluded that the time may have come for a rethink of the organisational structure of the Australian beef industry and government policies on beef, notably with regard to exports to countries such as Indonesia. But he said there were grounds for optimism too.

“In 1974, the US was in recession and Australia was facing an economic slowdown,” the lawyer said. “In 2013 the US is coming out of recession and Australia has been enjoying economic growth which, while slower than the early part of the century, remains the envy of the world.”




Leatherbiz.com cannot be held responsible for content if the language setting is changed from English.

The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.