A Meat and Livestock Australia report has highlighted the country’s ongoing strength in livestock exports, but says drought has “certainly affected” prices and supply.
The livestock industry’s marketing and research body found in its State of the Industry Report 2019 that Australia consistently exports 65 percent of its livestock. The country is the world’s leading exporter of sheepmeat and goatmeat, and is the third-largest exporter of beef behind Brazil and India.
Overall, export values were down year-on-year in 2017-18, falling 13 percent to A$15 billion ($10.2 billion; €9.2 billion), MLA said. This was still 59 percent higher 2012-13 (A$9.4 billion), the years following the end of the last major drought.
The current drought’s impact is being keenly felt by Australia’s livestock sector, with a near-record number of cattle on feed last year, MLA said.
It noted that the average rate of return (excluding capital appreciation) of Australian beef cattle farms decreased from 2.7 percent in 2016-17 to 1.7 percent in 2017-18, according to data from the Australian Bureau of Agricultural and Resource Economics and Sciences. ABARES data also showed that sheep farm returns decreased from 4.4 percent in 2016-17 to 1 percent in 2017-18.
Farm cash income was also significantly lower year-on-year for both sectors.
A lack of pasture due to the drought forced many producers to turn off stock in the last 12 months, MLA said, leading to higher production levels in 2018.
Australian beef and sheep exports by volume rose in 2018. Beef exports increased by 11 percent on the previous year to 1.26 million tonnes. Japan was the largest export destination with 28 percent of market share, followed by the United States on 21 percent and South Korea at 15 percent.
Lamb exports were 7 percent higher year-on-year at 267,254 tonnes, which was also 13 percent higher than the five-year average.
The result is that both the national cattle herd and sheep flock are at depleted levels, with the beef herd set to decline by 7.7 percent to 25.2 million head in 2018-19, and the sheep herd is expected to fall by 6.8 percent to 65.8 million head.
The report highlighted the importance of ongoing access to international markets, too, arguing that Australia’s ability to respond to demand in the European Union has been “constrained by historic, highly restrictive low volume quotas.”
It also said that any change to the existing United Kingdom and EU import regimes as a result of Brexit “has the prospect of disrupting and potentially diminishing Australia’s existing access arrangements.”
Red Meat Advisory Council chief executive Anna Campbell said in a statement: “Improving trade access into emerging and currently restricted markets is critical for the ongoing competitiveness and prosperity of the Australian red meat and livestock industry.
“The industry is operating in an environment where total world meat consumption continues to increase. Over the last two decades, total global consumption has increased by 64 percent at an average rate of 2 percent per year for sheepmeat and 1 percent for beef.
“Domestically, Australia is one of the world’s largest per capita consumers of beef and sheepmeat. In 2018, we consumed three and five times the global consumption averages for beef and sheepmeat respectively.”