Mark McGovern writes in The Conversation (29.7.16) about the financial problems besetting Queensland’s beef industry, suggesting what the sector and the state government can do to alleviate the debt burden on cattle businesses and others in the agrictural industries.
‘What will happen now that the rains have come to many parched beef lands of Queensland? Current high cattle prices and renewed pastures suggest optimism, even good times. Perhaps record exports from the world’s largest beef exporter? If only if was that simple.
‘While an important indicator of Australia beef prices peaked recently, analysts warned export volumes were likely to fall.
‘High prices for Australian meat has already seen Chinese imports down this year by 30% and US imports down 40% (largely correcting a recent Australian trade gain).
‘… Indeed, investigations reported by the Queensland Rural Debt and Drought Taskforce show extremely high levels of financial and personal stress. Key financial ratios are in disarray for many enterprises, small and large, family and corporate. Speculating on near-record cattle prices can, at best, buy a little time.
‘Most worrying are the inadequacies of income to service very high and rising levels of debts, secured by properties that have halved in values. A debt-deflation spiral is clearly underway.’