FTA could create big business for ag

FTA could create big business for ag

Dubbo sheep and lambs had their first outing on January 10 with a draw of 6500 lambs and 2500 grown sheep. With plenty of rain in the days prior to the opening sale these numbers probably lost some ground. The general consensus from agents on the ground was that overall quality was lacking and that the market showed a softer trend. Some processors were missing and other buyers whilst present were subdued with their bidding.

In the last column we touched on the new Free Trade Agreement (FTA) that Australia had signed with India and the benefits that would be enjoyed by both countries. FTA appear to be much in vogue these days with the largest agreement ever to come into force in the first weeks of the New Year. With a membership of 15 countries including Australia, the Regional Comprehensive Economic Partnership (RCEP) will see tariff reductions for grain, beef, dairy and horticultural exports, and improve possible outcomes for other agricultural pursuit alongside fishing and forestry.

Some statistics on the size of this new FTA are to my mind very impressive. The RCEP comprises 29% of the world GDP and 30% of the world's population. Other indications of benefits to Australia include total elimination of tariffs on barley to Mexico down from 115%, some beef products fall from 25% down to 12.5%. Both Mexico and Canada will allow a greater tonnage of cheese into their countries. Indonesia in turn will expand their quotas for live cattle, feed grain and citrus. These and other pluses will help Australia achieve their aim of $100bn by 2030 for the Agricultural sector.

Dubbo's first cattle sale on January 6 saw a very small yarding of 300 head. Feeder and re-stocker cattle looked in the main to be firm and the best cow sales could have been 30c/40c/kg liveweight better.