A KEY reason the 2011 suspension of live cattle trade was so devastating to Australia’s northern beef industry was its reliance at the time on Indonesia.
Northern Territory Livestock Exporters Association chief executive officer Stuart Kemp said northern cattle producers have, like all Australian producers, access to numerous markets for sale cattle.
“The key differences are vast distances to market making it uneconomical to freight cattle to meat processors, common and routine use of hormone growth promotants which excludes many red meat markets and high Brahman content which limits demand from the domestic retail market,” he said.
“These factors have made live export the only real economical and reliable market option.”
Typically around 60 per cent of the Northern Territory’s sale cattle go to live export.
In 2011, up to 95pc of cattle exported went into Indonesia.
The Vietnamese trade was not yet opened, Malaysia was out and the Philippines and Brunei where taking limited numbers.
Since then it has been an industry strategy to diversify.
“It is good business to minimise the exposure to any single market,” Mr Kemp said.
“Export companies, industry bodies and governments, both state and federal, have been committed to growing and strengthening the trade.
“Exporters have invested significant resources into opening up new markets in places like Vietnam, Thailand, Cambodia and Laos.
“Some of those markets are not quite there yet, but the Vietnamese market has been a valuable second market.”
Vietnam is still considered an immature market and work there is ongoing but the industry is fast strengthening the adoption of ESCAS fundamentals across a growing number of facilities.
Indonesia remains the largest buyer of both feeder and slaughter cattle, taking 147,000 head in the first quarter of this year.
However, exports to Vietnam were around 71,000 head and that figure was back 25pc year-on-year.
Kimberley Pilbara Cattlemen’s Association executive officer Catherine Marriott said there was always a risk with having most of our eggs in one basket.
“The suspension made us rethink our market risks and has ultimately made us a stronger industry, although that could have been done with more consultation and respect,” she said.
Ms Marriott’s early days in the live export industry was as an advisor to Indonesian feedlotters on nutrition, low stress stock handling, feedlot management and artificial insemination
After the suspension, she moved into a more specialised animal welfare role with a particular focus on abattoirs.
“I have never seen such dedication to creating change as I did at the Indonesian processing level,” she said.
“I guess that will happen with you cut off someone’s food supply.
“The professionalism of the stunners, the speed at which they learnt and the traceability systems they put in place far exceeds what we currently have in Australia.
“One company has a live tracking and triple back-up system.”
She described the suspension as the worst international relations disasters of our time.
The long term effects of the handling of the suspension have been a mistrust between the Australian and Indonesian governments, she said.
“You don’t just cut off someone’s food supply chain based on a value set that you have as a country with no understanding of the system or the requirements of the people involved,” she said.
“You certainly don’t do it without respectful consultation.”
It would take substantial time to earn back trust.
“Both Indonesia and Australia are working hard to set longer term strategies,” Ms Marriott said.
“The private sector between both countries has always had strong business-to-business relationships, however the industry is governed by our political leaders and the memories of government’s are long.”
Despite the way it was handled, there had been massive improvements from an animal and human welfare standpoint.
“I believe those improvements would have still happened if our government of the time had handled it with a little more consultation and decorum,” Ms Marriott said.
Mr Kemp said it was now understood that importing Australian cattle comes with a much greater responsibility on welfare and traceability.
“These fundamentals are monitored closely and importers who are unable or unwilling to comply are removed from the supply chain,” he said.
Vietnam grew quickly to 300,000 head but that may contract slightly as new facilities consolidate and iron out their optimal functioning capacity.
Mr Kemp said the other markets appeared to have the capacity to grow.
Are we better placed today should the Indonesian market collapse?
Only slightly.
The addition of the AACo abattoir near Darwin and the welcome inclusion of Vietnam as a trade partner had certainly helped, ‘but our reliance on the Indonesian feeder market is still very high and, unfortunately, a similar shutdown would be just as catastrophic,’ according to Mr Kemp.
Bad timing
THE suspension also came at the worst possible time, seasonally.
Mr Kemp explained the north has two very distinct seasons, the wet season and the dry season. During the wet season pastures are revived and stock feed and waters for the following season are recharged.
Mustering takes place during the dry season, where calves are branded and bigger calves are weaned.
It is important that sale cattle are removed from the production system to make way for the next crop of weaners, he said.
“If sale weaners are not shifted, feed resources will be exhausted and stock may run out of feed,” he said.
“The 2011 shutdown occurred in June when the country was dry and pastures had hayed off and feed quality rapidly declines.”
