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Outlook for Australian red meat industry ‘very good’: MLA

The outlook for Australia’s multibillion-dollar red meat industry is excellent, with disruptions to exports caused by COVID-19 showing signs of recovery according to Meat and Livestock Australia.

MLA productivity and animal wellbeing group manager David Beatty delivered the encouraging news at the Australian Association of Agricultural Consultants 2021 conference in Perth today.

Dr Beatty said he was confident the industry would meet the growing demand for Australian beef and sheepmeat, with the national cattle herd and sheep flock both in a rebuild phase.

“The outlook for the red meat industry is very good,” he said.

“We’re very confident there’s enough people in the world who are prepared to pay for premium red meat products.

“With the integrity that Australia can offer on the global stage when it comes to being safe, secure, clean and green… there’s plenty of people in the world that can afford to pay for it.”

Australia is the world’s largest exporter of chilled sheepmeat and the second largest exporter of chilled beef, with about 70 per cent of domesticly produced red meat shipped or flown overseas.

Dr Beatty said the EU and US – which has seen a recent explosion in demand for Australian lamb and mutton – were particularly appealing markets due to their high populations of “decent” income earners willing to spend on quality red meat.

The looming free trade agreement between Australia and the UK was also a promising development.

“Although it hasn’t been signed, the Australian-UK free trade agreement in principle has been agreed to,” Dr Beatty said.

“When that comes into effect, which we’re hoping will be early in the New Year, all of a sudden our access tariff-free into the UK will move from 3700 tonnes (of beef) to over 35,000 tonnes.

“When you’ve got a high value market like that and you can flick a switch and get an increase in volume, it just demonstrates the demand and the value that’s there.

“From a sheepmeat perspective, it’s the same: we go from 13,300 to immediately 25,000, and then over 10 years we essentially get unrestricted access into the UK.”

MLA productivity and animal wellbeing group manager David Beatty.
Camera IconMLA productivity and animal wellbeing group manager David Beatty. Credit: Zach Relph

Australia’s national sheep flock is showing signs of growing again after dropping to just 64 million head in 2020 – the lowest number of record.

And Dr Beatty said a second year of improved conditions was expected for key sheep growing regions.

“Our forecasts are indicating growth, particularly with the break of season that we’ve seen on the east coast,” he said.

“Coming out of drought, all the forecasts are suggesting an increase in flock numbers, and that’ll be driven from the east.”

He said there were similar forecasts for Australia’s beef herd.

“Coming off record lows based on the drought that we’ve seen on the east coast… our expectation is for some significant growth in the beef herd as well over the next few years,” he said.

“The demand is there, the supply is tight, but obviously with the seasonal conditions all going well, we expect to see that supply being able to increase enough to match the global demand.”

Dr Beatty would not speculate on when surging domestic beef prices would ease again.

Despite the “havoc” COVID-19 wrought on global markets, he said things were returning to normal.

“When 70 per cent of your product is heading overseas, when you’ve got challenges with air freight and sea freight, of course there’s going to be significant impacts there,” Dr Beatty said.

“At one point, exporters weren’t able to shift that chilled product overseas so you could go to the supermarket and buy a whole cube roll of strip loin for $15/kg… but that’s all sort of evened itself out now.”

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