Outback and New Market Needs Challenge Australian Cattleman

AUSTRALIAN rancher Dick Cadzow feels as if he is taking on the world.

In the heart of the Northern Territories' desolate Outback, he is taking the painful steps that Australian government officials, agricultural experts, and environmentalists say struggling ranchers here and elsewhere must endure to survive.

The high-risk struggle of the tall, wiry cattleman is far from over, but Mr. Cadzow is slowly eking more out of his 1,100-square-mile ranch and becoming an expert in global marketing.

''The secret of this business is rolling with the punches and anticipating what is going to happen next,'' says Cadzow, whose leathery face and hands and piercing blue eyes reflect years of hard work.

''We haven't been very good at that up until now. We're going to have to get better,'' he says.

The scale and isolation of Cadzow's ranch are astonishing by American standards. His property has its own mountain range, air strip, power station, and automobile repair shop.

The nearest town is a 2-1/2-hour drive away over paved and dirt roads. The nearest neighbor is 25 miles away. A 2,600 pound stud bull was recently brought here by truck from another property; the journey took 12-1/2 hours.

Though Australia is as large as the United States, it has an immense desert heartland in its center instead of the fertile breadbasket Americans enjoy.

The Northern Territory, which holds approximately 1.4 million of the country's 24.5 million cattle, is one of the least populated of Australia's eight states and territories.

Remote Outback living

Twice a year, helicopters ''muster,'' or round up, Cadzow's 4,000 cattle. A ranch bulldozer and grader maintain hundreds of miles of private roads, and a 10,000-gallon fuel tank, carefully irrigated vegetable garden, and month's worth of stored food allow Cadzow, his wife, adult son and daughter, grandson, and two ranch hands to live comfortably without seeing other people for weeks.

''The biggest problem is the mail and the bread,'' says Cadzow's wife, Ann, who freezes 15 to 20 loaves of bread after making her biweekly supply run. ''They fly the mail in once a week to the police station,'' which is 30 miles away.

This ranch may survive the wrenching downsizing besetting Australian agriculture, cattle-industry officials say, because of Cadzow's willingness to take risks on new markets. In the past, he concentrated on selling beef domestically or exporting it to the US. Today, he is targeting the booming Southeast Asian market.

Cadzow is shifting to new breeds of cattle better suited for shipment by boat to Indonesia, the Philippines, and Thailand, where live cattle is preferred to meat. Australia's live-cattle exports jumped from 125,000 in 1991 to an estimated 360,000 this year.

''In the following month, we should have about 100 going,'' Cadzow's son, Steven, says over lunch in the family's spartan brick farmhouse. ''The Asian market seems like it's going to be the best.''

Last year, Japan surpassed the US as Australia's largest recipient of beef.

Both the US and Australia had spent roughly $20 million promoting their beef in Japan, Australian officials say, but the Australian money came from private sources while the US money came from the government.

Australia now spends more money promoting its beef in Asia than it does in the US. In parts of Australia with consistent rainfall, more American-style feedlots are being established to raise the leaner-meat cattle South Koreans and Japanese consumers have come to prefer.

''Consumption is dropping in the [US] ... the market is saturated,'' says Bob Lee, general manager of the Northern Territories Cattleman's Association.

''In Asia, you've got low levels of consumption of beef with incomes rising quickly. People are very excited about the opportunities there,'' he adds.

Cadzow is also praised by environmentalists for running only four cattle per square kilometer on his arid land. Temperatures reach 35 degrees C (95 degrees F.) in the Outback during the summer, causing up to an inch of water to evaporate daily. By capturing rainwater and conserving its use, Cadzow can adequately run his ranch on only nine inches of rainfall a year.

Many other Australian ranchers, under pressure to make high interest payments, are being forced to flirt with disaster by running too many cattle, Cadzow warns. During droughts, cattle can destroy topsoil by overgrazing, and thousands of cattle can die of thirst and hunger.

''You're better off having too few [cattle] than too many,'' Cadzow says as he cruises his scrub brush-covered property in a beat-up, white Toyota four-wheel-drive fitted for desert use. ''Nearly every bust, you see dead cattle.''

Ranch closures prevalent

Increasing global competition, high interest rates, and a severe drought in the neighboring state of Queensland - which holds most of Australia's 24.5 million cattle - has resulted in widespread ranch closures.

''It's the same all over the world, but it's been worse here because you've had these pockets of droughts,'' says Peter Weeks, a research director at the Cattle Council of Australia.

Another reason why ranches have closed is increasingly stringent environmental regulations. Ranchers protested last month.

''In the last 10 years, the number of small beef farms has halved. It's been a pretty difficult time, and it's been made worse by the severe restrictions keeping us out of the US market,'' he says.

Mr. Weeks and other Australian ranching officials accuse the US of unfairly subsidizing American beef in the US market, and more importantly, unfairly subsiziding US beef sales to the all-important Asian market.

''If America closes off those markets,'' Mr. Lee says, ''that puts a lot more pressure on us.''

Australians say US ranchers talk a good game about free-market competition but aren't nearly as lean and mean as Australian cattle operations. US government subsidies allow American ranchers to graze their cattle on government land at low cost, and the US beef market remains protected, Australians say.

In Australia, cattle officials point out, beef subsidies and trade barriers have been sharply cut. Both Australian and US ranchers must innovate or perish.

''Our attitude in the past has been: 'This is our product - take it or leave it,' '' Lee says. ''But that's not going to work in Asia. It's going to take some intelligent marketing.''

Cadzow - who slowly built up a smaller property, sold it, and used the profit to buy his present ranch - is the kind of large-scale, but efficient family-run operation that may survive.

By using helicopters to muster cattle and special gates to capture the animals when they enter corrals to drink water, he has eliminated the need for dozens of ranch hands - known as ''jackeroos'' or ''ringers.''

The loss of jobs has been devastating to the area's ranch hands, mostly poor Aboriginals. But Lee says ranchers have no choice if they hope to survive. ''We're going to have to look at alternative markets [and innovate],'' he says. ''We can see the writing on the wall.''