Executive Directors Report - 2004In 2004, ARCBA concluded 2 ½ years of research in identifying the strategic positioning and opportunities for ARCBA members in the years ahead. This was covered by a Workshop in Brisbane in August, 2004 – this being the third and final workshop on this important topic.
1. Strategic Objectives
It is worthwhile reiterating the strategic objectives that came out of the
VISION (of Industry):By 2013 the cattle genetics produced by Australia’s registered cattle industry will be:
MISSION (of ARCBA):
To provide leadership and support to Australia's cattle seedstock industry
to produce and market cattle genetics which improve their viability as seedstock
producers and the profitability of commercial cattle production.
GOALS (of industry):
2. Financial Benchmarking
ARCBA commissioned CCH Benchmarking in 2004 to undertake a benchmarking survey of the financial results of ARCBA members in 2003. This was the fourth such survey to be conducted. The previous surveys were conducted in 1992, 1994 and 1996.
Thirty (30) breeds participated in the 2004 analysis:
Table 1 gives a summary of the major results since 1992. This shows that the Operating surplus as a percentage of turnover has declined gradually from 4% in 1992 to 1.86% in 2003. Admittedly the 2003 result was affected by the drought. However, this return is at a critically low level. In 2003, the 30 surveyed societies reported a total income of $11.4M for an operating surplus of just $210,000.
Table 1: Summary of Major Results
|Operating Surplus %||4||3.95||3||1.86|
|Cost composition of income %|
|Data Processing – Breed Register||5.6||5.5||5.8||5.4|
|- Performance & Accounting||0||2.5||2.4||5.9|
|Transfer of provisions||2.6||3.9||4.3||3.5|
|Income/Stud Breeder $||533||574||700||1129|
|Members, Regos, Transfers, AI as % of Income||71.1||66.71||70.2||59.6|
|Expenditure as % of Total|
|- Record Processing||15.2||16.3||14.8||18.6|
|- Breed Promotion||38.6||41.0||36.2||36.3|
|- Technical Services||12.1||11.1||13.1||8.9|
3. Key Issues coming out of the Strategic Planning
In August 2004, the Executive Director presented the key issues coming out of the strategic planning. In summary, these are:
Past history shows clearly that the traditional model of beef society organisations
is unsustainable. The future is bright for those societies with the courage
and imagination to follow a new strategic direction.
4. Projects delivered
4.1 Genetic Export Secretariat
The Executive Director wrote an analysis of Australia's failure to meet its potential as a bovine genetic exporter and delivered this widely to industry. He called for the establishment of a Genetic Export Secretariat to co-ordinate Australia's bovine genetic exports. ARCBA's 30th Annual General Meeting recommended that the International Livestock Resources and Information Centre (ILRIC) become the secretariat. ARCBA persuaded the ILRIC Board to take up this role and provide initial funding from ILRIC's operational budget. ARCBA also made representations to the Cattle Council of Australia in November, 2004 which resulted in their support of ILRIC performing the Export Secretariat role.
ILRIC has responded very positively. It has undertaken market research on the bovine genetic requirements of 214 countries and ranked them in terms of being potential genetic importers. ILRIC has created an extensive mailing list of international contracts, it is developing a website, creative packages for financing exports and its CEO has made extensive overseas representations.
A relatively small financial input from ARCBA has caused a very substantial investment in genetic exports by a partner organisation.
4.2 Technical Support program for beef breeding
One of the groups at the ARCBA Workshop in August, 2004 acknowledged the success of the Tropical Beef Technology Services project and requested that ARCBA take initiatives to see if a similar project could be established in Southern Australia. Within one month, ARCBA had put together an imaginative proposal involving 15 breed societies, ABRI, MLA and the BIA. This included a radical plan costing over $1M to revitalise breed breeding extension and technical support in Southern Australia through to 2010. Breed societies will only be contributing 36% towards cost of this program but their members will be the major beneficiaries.
A three year extension of TBTS has also been achieved. This means that the Australian beef industry now has $1.4M of funding towards what will emerge as a national extension program in the latest beef breeding technology.
4.3 Johnes Disease
The provision of seedstock genetics that is free of disease has always been a major priority of ARCBA. The Association has been a strong advocate for payment of compensation to cattle breeders who have cattle testing positive to Johnes disease. Due largely to Alex McDonald's persistent representations to the Cattle Council of Australia (CCA), a $3.9M compensation fund has been made available with appropriate recognition that registered cattle must be compensated at a higher level than commercial cattle. This single achievement represents 100 years of membership fees for all ARCBA members.
5. R.W. Vincent Award
ARCBA has established the R.W. Vincent Award to recognise outstanding contributions to the cattle industry over a sustained period of time. It is the cattle industry's highest award given infrequently. In 2004, the Award was made to Mr Bob Freer. Bob's contribution to beef cattle extension have been legendary.
They include 23 years with NSW Agriculture, research and development activities with the Hereford breed, Chairmanship of MLA's National Beef Extension Program and he has been Chairman of the Global Genetic Evaluation Committee of the World Hereford Council.
Beef cattle registrations reached their lowest recorded level of 126,785 in 2003. This was largely due to drought. However they recovered to 128,716 in 2004. This was encouraging considering that the drought worsened in 2004.
During the year the Lincoln Red and Senepol breeds joined ARCBA. The Association represents 37 breeds and 11,224 registered cattle breeders (up by 470 on 2003/04). In addition there are five associate members within Australia and the peak industry councils of the registered cattle industries in the USA and the Philippines are associate members of ARCBA.
ARCBA presented the results of its Financial Benchmarking and Strategic Planning research at an industry workshop in August, 2004. A total of sixty (60) delegates attended across a wide range of breeds (including a representative from New Zealand). Delegates were provided with detailed information to be shared with their respective Councils and members.
9. 30th Anniversary
The AGM in 2004 marked the 30th Anniversary of ARCBA as a peak Council serving the Australian registered cattle industry. ARCBA has released a publication highlighting its achievements over this period of time.
The table below shows the comparison of the budget for 2004 with the actual financial performance.
|Item||2004 Budget||2004 Actual|
|Recoup Travel to Workshop||3,000||2,403|
|Travel including to Workshop||6,000||5,866|
|Other incl Workshop costs, Presidents honorarium, insurance etc.||7,000||7,996|
|Starting Reserves||$77, 766||$77, 766|
|Estimate Closing Reserves||$72, 716||$78, 172|
Because of the heavy commitment which ARCBA needed to make to strategic planning and financial benchmarking, a loss of $5050 was predicted for the 2004 calendar year. In the event, ARCBA was able to return a small surplus of $406 for the year through prudent management.
Accumulated funds stood at $78,172 at the end of 2004. This is about 1.5 times the annual expenditure level. While ARCBA has very limited resources annually for the task it has to perform for the registered cattle industry, these funds have been managed carefully to ensure that the Association is in a secure financial position. The projects delivered in 2004 will benefit the registered cattle industry by some millions of dollars. Clearly the benefit:cost of ARCBA's activities is very high.
PA Rickards OAM
August 10, 2005