IFCN Beef International Farm Comparison Network

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IFCN BeefInternational Farm Comparison Network
IFCN Beef Team

• Oklahoma Agricultural Leadership Program
• International Seminar
• February 20, 2004

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We are not in the middle of nowhere
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We do not live on an island
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Everything under Control?
The International Farm Comparison Network
(IFCN) shall be part of a global navigation
system for agriculture.
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What is IFCN?
The International 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.

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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
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IFCN - operating branches
Dairy
Beef
Arable crops
Starting year 1997 1999 2001
Annual yes
no yes Report 00/01/ 02/03 02/03
No. countries / partners 02 26 11 14
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Spatial distribution of IFCN - February 2004
Share of IFCN-countries in - world milk
production 75 - world beef production 50
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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
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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

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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

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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
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The world of beef (3 years averages 2000-2002)
Percentage share of regions in ...
Region
Export
Import
Inventories
Production
(Value)
(Value)
(Head)
(Volumes)
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
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World
100
100
100
100
Source FAOSTAT
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World beef production- Average 2000-2002
World Beef meat 56.582 Buffalo meat 3.056
Values in 1.000 t Source FAOSTAT
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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 sausa
ges of beef and veal fresh, chilled or frozen
edible offals of cattle.
Exports Imports
Values in 1.000 US Source FAOSTAT
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Dairy countries and beef countries
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Germany Intensive finishing in stables
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USA/Canada Cow-calf producers
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USA/Canada Feedlot
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Argentina Endless Pampa
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Brazil Low input on expansion land
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Japan Sky scraper beef farming
Source Yann Arthus-Bertrand Die Erde von oben -
Tag für Tag
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Number of finished cattle sold per year
7.250
2.700
EU CEEC US South America Oc./As./Afr.
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Return structure of the farms
Other Dairy Cow-calf Arable crop Beef
EU CEEC US South America Oc./As./Afr.
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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.
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Daily weight gain (g per day)
EU CEEC US South America Oc./As./Afr.
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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
FR-90A
CZ-780
PL-234
NA-124
DE-190
DE-240
DE-280
FR-90B
HU-450
BR-180
UY-880
CZ-160A
AR-1300
AR-2700
AU-1106
US-7250
BR-500A
EU CEEC US South America Oc./As./Afr.
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Future framework conditions
CAP - EU policy / US - policy WTO
negotiations - consequences for international
trade
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Share of important countries in beef trade
Exports 1999 - 2001 (1.000 US)
Imports 1999 - 2001 (1.000 US)
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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
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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
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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 - Intensificat
ion 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
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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 lt400 g/day)
• Favourable exchange rate with mainly use of
  domestic resources
• ALCA/EU-MERCOSUR negotiations create potential
  market access

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• Infrastructure (Transport, Processing) partly not
  available
• Climatic/natural/environmental limits
• Political stability?
• Intensification sooner or later requiresimports
  of inputs

317
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Brazil - beef production, consumption and exports
1998 - 2003
Globale Sicht IFCN Betriebsvergleiche MTR/WTO
Ausblick
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1.000 t Carcass weight
7
317
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Thank you!
Dr. Claus Deblitz
Institut of Farm Economics Federal Agricultural
Research Centre (FAL) Bundesallee 50, 38116
Braunschweig Telefon [phone] Telefax
49-531-596-5199 e-mail claus.deblitz_at_fal.de homep
age www.ifcnnetwork.org www.bw.fal.de