50pc drop in live cattle export value

22 Apr, 2013 02:00 AM
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2
 
Source: MLA
Source: MLA

AUSTRALIAN live cattle exports are half the value they were 22 months ago and live sheep exports are about a quarter of the value they were 17 months ago.

And it all because of the Exporter Supply Chain Assurance System (ESCAS) and Indonesia's decision to cut its import quota according to Meat and Livestock Australia's (MLA) chief economist Tim McRae.

Based on MLA's latest figures in May 2011 - just prior to ABC's Four Corners program 'A Bloody Business' - exports for the month were about 110,000 head of cattle with a trade value of more than $100 million.

But in the latest figures for February this year, live cattle exports were about 40,000 head with a value of under $60m.

Since the decision to halt the trade, the live cattle and the live sheep export industry have gone through dramatic changes with the introduction of ESCAS and the cutting of the live cattle import quota in the last two years.

Another interesting figure was that between July 2011 to Feb 2012 - 253,028 cattle were exported live to Indonesia, but during the same period in 2012-2013, Australia had exported just 35,234 head of cattle.

This equates to an 86 per cent drop.

During that same period, live cattle exports overall were down 14pc, from 445,436 to 382,214 head of cattle.

In February last year, 32,407 head of cattle left for Indonesia, but February this year saw just 10,843 cattle leave.

And with the 2013 import quota now at just 238,000 for live cattle, WA and the Northern Territory producers will be fighting for the limited quota space.

As Farm Weekly went to print, ABC radio reported that the lack of import permits and good supply of cattle in the northern end of Australia was pushing price down.

Steers were reportedly getting about $1.60 a kilogram, down from $1.90 a kilogram this time last year.

Pastoralists in the north of WA are competing among themselves and pushing the live cattle export price down to try and get rid of their cattle to Indonesia.

With limited live cattle spots available following another cut in Indonesia's live cattle import quota to 238,000 for this year, pastoralists are doing all they can to get their cattle on boats as soon as possible.

Import permits issued by Indonesia were just 60,000 in the first quarter of the year and 120,000 for the second quarter but it is unknown how many cattle have already gone.

It is understood as many as four live cattle boats are heading to Broome during April, but they will only load 10,000 cattle from the Kimberley.

Elders livestock agent Kelvin Hancey said Indonesia was only chasing high grade Brahman cattle which was making it tough for the Droughtmaster breeders.

"The pricing structure is on an easing trend and that looks set to continue," Mr Hancey said.

"I don't see anything that is going to turn it around in the meantime unless we run out of cattle and even if we run out here, we keep hearing that the Northern Territory and Queensland have plenty."

Live sheep export values had also dropped significantly since September of 2011.

During the period of July 2011 to February, 2012, 1,677,528 live sheep were exported, while in the same period in 2012-2013 there were 19pc less sheep with just 1,357,510 sheep leaving the country.

ESCAS was brought in for sheep markets at the beginning of 2012.

Key market Saudi Arabia is yet to become ESCAS compliant and is unlikely to in the near future.

Mr McRae said it was clear that it was not seasonal conditions which were leading to less livestock numbers heading overseas.

"It is ESCAS and the Indonesian situation," Mr McRae said.

"And that whole reason as to why the numbers aren't going, directly relates to the value."

Mr McRae said MLA had chosen to stop doing future projections on live exports because of the ESCAS-accreditation process making it hard to analyse.

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READER COMMENTS

Real Deal
23/04/2013 9:10:35 PM, on Farm Weekly

So now you're saying it's a half a billion dollar industry then?
Barker
24/04/2013 5:20:30 PM, on Farm Weekly

A cruel, greedy and ugly trade that should not exist. Ban live export - it's a disgrace to Australia.

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