THE tough conditions that have led to possibly the longest lull the live cattle export business has seen are still the best part of a year away from turning around, industry projections indicate.
However, the medium and long-term outlook is very promising, with forecast increases in beef consumption in Australia's largest live cattle market, Indonesia.
Meat & Livestock Australia's 2022 cattle industry projections show the challenges that have plagued the trade - tight cattle supply, record high prices and pandemic-related logistical disruptions - will continue and lead to a further softening of numbers exported this year.
"There have been challenges in terms of delivering cattle to markets, the opportunity of the southern markets and prices on offer for traditional live export suppliers and exponential upward pressure on prices - all this combined was probably something the industry has not had to deal with before," MLA market information analyst Ripley Atkinson said.
Around 770,000 head were exported in 2021, 26 per cent less than the year before, and this year's forecast is for just 750,000 to go overseas.
Looking ahead, however, MLA expects numbers to get to 830,000 head by 2023 on the back of the ongoing herd rebuild and that number should be higher again in 2024.
"The current La Nina rains in the north and a potentially longer wet season will bear fruit after 2023," Mr Atkinson said.
"Increased supply and an easing cattle market should see live exports begin to trend up again quickly to meet demand."
Indeed, an important piece of the picture through these challenging times had been Indonesian resilience, Mr Atkinson said.
"Exports here in 2021 were down 12pc on the previous year - we sent 409,000 head to Indonesia - but given the challenges, that could be seen as a positive," he said.
The strength of Indonesian demand certainly provides fodder for optimism, live exporters say.
MLA says Indonesia's economy has bounced back strongly from pandemic woes, with gross domestic product growth of 3.7pc last year, Current forecasts have it accelerating at 5.2pc in 2022.
Australia sent just over 45,000 tonnes shipping weight of boxed beef to Indonesia last year, only 5.4pc below 2020 volumes, another exceptional outcome given the shortage of cattle on home soil.
Indonesians eat 3.1 kilogram per person of beef and that is forecast to increase by 2.2pc from 2022 to 2026.
Increased imports will be needed to keep pace with those demand forecasts, MLA analysts say.
The live trade is well-placed to capture a large slice of that opportunity, given the multitude of benefits it offers both countries, chief executive officer of the Australian Live Exporters' Council Mark Harvey-Sutton said.
"Australian cattle have an established standing. We just have to work through current conditions," he said.
"Wet markets and daily beef consumption is embedded in Indonesian culture. The live cattle trade suits Indonesia's cultural needs, food security and economic needs.
"High cattle prices can impact our competitiveness and it is commercially hard going at the moment but this needs to be seen in the context of ebbs and flows of the cattle market.
"The really positive thing is there is still a desire to purchase our live cattle."
Asked about how exporters were weathering the downturn in activity and whether it could lead to industry exits during 2022, Mr Harvey-Sutton said some companies ship livestock from other countries, some have diversity of income built in but the response in general was that exporters were well-attuned to prevailing market conditions - they plan for downturns.
"And there are cattle being exported, which is reflective of the quality of Australian livestock and our standing in markets," he said.
In Vietnam, Australian cattle exports this year will depend to an extent on Brazilian imports.
"Vietnam purchased a boatload of processor-eligible cattle from Brazil last September at a lower price point than Australian cattle," Mr Atkinson said.
"It remains to be seen whether that continues and if so, in what sort of numbers."
Certainly, Brazil will have the cattle to ship, having begun a liquidation phase during 2021.
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Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
