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1 V 33 (4) APRIL 2002 IN THIS ISSUE Pastoral Market Update Tax Planning for Primary Producers Te Nort West Cloud Band Emergency Animal Disease Response Agreement Nutrition Information on Local Pasture Species Renewable Energy Rebate Program Parkinsonia, Tis is Your Life Notes from te Regional Director Montly Review of Temperature and Rainfall Mailing List Update contact: Website : claire.ill@nt.gov.au debbie.stapleton@nt.gov.au

2 Destination Last year Marc, 2002 LIVE CATTLE EXPORTS VIA DARWIN PORT Total Cattle (including interstate) YTD Marc Previous Mont Difference Last year NT Cattle only YTD Marc Previous Mont BRUNEI 16,062 16,155 4,491 4,960 2, ,477 7,003 11,003 3,161 2, EGYPT 21,419 52,692 3, ,762 30, INDONESIA 136, ,190 33,944 14,909 7,633 3,058 +4, , ,632 20,417 11,732 4,959 2,555 +2,404 PHILIPPINES 108,957 31,984 8,837 12,210 2, ,435 82,837 25,701 4,704 11,774 1, ,999 SABAH SARAWAK VIETNAM W-MALAYSIA 16,418 5,055 2, ,158 4,350 1, Difference TOTAL 299, ,127 53,520 32,416 12,529 3,705 +8, , ,172 30,256 26,795 7,733 3,082 +4,651-21,104-3,461 "Marc at a glance" 12,529 ead troug te Port of Darwin during Marc, 8,824 more tan February and 13,879 less tan Marc last year. Cattle Head Jan Live Exports tru Port of Darwin 2001 v 2002 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Live Buffaloes (Darwin Port) Destination Mar 2002 YTD Live Camels (Darwin Port) Mar 2002 YTD BRUNEI 2, , W-MALAYSIA SARAWAK SINGAPORE EAST TIMOR TOTAL 2, , NT LIVE CATTLE (& BUFFALO) EXPORTS VIA WA PORTS WYNDHAM, BROOME AND PORT HEDLAND DESTINATION Wyndam Broome Port Hedland Total Cattle Buffalo EGYPT 2,360 2,360 INDONESIA 7,104 1,015 1,597 9,716 W-MALAYSIA 5, ,772 (Broome) 245 PALESTINE TOTALS 14,781 1,611 1,597 17, Page 2

3 NT CATTLE INDUSTRY SITUATION AND OUTLOOK, Marc 2002 Valerie Hristova Department of Business, Industry and Resource Development Australian Beef Industry Australian saleyard cattle prices ave increased by some 43 per cent in te past two years. Average prices in reaced 310 cents per kilogram dressed weigt, te igest in real terms since However, significantly iger Australian beef production, relatively weak demand for beef in Japan resulting from BSE concerns, and quota limits in te United States, are forecast to result in Australian saleyard cattle prices falling in by some 15 per cent to average 265 cents a kilogram. Cattle prices are projected to fall furter in as beef production increases in te USA and remains ig in Australia, Canada and New Zealand. Australian producers ave been increasing erd numbers in response to ig beef prices. Preliminary figures sow te Australian cattle erd numbered 28.8 million ead in June Numbers are forecast to reac 30.4 million in June 2002 and peak at 31.6 million in June Te lagged effect of te lower beef prices are ten expected to decrease cattle numbers in te medium term. Beef and veal production is terefore forecast to rise until , peaking at 2.46 million tonnes, and ten decrease as cattle numbers fall. Exports of beef and veal are forecast to continue ig, peaking in at 1.1 million tonne. However value of exports is expected to peak at $4,359 million in as large amounts of te increase in production will be forced into lower-priced markets. Consumer reaction to BSE in Japan will be te key to ow soon we can regain sales to tis ig-priced market. Sales to Korea are expected to continue to increase as its markets are liberalised and its economic growt continues. Per capita beef and veal consumption in Australia was 33.1 kg per ead in , a furter fall wit te increase in beef prices. However, consumption is projected to rise in te medium term wen retail prices for beef fall are expected to fall. Australia s live cattle exports are expected to reac 851,000 in and are projected to rise furter to 925,000 in , iger tan te record for live cattle exports of 895,000 in Live cattle exports to Indonesia and te Pilippines are expected to rise over te medium term as teir economies improve and Australian cattle prices ease. However, demand for Australian live cattle in Egypt, te second largest export destination for Australian live cattle in , is likely to ease over te medium term as Egypt reopens its market to imported beef from Ireland, a major supplier of beef to Egypt prior to te BSE crisis. Nortern Territory Live Cattle Trade Live cattle exports troug te port of Darwin increased in value by more tan 10% to $162.7 million in Cattle numbers exported live troug Darwin decreased, altoug te total number troug all Australian ports increased. Egypt replaced te Pilippines as Australia s second largest export destination in 2001 and most of te cattle going to te Middle East from Australia were exported from Western Australian ports. 258,127 ead of cattle were exported troug te port of Darwin, down 14% in number on te previous year. Of tese, 193,172 ead (75%) were Territory cattle. Indonesia was te major destination, taking 59%, followed by Egypt (20%) and te Pilippines (12%). 151,190 ead went to Indonesia troug Darwin, up 11% in numbers on te previous year. Cattle going to Egypt troug Darwin more tan doubled (146%). Cattle numbers to Brunei increased marginally. However te numbers going to te Pilippines fell by 66% on te previous year, due mainly to weak economic growt and devaluation of te peso. Te number exported to Malaysia troug Darwin also dropped (by 69%). Most cattle going to Malaysia now go from Western Australian ports. Live cattle exports troug te Port of Darwin are to and for te first two monts of Total numbers exported were 19,887, down 27% on te same period in Exports to te Pilippines are well up on te previous year (+257%), but numbers to Indonesia are down 60%. Tere ave been no exports troug Darwin to Egypt so far tis year but a number of sipments to tat port are booked for te dry season. Cattle prices remain ig wit steers attracting $ /kg live weigt at Darwin. However tey are expected to soften later in te year. Prepared by te NT Department of Business, Industry and Resource Development. Tis publication contains commodity market information prepared for DBIRD staff use in strategic researc and extension planning. Wile DBIRD exercise care in te compilation and preparation of tis information, no responsibility is taken for its accuracy or for te completeness of any information tat is reproduced from oter sources. DBIRD denies any loss or damage to any person weter caused directly or indirectly by te use of any of te information provided. Page 3

4 TAX PLANNING FOR PRIMARY PRODUCERS Tis article is te first in a series of articles prepared by Deloitte Touce Tomatsu (Alice Springs) dealing wit various business and taxation issues affecting te primary production industry. Many primary producers in te Central Australian region continue to take advantage of te favourable market conditions resulting in large sales of cattle. For many, tis will produce profitable trading results for two years in succession, inevitably recouping most, if not all, prior year carry forward losses. Witout tese losses many primary producers are facing large tax liabilities. However, certain strategies may be undertaken by 30 June to avoid an adverse taxation position tat could severely affect future positive cas flow. Tese strategies focus on maximising te after tax wealt of te producer. We outline some strategies below but advise tat as is always te case wen considering tese strategies, tat a ig priority consideration be commerciality, of wic tax is only a part. Investing in farm managed deposits te benefit of tis strategy is tat tese investments assist in smooting out te seasonal trend by reducing tax payable in good years notwitstanding poor trading years in te past and deferring assessable income to future years in wic cattle prices are lower; Making superannuation contributions to maximum aged based limits troug your business structure were carefully planned tere a number of scenarios tat can be used to maximise your retirement benefits and obtaining a tax deduction in doing so. For example, establising your own Mum and Dad superfund in wic you ave control over your superannuation ; Review your existing business structure for example, if you are operating a partnersip tere may be furter commercial and taxation benefits in setting up a company to tap into a fixed tax rate of 30% or a family trust. Some of te benefits of doing so include asset protection and splitting income to beneficiaries on lower tax rates. Te added flexibility is of significant advantage wen it comes to succession planning; Defer derivation of assessable income defer proposed stock sales near financial year end until after 30 June; Accelerate deductions for example, incur expenses on repairs and maintenance (were required) and ensure tese are invoiced by 30 June. In tis way te business may bring forward te tax deduction witout aving to outlay te cas until te following mont. Cas flow is always a critical factor in te successful operations of any business. Given te seasonality of primary industries it is important to plan by keeping satisfactory cas reserves for use in times of unfavourable market conditions. Poor market conditions for producers ave persisted for long periods of time in te past and will appen again. In fact some Government statistical bodies are predicting a 15% drop in cattle prices over te next 12 monts. Accordingly, it is vital to your cas flow tat appropriate tax planning strategies are undertaken in an effort to maximise your after tax wealt. Tis window of opportunity is ere now so plan and act now to avoid unnecessary drains on your cas reserves. Deloitte Touce Tomatsu is a Cartered Accounting firm tat as developed a compreensive tax planning cecklist specifically designed around te primary production industry. We also provide advice on succession planning, superannuation as well as accounting, business and bookkeeping services. Please feel free to contact Eugene Kalenjuk of Deloitte Touce Tomatsu (Alice Springs) on to discuss any of te matters outlined above. Page 4

5 THE NORTH WEST CLOUD BAND Rik Dance Rangeland Production Alice Springs Te nortwest cloud band is an important source of rainfall for te Alice Springs district. It is a feature wic is often seen in satellite images of cloud formations. Frontal weater systems pass across soutern Australia from west to east during te winter monts, bringing wit tem te rainfall wic is caracteristic of soutern winters. During te summer monts, a band of tropical low pressure systems, te monsoon troug, descends onto te Top End, bringing te summer rainfall wic is caracteristic of Nortern Australia. Occasionally, te edges of eiter of tese weater influences may bring rain to te Alice Springs district. In addition to tose weater systems, streams of cloud can be seen to emanate from te tropical Indian ocean down across WA and te soutern NT into te general direction of NSW. A typical example is pictured. Tese nortwest cloud bands are most common between April and August and tey often bring rain wit tem. Several of tese cloudbands can form in te one mont. An investigation by te Bureau of Meteorology in 1997 revealed tat tey account for 70 to 90 percent of te cool- season rainfall over nortwestern and central Australia. If te cloud extends to soutern Australia, it may be encountered by a cold front travelling across te country, wit a ig likeliood of rain. Tat seems to ave appened over NSW in te picture. So wen te dry times return, keep an eye out for a nortwest cloud band, you never know your luck. Source : Wrigt, W.J. Tropical-Extratropical Cloudbands and Australian Rainfall : I. Climatology International Journal of Climatology, 17, (1997) Page 5

6 NORTHERN TERRITORY GOVERNMENT MEDIA RELEASE 20 Marc 2002 Paul Henderson MLA Minister for Primary Industry and Fiseries A LANDMARK AGREEMENT FOR THE NORTHERN TERRITORY LIVESTOCK INDUSTRY Te Minister for Primary Industry and Fiseries Paul Henderson, as welcomed te Emergency Animal Disease Response Agreement announced by te Cairman of Animal Healt Australia at te National Press Club in Canberra today. Te Agreement between Australia s major livestock industries peak councils and State, Territory and Commonwealt Governments establises a partnersip and sets parameters for te funding of te initial response to exotic disease incursion or outbreaks. Diseases suc as foot and mout and BSE or mad cow disease are covered by tis agreement. Minister Henderson said We are fortunate tat Australia s geograpic position and its quarantine barriers provide good protection from exotic diseases. An outbreak of a disease suc as foot and mout in te Nortern Territory would be catastropic and would jeopardise valuable national and international trade. Te cattle industry s contribution to te Nortern Territory economy is significant. Between January and December 2000 te Nortern Territory s cattle industry production was valued at more tan $175 million, over ead of cattle were exported to seven countries wile our cattle trade to te rest of Australia was valued over $53 million. Mr Henderson said Te Agreement allows for a swift response to exotic disease outbreaks. Tis will mean remedial action will be immediate, te cost associated wit te action will be minimised and tere will te earliest possible return to normal operations for te livestock industry. Contact: Amanda Buckley , Mob Page 6

7 NUTRITION INFORMATION ON LOCAL PASTURE SPECIES By Doug Wilson and Claire Hill Meat & Livestock Detailed below is te range of nutrient values for five locally important plant species based on Alice Springs DPIF nutrition laboratory analyses. Te Animal Nutrition Laboratory analyses plant samples, predominantly native pasture species, for posporus, nitrogen, crude protein, and dry matter digestibility (DMD). Tese results are ten recorded in te Nortern Territory, Australian Feeds Information Centre (AFIC) database. Te information in te AFIC database is available for use by anyone interested. Anyone is welcome to send plant samples for analysis to our laboratory. A summary is available from te library to give more detailed information on te analyses below. Common name (Genus species) Qld Bluegrass (Dicantium sericeum) Native millet (Panicum decompositum) Siratro (Mactroptilium atropurprum) Witewood (Atalaya emiglauca) Dry cattle maintenance requirement Dry matter digestibility (%) Crude protein (%) Posporus (%) Av. Min. Max. Av. Min. Max. Av. Min. Max (Source: NT AFIC database. Tis data sows lowest and igest values across many seasons and many stages of growt.) Te above table also sows dry cow maintenance requirements. Te maintenance requirement of an animal is te amount of feed intake tat will result in no loss or gain of liveweigt and will enable te animal to perform essential muscular activities. Maintenance requirements vary wit liveweigt, breed, age and sex. For furter information contact: Advisory Officers or Doug Wilson p Page 7

8 Renewable Energy Rebate Program SUPPORTING THE USE OF RENEWABLE ENERGY FOR REMOTE POWER GENERATION Renewable energy is a viable alternative to diesel generated electricity in tose areas of Australia not serviced by a main electricity grid. Te Renewable Energy Rebate Program (RERP), funded by te Commonwealt Government, provides support for conversion of diesel based electricity supplies to renewable energy tecnologies. Te objective of te RERP is to increase te uptake of renewable energy tecnology in remote areas of Australia, wic will: elp in providing an effective electricity supply to remote users; assist te development of te Australian renewable energy industry elp meet te energy infrastructure needs of indigenous communities; and lead to long term greenouse gas reductions. Te program will be funded from excise paid on diesel used to generate electricity by public generators. Te Nortern Territory s sare is estimated to be approximately $11m pa for te four-year program. Te funds will be used to provide rebates for te installation of renewable remote area power supplies. POTENTIAL APPLICANTS Off-grid users, including te following, will be eligible for rebates: Pastoral properties Indigenous communities As funding under te RERP is Roadouses/Wayside Inns limited, rebates can only be Houseolders approved up to te funding limit. Tourism Operations THE REBATE ELIGIBLE EXPENDITURE Under RERP, rebates of up to 50% may be paid for renewable energy components suc as batteries, potovoltaics (solar panels), wind turbines and inverters. Payment of rebates will be for eligible capital expenditure on renewable energy tecnology, wic may include: renewable energy generating equipment suc as potovoltaics, wind turbines, biomass conversion equipment and ydro plants; essential enabling equipment suc as inverters, control and monitoring equipment and batteries including provision of metering necessary for required data collection and not oterwise part of a system; and essential non-equipment expenditure suc as installation (including travel), design. Project commissioning (up to a maximum of 12 monts) and Project management costs. NON-ELIGIBLE EXPENDITURE RERP funding will not be available for: solar ot water systems; or diesel (or oter fossil fuel) backup systems. PROPOSED SCHEME DETAILS Guidelines and Rebate Application forms are available from te Department of Business, Industry and Resource Development. Te requirements for all Projects funded by RERP will include te following. Te owner of a proposed Project will be: Page 8

9 for ouseolds, te owner of te land were te proposed Project will be based. Ownersip is any form of tenure tat allows occupancy on te land for at least five years; for businesses, suc as pastoral operations, tourism operations, and te Power and Water Autority, te owner or management autority of te business; and for indigenous and oter communities, te governing autority of te community owever constituted. Te Project owner will be required to: ensure tat all equipment funded under te RERP remains at te installation site for at least five years, wit exception of batteries tat may ave reaced te end of teir life; provide te Department of Business, Industry and Resource Development wit an annual report, describing te system s operation. Te Department may request additional information; provide satisfactory evidence of a maintenance plan to keep te system operational; and provide satisfactory evidence tat appropriately qualified personnel will carry out design and installation of te system. For more information contact: Te Department of Business, Industry and Resource Development 4 t Floor, Centrepoint Building, Smit Street, Te Mall GPO Box 3000, Darwin, NT 0801 Pone: Facsimile: PARKINSONIA, THIS IS YOUR LIFE.. Weeds Branc, Alice Springs Weeds branc in conjunction wit CSIRO (Darwin) are currently researcing te noxious weed Parkinsonia aculeata. Te plant is usually referred to as Parkinsonia in Australia, but overseas is also commonly known as Jerusalum Torn, Jelly Bean tree, palo de rayo, Mexican Palo Verde, Horse Bean tree, Sessaban and Barbados flower fence. Current findings from CSIRO suggest tat Parkinsonia is native to Central America and was introduced to Australia in te late 1900 s as an ornamental or sade tree for planting around bores, dams and omesteads. Since it s introduction, Parkinsonia as establised itself as a vigorous weed in Queensland, Nortern Territory and Western Australia. Current studies are concentrating on te basic life stages and interactions of te plant, suc as seed production and viability, biological and control agents and predators, seedling recruitment and survival, growt rates, and favoured environmental conditions of te plant. Trial sites ave been establised on Auvergne Station in te VRD, Banka Banka Station in te Barkly, and Alcoota Station in te Alice region. Tese sites are monitored montly for collection from litter traps and seed burial trials and to assess seedling transects and mature plant seasonal canges. Te aim is to document te plants caracteristics and its abitat requirements in order to apply better management decisions for future controls. A Parkinsonia simulation model is also currently being built. Tis tool will be used to elp optimise our defence against invading weed species. Simulation Models are simplified representations of reality. As a tool, it can offer managers a better understanding of ecological systems and predict canges over time. A manager could ten possibly play around wit te simulator using different management options and combinations of Integrated Weed Tecniques in order to find te most efficient management solution. Te model is in its infancy stage at present and will be used as a trial for oter weed models in te near future. For Information contact : Jon Gavin Weeds Branc Alice Springs P: Page 9

10 DBIRD PRIMARY INDUSTRIES NEWS NOTES FROM THE REGIONAL DIRECTOR Alice Springs is a lively city of 27,000 people plus approximately alf a million tourists per year. It produces considerable effluent. Until recently tis as been disposed of as a problem, using evaporation. As te town s population as lifted in 25 years so as te effluent. Te potential value of te liquid effluent as a resource for irrigation as been recognised in te past. Tis department as been working closely wit te Power and Water Autority for some time on options for realising te value of te effluent. Tis as included investigating opportunities for commercial orticulture and identification of suitable land. A call for Expressions of Interest in reuse of te liquid will be made in early May 2002, bot in te NT and nationally. Applicants will receive an information package. Best Wises, Pil Anning WEATHER DETAILS PROVIDED COURTESY OF THE BUREAU OF METEOROLOGY, DARWIN. PLEASE NOTE THAT THIS INFORMATION IS BASED ON UNCONFIRMED DATA MONTHLY REVIEW OF TEMPERATURE AND RAINFALL FOR MARCH 2002 Temperature : In te Alice Springs district (ASD) te mean montly maximum temperatures were about normal in te soutern alf, but 1-2 o C above normal in te nortern alf of te Alice Springs district and te entire Barkly district. Rabbit Flat (ASD) reported te igest mean montly maximum temperature of 37.1 o C and Kulgera (ASD) reported te lowest of 31.3 o C. Jervois (ASD) reported te Territory s igest daily temperature on te 11t of 41 o C and Kulgera (ASD) reported te lowest at 20.1 o C on te 1st. Te mean montly minimum temperatures were about normal in bot districts except for in te soutern alf of te Alice Springs district were deviations of 1-3 o C less tan normal occurred. Bot Alice Springs airport and Kulgera reported te lowest mean minimum temperature of 15.3 o C. Tennant Creek Airport (Barkly district) reported te igest mean montly minimum temperature of 22.8 o C. Uluru Rangers (ASD) reported te lowest daily minimum temperature of 7.2 o C on te 29t and Yuendumu (ASD) reported te igest of 27.4 o C on te 19t. Rainfall : Te centre area of te Alice Springs district reported average falls and te remainder - below average. Te Barkly district also experienced below average falls trougout. Ormiston Gorge (ASD) ad te igest number of raindays at six, but all oter stations experienced tree or less raindays for te mont. Antony Lagoon (Barkly district) reported te igest total montly rainfall of 22.0mm and te igest daily rainfall of 16.0mm on te 7t, but te majority of te rainfall in te Barkly and Alice Springs districts fell from te 11t to te 13t. Page 10

11 Have You Canged Your Details/Address? Do You Still Want Us? Please Tear off and Return to Us. Fax : (08) OR Post : PO Box 8760, Alice Springs NT claire.ill@nt.gov.au From : YES, I would like to continue to receive te Alice Springs Rural Review. NO, I no longer wis to receive it, please take me off te mailing list. Please note my contact details ave canged (See below). NAME :... MAILING ADDRESS: