A report released today indicates that the Australian live export industry is often not competing with the domestic meat processing industry, a common criticism the industry faces from animal welfare organizations that consider the it inhumane to transport slaughter animals by sea.
The research report, Enhancing the Competitiveness of the Australian Livestock Export Industry, was undertaken by the Australian Farm Institute for the Livestock Export Program, a collaborative initiative of LiveCorp and Meat & Livestock Australia.
Australia’s livestock exports are worth approximately A$1.8 billion ($1.4 billion) annually in farmgate returns alone and earns in excess of A$2 billion ($1.5 billion) annually in export revenue. Beef cattle exports are worth A$1.35 billon ($1 billion); dairy cattle exports are worth about $170 million ($128 million), sheep exports are worth A$250 million ($188 million), and goats exports are valued at about $10 million each year.
Australian livestock exports generate about 10,000 jobs across regional Australia, and the report indicates that a cessation of the trade would impose a net cost of about A$300 million ($226 million) annually on Australian livestock producers.
The report highlights the importance of live exports for the cattle industry in Australia during unfavorable production conditions. For example, a series of three failed wet seasons in Northern Australia earlier this decade forced cattle producers to reduce their herds, with most of these being lighter weight animals unsuited for the slaughter market. Australian beef processors were working at capacity during this period, with delays of up to four months common for producers wishing to have stock slaughtered.
In the absence of the live export market, many of these animals would simply have been left on farms and would likely have perished due to lack of feed and water. Feedlots have become an important market outlet for many, although they are not a viable option for many northern cattle producers due to their distant location, which is dictated by the need to be close to major grain production regions and processing works.
Transporting cattle directly to live export ports incur less transportation costs and avoids the need for movement through tick zones, as well as delays associated with transport regulations that require stops for animal welfare and driver fatigue, all of which are necessary but which can significantly add to costs and erode profit margins.
The Australian Livestock Exporters’ Council (ALEC) has welcomed the report. ALEC CEO Simon Westaway said: “This report crystallizes the significant value of the Australia’s livestock export industry and backs-up existing research which robustly debunks any doubts about the economic importance of the live trade to the national red meat value chain.
“Not only does our industry deliver significant and growing economic value nationally and regionally, livestock exporters share a number of strategic objectives with our partners in the meat processing sectors.”
The Australian Life Export Industry
The global trade in livestock has more than doubled in value over the past decade and is now valued at over $18 billion per annum. Australia faces competition from exporters in North Africa, Eastern Europe and South America which operate off a lower cost base and with no stated commitment or investment in post-arrival animal welfare.
Australia’s live export shipping capacity:
Live cattle exports from Australia commenced in the 1960s, although export number remained relatively modest until the mid-1990s when demand for red meat began to grow in Asian markets. Political and other developments both in Australia and in destination markets have resulted in occasional large fluctuations in annual export numbers, most recently in 2011 when the Australian Government suspended the export of live cattle to Indonesia – which was then a major market. Live cattle exports have recovered to approximately 1.3 million in 2015.
Live cattle exports from Australia are sent to a number of Asian and Middle Eastern markets, including the Russian Federation. In 2015, a total of 1,227,298 slaughter cattle were exported, as well as a further 104,079 beef and dairy breeder cattle, destined for use in domestic cattle production sectors in destination nations. Indonesia has been the dominant market for some time, accounting for approximately 50 percent of total exports. Exports to China have grown steadily since 2008. Competition is emerging from Uruguay, and the U.S. and Canada have also been suppliers of live cattle to China in the past.
Live sheep exports grew rapidly during the 1970s, as a result of strong sheep meat demand emanating from Middle Eastern nations, and the relatively large sheep flock present in Australia, especially during the 1980s. The trade was interrupted by the turmoil associated with the cessation of the Wool Reserve Price Scheme in 1991 and associated initiatives such as the flock reduction scheme which resulted in the culling of 10 million sheep.
It recovered somewhat during the mid-to-late 1990s, but the continuing decline in the size of the Australian sheep flock in combination with a switch by many woolgrowers to prime lamb production reduced the supply of merino wethers suitable for the live export trade, and annual sheep exports have been steadily declining since that time. In 2015, Australia exported 1.96 million live sheep.
Approximately 95 percent of Australian current (and past) live sheep exports by value are sent to Africa and the Middle East. The three largest export destinations are Kuwait, Qatar and Jordan.
The live goat export industry is based almost entirely on the harvest of feral goats from Australia’s rangelands. Trade volumes have fluctuated around the 80-90,000 head figure for some time, with Malaysia being the dominant market. The numbers of goat shipped annually is strongly influenced by price, with higher prices encouraging landholders to muster or trap greater numbers for subsequent export. In 2015, Australia exported 90,190 live goats, valued at A$10.32 million ($7.8 million). The dominant market for Australian live goat exports is Malaysia – with live goats either airfreighted direct to Malaysia or transshipped via Singapore.