 Now I think I'm familiar face to a few of you, I spoke this session last year as well, but last year I spoke about the extreme price volatility that the livestock industries were going through, particularly the beef industry. Dry conditions, especially in Queensland and northern New South Wales, had resulted in high turn-off and extreme price falls for cattle, but at the time I noted that there had been some useful rainfall and strong export demand were providing lots of optimism for the short-term outlook. Well that's now panning out, but how could anyone have expected the extent of what's been happening in the cattle market? At the time of last year's conference young cattle prices had shot up to around 450 cents a kilogram, which were then the strongest we'd seen since the early 1980s, and prices since then have continued to climb much higher than we expected with the eastern young cattle indicator hovering around 600 cents a kilogram since January. So what's driving this situation? What's driving this market? That's what I want to look at. So here's a bit of an outline of what I'll be talking about. In essence the El Nino, El Nino weather influence appears to have peaked and useful rainfall has begun. Cattle slaughter has come off as farmers look to restock and prices have escalated. And now our dollar is weaker export demand remains relatively strong and that's also providing support for prices. And farm incomes have improved and the story for sheepmeat is somewhat similar to beef. Over the medium term we expect recovering exports as supply increases, but our export outlook particularly for beef is tempered by increasing competition mainly from South America, which has great capacity to grow. But for now I'd like to take you back to our cattle prices. In the six months to December cattle prices climbed sharply. Young cattle represented here by the yearling indicator, the red line, averaged more than 50 percent higher in that six months than they did a year earlier. And after useful rainfall in many regions late in the year demand rose for young cattle for restocking. Strong export demand combined with a depreciating dollar also pushed up prices of heavier cattle represented by the Japox indicator there and cows. These price rises were in spite of dry conditions keeping slaughter fairly high. Now with the El Nino now having peaked and expected to dissipate over the next few months, more rainfall and pasture growth should see restock of demand continuing to rise. And this will keep young cattle prices up as herd rebuilding intensifies. So cattle slaughter over the past two years reached levels we hadn't seen since the 1970s topping 10.1 million cattle in 2014-15. For cow numbers to recover we need slaughter to fall back this year and in the next few years and we are starting to see this contraction in the current kill numbers. With lower slaughter beef and veal production is forecast to fall from last year's record levels. Eventually numbers will have built up sufficiently to allow slaughter to start rising again back to around 9 million head by 2021. Now we think that production will grow a little faster than slaughter. We expect higher slaughter weights because herd rebuilding will see fewer female cattle slaughtered and because of increased turnoff through feedlots. Production will still be down for the next couple of years but by 2021 we're projecting beef production to be back up at two and a half million tonnes. Not quite last year's record of nearly 2.7 million tonnes but getting back up there. So what's that all mean for our herd and for cattle prices? So you can see in this longer history chart of cattle numbers the past couple of years have given us the most significant liquidation of the herd since the 1970s early 80s and you can also see that we're projecting the recovery to take a little longer than some of the more recent herd recoveries. In the two years to June 2015 the beef cattle herd declined by more than 2 million animals a reduction of 8%. The number of female cattle fell 10% over those two years and this will set the recovery back and the pullback in slaughter this year and next is not expected to prevent further erosion of the herd. So beef cattle numbers are forecast to fall again next year to bottom at 23.1 million head. That's three and a half million head lower than the 2013 peak. Now we were extremely fortunate that coinciding with this female cattle liquidation our major market for cow beef the United States was itself going through a herd rebuilding phase and therefore had a shortage of cow beef and this was a major contributor to the strong rise in cattle prices last year even in the face of our record slaughter and beef production. But prices are forecast to continue rising until beef production starts to recover. We're projecting prices then to ease in real terms towards the end of the projection period. So while prices will be lower by 2021 they're projected to average higher than in any year over the past three decades. Now sheep and lamb prices have also been on an upward trajectory for the past few years. Dry seasonal conditions have led to high slaughter rates and strong export demand has kept prices high despite the high slaughter. The lamb sale yard prices forecast to average 6% higher this year increasing to 550 cents a kilogram and next year strong restocker demand and flock rebuilding are forecast to result in lamb production falling by 3%. So lamb prices therefore are forecast to climb a further 9% to average 600 cents a kilogram. For adult sheep next year with slaughter and mutton production coming back sharply prices are forecast to rise 10%. Now the decline in sheep numbers over the past several years appears to have stabilised at around 70 million head. From here on the national flock is expected to gradually rise to reach around 77 million sheep and lambs by 2021. So with the expanded flock and eventually higher slaughter prices are projected to ease slightly in real terms but to remain relatively favourable. So how are our farmers faring in this market? These are results from the latest A-Bears Farm Survey. Farm cash incomes fell during 2013-14 because of low cattle prices, dry seasonal conditions and high farm debt. We also had an erosion of farm equity and because of lower land values and fewer livestock and this was particularly the case in Northern Australia. In the past year much much higher farm incomes were received as a result of higher cattle prices and high turn off and that's reduced some of the financial pressure for many farmers. But the national picture here masks quite significant differences between regions. In some regions of course this pressure increased because of prolonged drought conditions particularly in Queensland, Northern New South Wales, Central Western Victoria and parts of Southern South Australia. With high cattle prices in 2015-16 incomes are projected to increase for beef industry farms in all states despite reduced beef cattle turn off. However in some regions the effect will be relatively small as their cattle numbers available for sale are low after three years of high turn off. But incomes in 2015-16 are projected to average around $130,000 of farm and that's around double the 10-year average. This will provide some relief for many farmers and allow the pay down of debt or some much needed cash to inject into working capital. For sheep farmers we're also expecting a strong result for farm cash incomes through higher prices for lambs, adult sheep and wool and because of increased numbers sold. In 2015-16 farm cash incomes of sheep industry farms are projected to average around $116,000 of farm and that's around 69% higher than the 10-year average. Now I want to turn to domestic market demand and with the whole meat complex I have an opportunity to talk very quickly about pig meat and chicken meat industries. We're forecasting increasing consumption of chicken meat and pig meat over the next five years while beef and lamb consumption which have been declining long term are expected to continue falling slightly. Fresh pork and chicken meat are both cheaper at retail than beef and lamb. Pork prices have been rising but beef and lamb retail prices have been increasing faster than pork prices. As a result Australia's pig meat consumption has been growing and faster than our production. But some of the additional consumption has been satisfied by increased imports. Imported pig meat of course needs to go through some degree of cooking before sale so it can only be sold as processed product rather than fresh pork. When we take fresh pork consumption and processed together imported pig meat makes up about half of our domestic consumption of pig meat in total. But chicken meat is cheaper still and relatively high prices of the competing meats are expected to encourage even more growth in chicken meat consumption. Growth will be at a slower rate though than in past several years as red meat prices start to moderate. Nevertheless chicken meat is expected to continue to be our highest consumed meat. Now turning to our export markets which for beef is dominated by the United States, Japan, Korea and now China. We're forecasting exports to fall this year and next because of reduced supply. In 2016-17 exports will be 20% below last year's record exports but still higher than 2012-13. And you can see here last year's large increase in exports to the United States when herd rebuilding over there led to sharply higher demand for cow beef imports that I spoke about earlier. But going forward tightening supplies mean that exports to the US will be lower over the next several years and over the medium term their own herd rebuilding and recovering production means that US demand for imported beef will decline. Exports to Japan and Korea are projected to grow slowly aided by our low Australian dollar improving our competitiveness against US exports in these two markets. And market access gains through the two FTAs are also providing support for our exports to these markets. China's demand for imported beef remains strong and our exports to that market are projected to continue increasing but future growth is going to be limited by increasing competition in the Chinese market particularly from South America. Last year our share of the China market fell from 45% to 33% while South America's share fell increased to 47%. To date most of South America's exports have come out of Uruguay but Argentinas have been growing. Brazil has regained access to China and is ramping up their exports quickly. In the December quarter of 2015 Brazil came in second after Australia and in the month of December Brazil was China's largest source of beef imports. Now preliminary ABEHS research looking at South America's beef competitiveness is going to be presented tomorrow by Jamie Penn. That research I'll just give you a little glimpse into it. That research estimates that close to 40% of the growth of Brazil's exports to the world can be attributed to reduced supply costs and this is mainly reflected in productivity growth in the Brazilian beef industry and improved supply chain efficiency. So key for us is remaining as competitive as we can as clearly Uruguay, Argentina and Brazil have great capacity to grow. Now of course there is another avenue of supply for Australia into China and that's live export. Our live exports have been rising pretty strongly over the past couple of years because of strong demand and high prices. In 2015 live export accounted for around 12% of total turnoff and that's up from 8% only two years earlier. All the protocols are now in place and we've started exporting cattle to China. But Indonesia is we expect going to remain the primary market and growth in exports to Vietnam we're expecting to gradually slow. Live cattle to China are likely to be sourced and exported from Southern Australia rather than Northern Australia because of the protocols which exclude cattle from blue tongue endemic regions. Now lamb exports are also forecast to fall this year and next after breaking records last year. Flockery building will start to see exports start to rise again from 2017-18 and the US remains our largest single market by value. While lamb remains niche over there a recovering US economy and the depreciation of the Australian dollar are helping demand in that market. So just to recap and conclude our beef industry has gone through a period of herd liquidation the likes of which we haven't seen for some three decades. This will affect supplies for the next couple of years until herd rebuilding kicks in and production starts to rise until then we expect prices to remain high. Even when supplies increase prices will ease to still favorable levels. A similar outlook is expected for sheep and the sheep meat industries. But over the medium term we should keep an eye on our competition. South American beef industries have significant capacity to grow especially Brazil. Now weaker dollar will help us in the established markets of the United States Japan and Korea but not so much against our competitors in China and emerging markets. So the key will be on focusing on productivity growth supply chain efficiency and on producing a high quality and trusted product. We'll be hearing from our other speakers the strategies their industries and companies are employing to pursue these objectives. I want to thank them also for joining us here today. Thank you.