Competitiveness of the Australian Livestock Export Industry - Phase 2
Did you know Australia is a leader in training and support programs to improve animal welfare standards in export destinations?
Project start date: | 30 September 2015 |
Project end date: | 01 May 2017 |
Publication date: | 01 October 2016 |
Project status: | Completed |
Livestock species: | Sheep, Lamb, Grassfed cattle |
Relevant regions: | National |
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Summary
Australia has historically been a globally successful exporter of live cattle, sheep and goats, as demand for meat and dairy products has grown in Asia and the Middle East. However, there has been strong competition in recent years from other exporting nations in South America and Eastern Europe.
This project analysed the current and future competitiveness of Australia’s livestock export industry and its ability to grow in value. This is defined as capturing an increasing share of global markets, as well as providing an attractive alternative to the domestic meat processing market for livestock producers.
Both desk-top and industry research were used to understand the global livestock trade, national and international regulations, supply and demand trends in the Australian livestock industry, and the role of livestock exports in adding competition to domestic livestock markets.
The analysis enables the industry to identify appropriate strategies to assist in improving Australia’s ongoing competitiveness in new and emerging international livestock markets.
Objectives
This project aimed to analyse:
• global trends in livestock exports
• the significance of livestock exports for Australian producers
• trends in livestock prices and livestock production including lot feeding and processing capacity in Australia.
It also looked at the value of livestock exports to Australian livestock farm businesses via case studies.
Based on this information, it aimed to identify critical priorities for the Australian livestock industries in order to enhance long-term industry competitiveness.
Key findings
The annual value of the global livestock trade grew from approximately $US 7 billion in 2000 to more than $US 19 billion in 2013, helped by the removal of trade barriers. The greatest growth was in the export of cattle and pigs.
Livestock exports are often seen in Australia as an alternative to domestic meat processing. However, this is considered an over-simplification, in part because livestock are often produced a long way from any abattoirs. Stopping live exports may simply see fewer livestock produced rather than an increase in meat processing. There is also evidence that livestock exports may open future markets for higher-value added meat products in less developed countries.
Australian livestock exporters must comply with the globally unique Exporter Supply Chain Assurance System (ESCAS), which requires them to demonstrate that animal handling and slaughter meet international (OIE) animal welfare guidelines.
- The administrative costs associated with ESCAS are high, and make Australia uncompetitive in some markets.
- Australia is the only nation that funds and provides training and support programs to improve animal welfare standards in export destinations, which improves the welfare of all livestock in those countries.
Case studies of farm businesses identified both direct financial advantage and intangible benefits from the livestock export trade. These included added marketing flexibility, especially where adverse conditions such as drought and fodder shortages prevented livestock being fattened to weights required by abattoirs, and the related ability to time the selling of those stock to fit in with seasonal pasture growth or labour requirements.
Australia has an important comparative advantage in servicing livestock markets in South-East Asia from northern Australia, given its geographical proximity and shorter shipping times.
Industry engagement with federal, state and local governments and relevant transport sectors is required to improve road and rail infrastructure to get animals to the ports, and the ports themselves.
Australia’s relative disease free status continues to be a key element in its competitiveness in international markets, and constant vigilance to maintain biosecurity is essential.
The Australian livestock export industry needs to be proactive in recognising changing consumer dynamics in overseas markets. These include religious and cultural preferences for fresh versus chilled/frozen meat, and the availability of cold storage in destination markets.
To maintain its ‘social licence’, the Australian live export industry needs to engage with the community and policy makers, as well as ensure regulations and animal welfare standards are maintained to high levels. There is also merit in ensuring that a broad general understanding exists right across the livestock industries about the benefits the entire industry gains from the trade.
Benefits to industry
Identifying the factors that contribute to Australia’s competitiveness in global livestock export markets, and strategies to improve competitiveness, will help to drive growth and deliver economic benefits to rural communities and the national economy.
MLA action
A short webinar was prepared by Mick Keogh from the Australian Farm Institute. Further economic analysis has been undertaken by Mecardo taking a deeper dive into the value of the cattle and sheep live export supply chains respectively.
Future research
Australia is a world-leader in animal welfare standards for livestock destined for export to overseas locations. There is merit in encouraging other countries to mandate animal welfare standards equivalent to those that currently apply to Australian livestock exports.
Improvements in transport and infrastructure would benefit livestock exporters and agriculture more generally. Recommendations include:
- A focus on the development of ports to improve the efficiency of loading, building all-weather roads, and improving livestock depots
- Removing differences in regulations that differ from state to state in areas such as animal welfare, driver fatigue provisions, speed and distance on dirt roads, restrictions on road trains, and port fees and charges.
- Coordinating road and rail transport, including better planning around the freight demands of mining and resources.
- Ensuring the availability of ships that are compliant with animal welfare regulations.
The development of stronger market intelligence, including future demand trends and seasonal shipping trends, will deliver benefits to the wider livestock production sector as well as livestock exporters, and give them greater confidence to invest and expand production, when appropriate.
Livestock export staff and agents have direct and continuing engagement with producers, and there may be benefits in ensuring they are trained in the early detection of disease outbreaks or other biosecurity incidents, and in appropriate response strategies in the event a breach is detected or suspected.
More information
Contact email: | reports@mla.com.au |
Primary researcher: | Australian Farm Institute |