By Mecardo.
Read the Summary Report here.
Key findings.
In the last thirty years, the Australian live cattle export trade has established itself as an important component of the overall Australian cattle market - providing jobs for regional Australians, sustaining farm land values and supporting cattle prices through additional buying competition, particularly during times of drought. This report takes a deep look at the inherent value in the trade across industry, regions and the various cattle sectors.
• The live cattle export trade contributes a vital element to regional economies across cattle production regions, with particular importance in the Northern Territory and North of Western Australia. The vast area of Northern Australia is well suited to breeding cattle, but has limited capacity to fatten cattle. In contrast, the fertile area of South East Asia has the ability to fatten cattle, but limited space with which to breed cattle. The export of live cattle from Northern Australia to South East Asia aligns with each regions natural advantage. It allows tropical breeds that are well suited to the Northern Australian climate to be delivered into an Asian market that has a preference for this type of breed, to the benefit of all supply chain participants.
• An analysis of revenue generated by the live export value chain to the destination port indicated that 40-57% of the revenue value is retained by cattle farmers. This is particularly true for the Northern Territory and North Western Australia, where the value of cattle underpins the land value itself. In many remote cattle stations the live export trade supports the cattle value, which in turn, flows through to the ability for the cattle farmer to borrow against.
• Direct employment on farm as a result of the live cattle export sector is calculated to have averaged 2,029 for the 2012-2017 period. However, a multiple of 4.83 for every on-farm position extrapolates to a total employment relevant to the sector (which encompasses farms, transport operators, fodder suppliers, livestock agencies, export companies, shipping contractors, port operators, veterinarians and financial service industries) to an average of 9,799 full time equivalent positions for the 2012-2017 period.
• When drought arrives, Australian cattle farmers become extremely vulnerable and are often faced with a must sell scenario. The live export sector contributes to the effective management of the resulting de-stocking program. Over the long term, live exports as a percentage of slaughter rests between 8 – 12%. During the severe drought of 2014/15, Australian cattle farmers aggressively de-stocked the herd. While slaughter levels increased to maximum capacity, live export also played its part, increasing to 15.4% as a percentage of cattle slaughtered. As a competitive buyer within the beef supply chain, the live export industry is able to support domestic cattle prices at times when the market is saturated with stock, providing an alternative sales outlet for Australian farmers liquidating their herd.
• The live cattle export trade sustains a raft of industry support services including veterinary, transport and agency businesses. This is identified across Australia but is particularly important in the vast expanse of Northern Australia where services are separated by often significant distances. Any reduction in the trade would place enormous pressure on the continuation of these services, particularly in remote communities where the live cattle export sector is the only, or one of the few, industries offering employment opportunities, particularly in indigenous communities.
Ad - Check out new Buy Now, Pay Later product for Farmers called DelayPay - Ad
Ad - Check out new Buy Now, Pay Later product for Farmers called DelayPay - Ad
• Australia’s trading partners rely on the live trade to meet their beef requirements and ensure reliable supply of roduct for their population. Capacity constraints including the availability of suitable land, electricity for cool tores and household access to refrigeration make the purchase of live cattle an essential component in meeting their local demand for beef.
• There are several reasons as to why Australia’s trading partners source live cattle as a preference. It is seen as a way to increase their local employment through feedlots and abattoirs, where most practices are undertaken manually/by hand. Australia’s live trade regulations have contributed significantly to the growth in animal welfare, handling and husbandry skills in partner countries. The trade also keeps a cap on beef prices as they utilise their by-products to feed cattle, along with the benefit of cheaper labour costs in the importing country. It also provides comfort around the cultural and religious requirements of slaughtered cattle.
• Australian breeders (heifers & bulls) are also imported into developing countries to improve their domestic herd. This is particularly true for the Southern Australian cattle production system, where the value that the live trade adds cannot be underestimated. Indeed, it is evident in the fact that global participants in the cattle industry actively seek out, and pay a premium, for the quality and performance attributes of Southern Australia’s beef and breeding cattle herd.
Read the Summary Report here
Share Ag News Via