THE live export trade is no stranger to heavy lifting, however the past year has been particularly challenging with limited stocks, the ensuing high prices that brings, and overall lower profitability.
We are the market leaders in high quality livestock and we know the benefits of good animal welfare.
- LiveCorp chairman David Galvin
Competitors are throwing their weight around in prized markets and the regulatory burden continues to accumulate.
And the ever present challenge to maintain social licence constantly presents a backdrop to business.
Live export statistics and prices compiled by LiveCorp, the trade’s research and development provider, and Meat and Livestock Australia, show feeder and slaughter cattle exports for 12 months to the end of October were just over the 977,000 head mark, back 23 per cent year-on-year.
There were no cattle exported to Indonesia, our biggest customer, in September due to delays in the issue of permits and Indonesian Government negotiations relating to a mandatory 1:5 ratio of breeder to feed cattle imports.
With the agreement by a majority of Indonesian importers to the breeder ratio, permits have now been issued for close to 130,000 head to the end of December and the trade picked up slightly in October.
If export volumes for November and December come in at more typical figures, annual totals will be on track to reach close to one million head this year, an 18pc decline on 2015.
MLA analysts say much of the decline, particularly that in South East Asia, has been a response to the supply-driven record high prices for Australia cattle.
Indeed, prominent exporters including Frontier International, Wellards and Elders pointed to that as the big reason the much-touted trade of slaughter and feeder cattle to China has not yet taken off.
It was exacerbating the costs involved with the rigorous protocols associated with this market, they said.
Since the signing of the feeder and slaughter cattle health protocol in July 2015, said to pave the way for up to a million head a year to go to China, just three trial air consignments of cattle have been sent.
Exporters speaking at the trade’s national conference in Canberra in late October, Livexforum, predicted things would start to move regarding China to a greater extent by mid next year.
2016 also marked the fifth anniversary of the suspension of live cattle export to Indonesia following the airing on Australian media of graphic footage of the mistreatment of Australian animals in that country’s abattoirs.
Industry leaders and agriculture commentators took the opportunity to discuss how things have, and in some cases haven’t, changed.
In a matter of weeks following the ban, a regulatory framework known as ESCAS - the Exporter Supply Chain Assurance System - was developed.
Australia is today the only country in the world that has made animal welfare a condition of livestock trade.
Outgoing chief executive officer of the Australian Livestock Exporters Council Alison Penfold said despite the hurt and pain the suspension caused it created a stronger, more resilient and more sustainable live trade industry.
Looking back, what was achieved was incredible, she said.
“It’s one thing for a government to say you have to be responsible and another for an industry to accept that and get on and do it in a fashion that five years later their trade is in a stronger position,” she said.
“That frustrates those opposed to the trade.
“They threw everything but the kitchen sink at this trade to bring it down and today it’s even stronger.
“I’d say to those people – it’s stronger because of what you did. You’ve contributed to the improvements.”
Ms Penfold handed the reigns over to Simon Westaway in August.
Leading agriculture commentator Mick Keogh said it was evident from day one the suspension threw in the faces of the beef industry a major risk confronting Australian agriculture that it was nowhere near prepared to deal with - the concept of social licence.
When footage of horrific practices in Vietnam abattoirs arose this year, the industry reacted swiftly - and rather differently - to both condemn what was happening in line with public opinion and to enforce a ban on Vietnam abattoirs itself.
Australia’s live export industry today is one of the most advanced in terms of its knowledge of, and implementation of, crisis communication.
It has done significant work in the area of bringing the message of its value to the wider community to the forefront.
Speaking at Livexforum, LiveCorp chairman David Galvin said independent assessments showed the livestock export industry significantly increases prices to producers of cattle, sheep and goats.
At the farm level, income would drop by $47 million in the cattle industry and $64 million in the sheep industry, according to one 2011 study - at today’s prices that would be much more, he said.
“Last year, the industry delivered the highest ever cattle export numbers but Columbia and Brazil are now knocking on the doors of our importing countries and Indian buffalo meat has made its way into the most important market for the northern cattle industry – Indonesia,” Mr Galvin said.
“As these countries come knocking, we need to think deeply about our competitiveness.
“How can we streamline to extract more value from our supply chain. Or do we face the loss of market share?”
