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Oil price rise hits cattle operator

One of Australia's largest cattle operators says the dramatic rise in oil prices this year has cost it about $1 million.

Crude oil prices overnight hit record levels at $US53 a barrel.

The Australian Agricultural Company has 22 cattle stations mainly in the remote areas of Queensland and the Northern Territory.

Managing director Don Mackay says while many businesses are feeling the impact of the rise in fuel, it is being particularly felt in remote areas.

"Everything we buy and everything we sell is carted in and carted out and in addition to that all the electricity we use particularly in the Northern Territory but also in many of our Queensland stations is also generated on the station using diesel so fuel costs have a material impact on us," he said.

Editorial Notes: Not a major story, but it surely must be the first of many. It shows how large-scale animal husbandry is utterly dependant on cheap oil. As business like this cease to exist it will have an incremental impact on food prices. It's all happening slowly, but it's happening - IG

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