Interstate Differences in the Cost of Complying With Feedlot Environmental Regulations: an Initial Investigation

Environmental regulations impose construction and recurring costs on Australian feedlot operators. However to date there has been no published empirical information on these costs of environmental regulation. Additionally, variations in regulations between states and inconsistencies in the application of these regulations may have resulted in a pattern of location different from that dictated by least cost grain and feeder cattle inputs and processing and transportation services. The aim of this study was to attempt to measure the cost of complying with environmental regulations by large commercial feedlots in different Australian states. From data provided from a survey of 20 commercial feedlots it was found that the average cost of complying with these regulations was $36 per head of capacity. Substantial differences in these costs were found between New South Wales and Queensland, the two major producing states, with the more complex regulations in New South Wales resulting in higher costs.