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At 23 June 2005, there were an estimated 721,000 cattle in Tasmania across 2,500 farms. The majority of cattle were kept for meat production (74 percent) with the remainder for milk production.

In May 2006, the State Government reduced the amount of paperwork that farmers need in order to import cattle from the mainland. However, strong biosecurity is still maintained as testing and certification of the health status of the cattle is still required.

Dairy Industry

The dairy industry is predominately based in the northwest, central–north and northeast of the State, plus King Island. The largest dairying district is Circular Head in the far northwest with 35 percent of the State's dairy cows.

In 2003-04, Tasmanian milk production was worth $160.4 million, representing 18.7 percent of Tasmania's agricultural output. Tasmania produced 600 million litres of milk in 2004-05. Approximately nine percent of the State's milk production is consumed as liquid milk products, with the remainder being further processed, with a sizeable value-added contribution by downstream milk processing, predominately the production of high quality cheeses, butter and powdered milk as well as confectionary products. Tasmanian dairy farms have the lowest cost of milk production in Australia, as dairy cows are fed a higher proportion of low cost pasture feed. While this leads to lower production per cow, total milk production costs are much lower, giving Tasmania a competitive advantage.

DPIW reports that, Tasmanian milk production grew at an average 6 percent per year for the decade up to 2001-02 and most of the increased production was exported to Asian markets. Since then milk production has stabilised at around 600 million litres.

Graph 1: Milk Production and Gross Value

Source: ABARE, Australian Commodities 06.1 - March Quarter 2006.

Tasmania has seen a decline in the number of registered dairy farms coupled with an increase in the average size of dairy farms. In 2005 there were 520 dairy farms with an average heard size of 270 cows per farm. ABARE estimated the average farm size to be 258 acres in 2002.

Major Tasmanian dairy processors are detailed below:

Table 1: Major Tasmanian Dairy Processors

Source: Department of Primary Industries and Water, Dairy Industry Profile - February 2006.

Beef Industry

The value of beef industry production was $149.9 million in 2003-04, approximately 17.5 percent of the total value of Tasmanian agriculture output. Due to the high production and sale yard prices, the Department of Treasury and Finance estimates that this will have increased to approximately $170 million in 2004-05, an increase of 13 percent compared with 2003-04.

Contributors to the strong performance of beef have been improved production and high beef prices.

Approximately 60.9 percent of total beef production is exported overseas. The majority of exports went to Japan, with the United States the only other country with a significant share. The value of Tasmanian beef exports to Japan grew by 47.9 percent to 133.2 million, as a result of the Japanese ban on US imports.

Graph 2: Gross Value of Cattle and Calves

Source: Australian Bureau of Statistics, Value of Agricultural Commodities 7503.0.