CHANGES to international shipping regulations may further drain the economical viability from the live sheep game and see it fade as a marketing option for producers regardless of what plays out politically.
The new International Maritime Organisation requirement for ships to use fuel lower than 0.5 per cent sulphur content from 2020 could deliver a significant cull of live export ships.
Combined with potential measures in Australia around heat stress management and one-tier shipping, the development has animal protection groups warning farmers supplying the live export trade it’s time to start the transition to other markets.
Producer groups are adamant live exports can and should continue to play a role in the sheep industry and live export business operators say claims about the impact of new regulations is pure speculation on commercial matters well outside the knowledge base of animal rights groups.
However, the term ‘back door ban’ is certainly being bandied around the industry and many sheep suppliers have expressed genuine concerns about the trade’s future.
The IMO says the new fuel rule aims to reduce the impacts of sulphur oxide emissions on the environment and human health.
Alternative fuels including methanol and liquefied natural gas are more expensive and the IMO approved methods to reduce sulphur oxide emissions, retrofitting an exhaust gas cleaning system or scrubbers, would come at a cost.
Animal welfare veterinary group Sentient believes the move will vastly reduce the capacity and capability to move animals by sea, given the average age of the live export fleet.
It estimates more than 50pc of live export ships will go as a result.
“It would take a very non-risk averse investor to begin new builds with the growing meat trade and reduced approval of the live export trade, hence the trade will likely die off sooner rather than later,” said Sentient’s Dr Rosemary Elliott.
“As veterinary practitioners, many whom work with primary production animals and farmers, we believe producers deserve the information in a timely manner so they can begin to diversify.”
Meanwhile, the Australian Maritime Safety Authority’s draft of Marine Order 43, currently on public consultation, proposes livestock only be carried on one tier.
It proposes a phase in period for sheep, pigs and goats until the end of next year.
There are three double tiered vessel services in the Australia fleet. One operator has a single tier due to arrive here next year but the other operator may opt to redeploy the vessels to other markets such as Europe and South America, where the new standards won’t apply.
To continue to operate out of Australia, that exporter would need to purchase an existing livestock vessel, commission a conversion or charter from other operators.
The shipping changes come amid analysis this week saying one of the recommendations in the recent McCarthy live export review effectively constitutes a ban on the summer live sheep trade, given it requires such drastic changes to animal welfare standards that exporters would have been left with no other choice than to close down.
The recommendation drastically lowers the level of what is deemed an acceptable level of heat stress sheep can endure on their journey and the report’s projections say ships could face stocking reductions by as much as 85 per cent, the Sydney Morning Herald reported.
Agriculture Minister David Littleproud said this recommendation was “a good one - it could create incentive for exporters to invest in better boats which improve animal welfare” but it requires further science and testing, which he has committed to doing in coming months.
Whether all this does mean, as the anti live-ex lobby argues, the sun is setting on the trade is difficult to ascertain.
That is particularly so given the reluctance of live export businesses themselves to comment for both commercial sensitivity reasons and the fear of flak on the back of general anti live-ex sentiment.
Australia’s two largest live sheep markets, Kuwait and Qatar, are both government-backed food security initiatives, so they are more likely to absorb higher costs in the short-term.
Under the McCarthy provisions, this will include the trade during the northern summer, when demand is higher leading up to Eid Al Adha in August.
But other Middle East markets - Israel, Jordan and Turkey – are far more price sensitive and already import significant numbers of livestock from other regions such as Europe and South America.
The viability of these markets for Australian sheep and cattle is now very much unknown, especially when factoring in significantly reduced summer stocking densities.
Take note, cattle producers
Red meat leaders and producer groups are starting to become more vocal about the fact the cattle industry needs to be paying more attention.
A ban on live sheep will most certainly impact the export of cattle, they say.
More than half a million cattle have been exported from Australia to Israel alone in the past decade.
In the past year, more than 100,000 have gone via the Red Sea, predominantly to Israel and Turkey.
Cattle exported to the Middle East are typically shipped with sheep so a long-haul sheep ban would decimate the number of cattle exported to the Middle East, producer groups argue.