Production efficiency

Livestock industries operate in an internationally competitive environment with changes in currency value and terms of trade affecting the competitiveness of industries in export-oriented countries. For example, Australia's share of the Japanese and South Korean beef markets has been under intense competition from the USA since 1986 (Bindon and Jones 2001; Chapters 4, 8, 11). Beef market share is impacted by prices of other meats, animal protein substitutes and changing consumer preferences. Input costs for intensive beef producers increase with any expansion of the crop-based biofuel sector. Traceability, food safety and animal welfare concerns add costs to the industry without necessarily bringing greater returns. For example, if exporting South American countries are free of foot and mouth disease they can compete more for Australian beef markets in Canada and Taiwan. These and other challenges are best met by production efficiency improvements to ensure the continuing economic viability of the beef industry. Increased productivity (a measure of the efficiency of the production process) reflects the ability to produce more goods and services (outputs) given available resources (inputs) (Chapter 20). Production efficiency gains are usually achieved through lowered costs and/or higher outputs, thus greater profit margins for the producer. Whether market or feed prices are high or low, production efficiency largely determines the magnitude of farm profit or loss (Chapter 20).