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RURAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
20/10/2010
AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO
Meat and Livestock Australia

CHAIR —Welcome, gentlemen. Being mindful of the time of the evening, we will go straight to questions.

Senator BACK —Thank you very much for the opportunity, gentlemen, and thank you for appearing. My line of questions relates to the live sheep and cattle export trade. I am pleased to commend the minister for his strong stance in recent days on the continuation of the trade. You are aware of threats to the trade and I just wonder what action is being taken at MLA level to ensure a continuation of the live export trade for both sheep and cattle.

Mr Palmer —Thanks, Senator. May I also commend you and Senator Colbeck and others, who have also put your shoulder to the wheel on this, and echo our appreciation for the recent remarks from the minister. Live exports are an incredibly important component of the trade from Australia. Australia ships meat to about 106 markets around the world, about $100 million every week in beef and $20 million in sheepmeat, and some of our customers like it chilled and fresh, some of them like it warm and fresh. So it is a market demand and it is one that Australia is in the unique position to be able to serve and satisfy. Our concentration of effort, of course, is largely around the sheep trade into the Middle East and cattle trade into Indonesia. There are other markets, but they are the areas of great concentration.

Through MLA and LiveCorp, the industry—and with government funds through the research dollar—has put in an enormous effort around animal welfare, stock trading, animal handling in Indonesia. We have assisted in excess of 100 abattoirs in Indonesia with better slaughtering facilities and stockmen-training programs. We have worked at the feedlot level and right the way through into the abattoirs around stockmen training, better animal welfare and better treatment of the animals. Having fortunately had a trip to Indonesia not so long ago, I know the quality of the cattle and the quality of the feeding programs and the quality when they go to slaughter is just outstanding. Some of those northern cattle look a real picture after 100 days on feed. The industry has done a good job and there is still more to go.

Indonesia in particular has its own fragile nature, and we need to be very mindful of the politics and the trade and do stuff down here sensitively, keeping sensitivities as to the relationship in what is—I think if you add all the boxed beef and live cattle together in Indonesia—now probably our third-largest destination for beef. To have an Islamic community right on our doorstep with a beef-eating preference is a fabulous opportunity. We have seen our boxed beef grow to about 60,000 or 70,000 tonnes a year in Indonesia. I am not sure what the final number will be because there are some issues around permits. Then, additionally, the same thing is being done in the Middle East with handling programs, stock training and stock management as to how you move sheep. Merino sheep are different from a Somali goat, so they need to be treated differently. So the industry, through both LiveCorp and ourselves, has made a pretty big investment and it is making some ground. It is one that you never stop working on, because the issue of welfare and society’s values have got to be catered for and we have got to be cognisant of it all.

Senator BACK —I would just reflect on what has been largely unproductive conflict in the last couple of weeks, particularly with meat processors and those representing those who work in the meat industry, and I agree with you that all of our interests are best served by expanding all of these markets, not one component of them. What action has been or is being taken to try and engage with those other parties associated with beef and sheepmeat, to be able to perhaps come to a more sensible and long-term position, rather than be seen to be in conflict in the public arena?

Mr Palmer —That is a good question, because there is tension, but every now and then there is a good initiative. More recently, the minister for primary industry in Queensland hosted a gathering of live exporters and meat processors and a lot of good came out of it, with quite a clear action plan that needed to be done. So through the Red Meat Advisory Council, through elements of our own company, all the state farm organisations—there have been no amount of meetings and gatherings—I think right now the tension is not as pronounced as it has been, but there have been times when there has been tension, and I admit to that. More does need to be done in getting the people around the same table and working out how we progress this. But the live trade overall is not dissimilar to previous years: the competition for livestock is no more or less fierce. It just seems that, for reasons I cannot explain, the tension has been a little more pronounced perhaps in the last year—not so bad now, but in the last year it has been—and, yes, we have to do more to get them around the same table.

Senator BACK —Would you agree that we need to get more information out to the wider community? If you look at, for example, cattle in Queensland and if you reflect on the proportions that have gone to slaughter as opposed to those that have gone to live export, the proportions have remained very similar—the proportion to live export is incredibly low—and, where there has been a change in equilibrium, it has been, in my view, due to poor seasons. These assertions that animals going for live export in some way are adversely impacting on those being slaughtered are wrong, and I wonder how this information can be released more openly and widely to that sector of the community that is concerned about them?

Mr Palmer —I do not have a clear answer, other than that it is pretty well known amongst the industry circles as to the volumes of cattle moving out of various ports. I think, if I can be a little candid, when live exports moved more to the eastern seaboard probably the tension rose a little more. Cattle out of the Territory and Kimberley and the Pilbara is an anticipated and an expected line of trade; the business is geared around live exports. So I guess when live export numbers start to shift out of North Queensland the tension starts to rise. But the numbers, as I recall, coming out of North Queensland at the moment are not as great as they have been in previous years, so they are not at their historical highs.

Senator BACK —They are not.

Mr Palmer —And that needs to be better understood and the information made more available.

Senator BACK —Turning to the sheep, the reality is that in Western Australia sheep numbers have dropped off simply because farmers have not been able to get the return per hectare from sheep production. If the sheep are not available then they are not available for slaughter or for export and, if the number of sheep continues to decline in Western Australia, we will be importing sheepmeat from somewhere else fairly soon. I am appreciative of the work that the organisation is doing.

Mr Palmer —We would like to echo our appreciation of the comments of Senator Back and Senator Colbeck that have been in the press of late, in getting behind the live export business. It is a very important part of our programs. Senator Nash too, I am awfully sorry.

Senator NASH —That is quite all right, Mr Palmer.

Mr Palmer —It is interesting; the demographics of the sheep flock are changing enormously. It was not that many years ago that we had 180 million sheep and today we have 70 million, but our land tonnage is higher, so it is shifting. The demographics have shifted somewhat from a wool flock—not entirely, naturally—to meat-producing sheep, and that of course creates changes in the flow of animals. So your older animals—wethers and culls et cetera that might have gone live—are now more likely to be processed as lambs.

CHAIR —Yes, and the minister has stressed more than once today how important the live trade industry is to Australia. Thank you, Mr Palmer.

Senator COLBECK —Being a better season, is there a cohort who are actually hanging onto their animals to rebuild their stocks at the moment? Is that a factor, particularly on the east coast where there are people who, having run their stocks down over the drought, are looking to rebuild a little bit?

Mr Palmer —Surveys continue to show that the farmer ambition is to build their numbers, most definitely.

Senator COLBECK —And that would have an impact on the throughput and availability for both live trade and abattoir?

Mr Palmer —Yes. How people survey and how they act can often be quite different. Surveys are very aspirational and there is a pent-up demand definitely to build numbers and build stock. I may have to take it on notice just to get the flow of slaughtered animals going forward at the moment, but our lamb tonnage over the last three years is right up there with record numbers, but that is more a reflection that the demographics of the flock are changing. There is no doubt that there are a lot of people moving into crossbred or meatsheep varieties and that is evidenced. The demand for merinos, the demand for good breeding stock, at the moment is quite high and it is driven by the current state of the market and a tremendous season on the east coast.

Senator NASH —Has MLA done any work into the potential impacts of reduced water allocations across the basin on the meat industry, or are you planning to?

Mr Palmer —Through the Murray-Darling Basin?

Senator NASH —Yes, the Murray-Darling Basin. I was interested to know if MLA were taking into account any potential impacts down the track on the meat and livestock industry if we do move to a situation where water in the basin has decreased. I am happy for you to take it on notice, if you like.

Dr Johnson —We do not have any current work, nor have we looked at it recently. You would realise that, with the water allocations the way they have been in the last few years, there has not been a lot of water around for any sort of agriculture and certainly not for finishing livestock.

Senator NASH —But that is very different from it being permanently removed.

Dr Johnson —Sure, but livestock production will always be marginal for irrigation, and that is the way it is trending and has trended. I am talking about meat rather than dairy. On the figures I can recall, I think livestock production generally is about 13 per cent of irrigation, so it is quite small. There is quite a lot of difficulty in teasing out dairy versus meat, but the trend has been for a long time that there is less and less meat production coming off irrigated pasture.

CHAIR —If there are no more questions, thank you very much, Mr Palmer and Dr Johnson.

[10.15 pm]