A tax on cattle for methane emissions is being proposed by the Labour government of Australia. Such a carbon tax on ranchers and feedlot operators would be unprecedented, with the average Australian beef farmer being assessed AU$6,000/year, according to farm groups.

Large feedlots, a relatively recent and vital part of Australia’s modern beef industry, would be particularly hit hard by the proposed new tax.

Until 1985, there were no feedlots of any consequence in Australia. As Japan developed into an economic powerhouse following its defeat in World War II, it developed a taste for U.S.-style, grain-fed beef. In 1985, Japanese meat importers began to look to Australia for such product but there was none to be found. Nor was there any interest on the part of Australian farmers to build feedlots for cattle.

Frustrated by the lack of interest on a government or farming level, Japanese companies such as Mitsubishi, Nippon and Itoham decided to buy their own farms and build their own feedlots.

The first acquisitions by the Japanese were in farms for feedlots in Queensland, followed by a large bankrupt beef plant in northern New South Wales (NSW) and in Queensland, in which to slaughter their own cattle. In the early 1990s, Mitsubishi built a feedlot in Narrandera, in southern NSW with capacity for 50,000 cattle, complete with a state-of-the-art meat complex with an 800 head/day capacity. Thus the Japanese players could buy store cattle, put them into feedlots for 90 days, process their own beef and export it back to Japan, taking of course all the profits with the beef.

By 1995, the feedlot business in Australia had come of age, but the Labour government’s proposed cow tax could signal its demise. It’s reminiscent of the Hawke government’s 1989 solution to the wool glut. It was to give every farmer 80¢ for a .22 bullet to shoot his sheep and bury them on the farm to remove the problem.
-- Muriel Elizabeth Hayes, Argentina for BEEF Cow-Calf Weekly