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IFCN Beef International Farm Comparison Network

IFCN Beef Team. IFCN Beef International Farm Comparison Network. Oklahoma Agricultural Leadership Program International Seminar February 20, 2004. We are not in the middle of nowhere. We do not live on an island. World Population. If we keep on accelerating. 0. 1000. 2000.

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IFCN Beef International Farm Comparison Network

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  1. IFCN Beef Team IFCN BeefInternational Farm Comparison Network Oklahoma Agricultural Leadership Program International Seminar February 20, 2004

  2. We are not in the middle of nowhere

  3. We do not live on an island

  4. World Population If we keep on accelerating ... 0 1000 2000 we should perhaps have a good navigation system. It shall provide information about the development of production systems productivity productioncosts in all important agricultural regions of the world. Everything under Control? The International Farm Comparison Network (IFCN) shall be part of a global navigation system for agriculture.

  5. What is IFCN? TheInternational Farm Comparison Network is an international network of scientists, advisors and farmers. Objectives • to develop a sustainable information system • to create a better understanding of agriculture.

  6. IFCN - fields of work A world wide long term project Production systems Production cost Impact of policies and changing markets Analysis of technological change Analysis of farm strategies

  7. IFCN - operating branches Dairy Beef Arable crops Starting year 1997 1999 2001 Annual yes noyes Report 00/01/ 02/0302/03 No. countries / partners 02 26 11 14

  8. Participating countries 2004 Contacts for further growth Spatial distribution of IFCN - February 2004 Share of IFCN-countries in - world milk production: 75% - world beef production: 50%

  9. The Institutions in the IFCN 1 IFCN Center both located at FAL ground FAL: Scientific lead by public funded institution IFCN management by private companies 2 Research partners in the countries Universities Research centres funded by the government Beef institutions (Beef Board, Farmers Unions) 3 Customers Agribusiness companies Policy makers Beef institutions in the countries

  10. IFCN-methods: the concept of typical farms What is a typical farm • Comparison typical vs average meal in a country Typical farms • Selected in terms of size, production system and contribution to the total production of the country / region • Virtual models based on existing farms • Full set of economic and physical data Three sources of data • Panel of farmers • Statistics available • Expert knowledge of the IFCN researcher + advisorsCrosschecking input data with economic results

  11. Methods: TIPI-CAL TIPI-CAL is a simulation model [ Technology Impact and Policy Impact Calculations ] • Production and accounting model • Whole farm level and enterprise level • Excel-Spreadsheet • Pure simulation without algorithms or optimisation • Deterministic, recursive (presently becoming stochastic) • ‘Shareware’ for IFCN partners and clients • Basic model and additional modules for cost analysisand data management

  12. Examples of IFCN research results 1 International Farm Comparisons Cost of beef and milk production world wide Cost component analysis for wheat DE - US 2 Baseline projections - 10 year forecasts 3 Farm strategy analysis DE- Milking robot vs. parlour systemConversion from conventional to organic farming 4 Policy analysis EU - Mid Term Review / Agenda 2000 EU - Abolish Milk quota - study incl. Farm adjustments 5 Other studies using the network Analysis in the beef/dairy chain- farmers - consumer milk prices

  13. 66 % 58 % 58 % 85 % The world of beef (3 years averages 2000-2002) Percentage share of regions in ... Region Inventories Production Export Import (Head) (Volumes) (Value) (Value) EU-15 6 13 5 7 North America 8 24 42 27 South America 23 21 16 3 South Aisia 20 4 1 - Far East 11 11 2 12 Japan - - - 27 Oceania 3 5 27 - Africa 15 7 2 3 Former USSR 4 7 2 5 Rest 10 8 3 16 World 100 100 100 100 Source: FAOSTAT

  14. CA 1.249 EU 7.461 PK 386 480 RU 1.890 CN 5.128 376 US 12.234 NA 58 IN 1.456 1.425 MX 1.429 NZ 593 BR 6.754 AR 2.688 UY 442 AU 2.021 World beef production- Average 2000-2002 World Beef meat 56.582 Buffalo meat 3.056 Values in 1.000 t Source: FAOSTAT

  15. World beef trade in values- Average 1999-2001 * Value of imports / exports of the following items: Meat of bovine animals, fresh, chilled or frozen, with bone in; beef and veal boneless; beef dried salt smoked; beef preparations; homogenised meat preparations; sausages of beef and veal; fresh, chilled or frozen edible offals of cattle. Exports Imports Values in 1.000 US$ Source: FAOSTAT

  16. Dairy cows /-herd Beef cows /-herd Share of beef in total Austria 621.212 252.792 29% Germany 4.564.000 719.000 14% France 4.413.000 4.101.000 48% Spain 1.156.000 1.974.000 63% Ireland 1.238.000 1.121.000 48% Czech Rep. 547.500 67.300 11% Poland 2.527.000 457.000 15% USA 9.190.000 33.569.000 79% Argentina 2.243.000 19.740.000 90% Brazil 34.710.654 132.701.434 79% Uruguay 412.732 3.688.268 90% Dairy countries and beef countries

  17. Germany: Intensive finishing in stables

  18. USA/Canada: Cow-calf producers

  19. USA/Canada: Feedlot

  20. Quelle: Yann Arthus-Bertrand: Die Erde von oben - Tag für Tag Argentina: Endless Pampa

  21. Brazil: Low input on expansion land

  22. Japan: ‚Sky scraper‘ beef farming Source: Yann Arthus-Bertrand: Die Erde von oben - Tag für Tag

  23. Number of finished cattle sold per year 7.250 2.700 EU CEEC US South America Oc./As./Afr.

  24. Return structure of the farms Other Dairy Cow-calf Arable crop Beef EU CEEC US South America Oc./As./Afr.

  25. Land use in the beef enterprise- own forage without purchase Other feed/grains Other hay or silage Grass hay or silage Pasture EU CEEC US South America Oc./As./Afr.

  26. Daily weight gain (g per day) EU CEEC US South America Oc./As./Afr.

  27. Opportunitätskosten Abschreibung Ausgaben Rindfleischpreis + Direktzahlungen Rindfleischpreis Cost, returns and profitability 2002(US$ per 100 kg carcass weight) 700 Opportunity cost Depreciation Cash expenses Beef price + direct payments Beef price 600 500 400 300 200 100 0 AT-7 PK-3 AT-30 DE-81 HU-80 NA-124 CZ-780 PL-234 FR-90A DE-190 DE-240 DE-280 UY-880 HU-450 BR-180 FR-90B CZ-160A AR-1300 AR-2700 AU-1106 US-7250 BR-500A EU CEEC US South America Oc./As./Afr.

  28. Future framework conditions CAP - EU policy / US - policy WTO negotiations - consequences for international trade

  29. Share of important countries in beef trade Exports 1999 - 2001 (1.000 US$) Imports 1999 - 2001 (1.000 US$)

  30. Exchange rate EUR/US$: 1,14 Cost and volumes of beef prodcution 500 Exchange rate EUR/US$: 1,06 400 300 Total cost in US$ per 100 kg carcass weight 200 BR AU US DE FR 100 23,4 7,0 42,4 4,7 5,5 AR 9,3 0 PK UY NA PL CZ HU AT 1,3 1,5 0,2 1,1 0,4 0,2 0,7 Share of the IFCN-countries in beef production

  31. Where is the potential of net export increase? North America - Production increase - Increasing exports to developing countries - Increasing environm. problems (Spill-over pigs) China - Increasing production and consumption - No increase in net exports Ex-USSR - 1992 - 2002 almost 50 % decrease in production (from 7,5 down to 4 Mio. t) - Decrease consumption 1992 bis 2002: 40 % (from 26 down to 15 kg per head) - Huge investments in processing required - Lack of capital - Politically unstable, corruption

  32. Where is the potential of net export increase? Australia - Land expansion limited - completed - Intensification possible at low feed costs, at present 25% of production New Zealand - Land expansion completed - Intensification limited - lack of feed Argentina- Land expansion limited - Intensification not realistic (crop is better alternative, image problem) - Medium investment requirement at high interest rates - Politically unstabel, corruption

  33. Brazil - the future giant? • Doubled his beef production since mid 80s • 50-200 mill. ha potential land (partly rain forest)mainly in Mato Grosso, Rondônia and Pará • Presently low grassland intensity • Presently low level in cattle production(Ø 1.300 kg milk/cow/year, Ø DWG <400 g/day) • Favourable exchange rate with mainly use of domestic resources • ALCA/EU-MERCOSUR negotiations create potential market access + 7 % • Infrastructure (Transport, Processing) partly not available • Climatic/natural/environmental limits • Political stability? • Intensification sooner or later requiresimports of inputs + 317 %

  34. Brazil - beef production, consumption and exports 1998 - 2003 Globale Sicht IFCN Betriebsvergleiche MTR/WTO Ausblick + 18 % 1.000 t Carcass weight + 7 % + 317 %

  35. Thank you! Dr. Claus Deblitz Institut of Farm Economics Federal Agricultural Research Centre (FAL) Bundesallee 50, 38116 Braunschweig Telefon: +49-531-596-5141 Telefax: +49-531-596-5199 e-mail: claus.deblitz@fal.de homepage: www.ifcnnetwork.org www.bw.fal.de

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