The boom that’s sweeping Australia: why beef is the next iron ore

CHINA has its eyes on the outback, and it has nothing to do with iron ore. There’s something else it can’t get enough of.

IT’S been a long time since Charles Wooley saw so many farmers with huge smiles from ear to ear.

The veteran reporter has grown rather more accustomed to telling stories about hard times on the land — the droughts, the tears, the uncertainty.

But on 60 Minutes on Nine on Sunday night, Wooley uncovered the new boom sweeping Australia that’s leaving cattle farmers very rich and very, very happy.

Beef is being hailed as the new iron ore, as Indonesia and the rapidly expanding Chinese market drive up demand for our cattle.

And that demand — coupled with favourable grazing conditions — is turning Top End livestock stations into multi-million dollar businesses.

It’s even been tipped to be as big as the minerals boom.

Wooley told news.com.au he couldn’t remember the last time he saw so much optimism in rural Australia.

“Farming in Australia, especially in the outback, is where the heartbreak is. It destroys families, it destroys lives, it destroys fortunes. Only the banks survive. But suddenly there’s some good news,” he said.

“I haven’t seen such optimism across the Top End for a long time. The Top End has done it very tough and suddenly Asia can’t get enough beef. Everybody is delighted. And that’s nice to report back.”

Australian farmers are selling Brahman cattle for about a thousand dollars each, and about 400,000 have to be produced for Asia between now and Christmas.

Not surprisingly, smart money is jumping into the livestock industry, including advertising baron Harold Mitchell, whose West Australian cattle station, Yougawalla, is a whopping 1.4 million hectares — bigger than some European countries.

Wolley went out to visit the remote station, which Mitchell bought in 2008.

“In 2008 he had 2000 cattle, and you can see how much the market has grown because he’s now running 45,000 and in the next few years he plans to get to 80,000,” Wooley said.

“The carrying capacity is enormous in the Kimberley because we’re not into the wet (season) yet, we’re coming out of the dry, and there’s more feed than the cattle can eat.

“The thing that had made life difficult there was water, but the technology to pull water up from 18 metres down is much better now. It doesn’t cost Harold anything, he’s got solar pumps and they just constantly pumping away using the sun. There are watering points everywhere.”

Mining moguls are following suit. Gina Rinehart recently outbid global and domestic interest in Western Australia’s iconic Fossil Downs cattle station, which was believed to be bought for $30 million, while Andrew “Twiggy” Forrest expanded his pastoral interests in August with the purchase of two stations near Carnarvon.

“The big dough is getting in on it and they say it will be bigger than the mineral boom,” Wooley said.

“Actually, because of that, our national herd next year will be at the lowest numbers it’s ever been.

“So there’s your problem — do you retain the herd in order to breed more, or do you go for the money while it’s available? Because you never know what will happen, with the cruelty allegations and the closing down of the live trade. There’s always a wildcard in there so I think people are saying let’s sell while we can.

“The shortfall then works its way up the market, and that’s why you’re paying so much for beef in Sydney. But that beef is not the same kind of meat.”

Australians generally consider Brahman beef too tough to eat — as Wooley points out, any attempt to barbecue it turns it as tough as leather in moments.

But Asian consumers love it for slow cooking.

Wooley said the big question was whether there was room for smaller family farms to cash in on the demand, or if the boom would only benefit big, corporate farming.

He met one couple who have managed to elbow their way in — Damian and Kirsty Forshaw, whose station occupies a strip from the edge of the Sandy Desert to the Indian Ocean.

“The Forshaws are very happy folk,” he said.

“They’re a lovely family and theirs is only a little family farm — it’s only a half million acres (200,000 hectares), which is small by Kimberley standards, but it’s still bloody huge. They’ve got 5000 cattle but that’s worth millions.

“They got into (cattle farming), lying awake at night worrying about the bank, and all the years of stress and strain, and suddenly things appear good for them and that’s nice.”

But will the good times last? Wooley said the live cattle export issue could complicate matters, and a lot was riding on Australia’s relationship with Indonesia.

And we have seen things go belly-up with the resources boom.

“I’ve reported rural affairs over the years and it’s like mining, it’s either boom or bust — going gangbusters or getting burnt,” Wooley said.

“Drought doesn’t help but we don’t seem to be having a dough in the Kimberley, but I wouldn’t want to be trying to produce a hell of a lot of beef in the southeast at the moment, especially in this El Niño year.

“These animal cruelty issues are always a problem … In the interests of the industry Australia should monitor and encourage where they can practices which are more acceptable to the Australian public.

“But when the country is going well it is reflected in the overall economy, as it will be here. It will take a lot of heat off the economy from the slowdown of the minerals and suddenly you can stop digging into the ground and graze on tip of it, and it’s certainly good news.”

60 Minutes aired on Nine on Sunday night at 8.30pm.