Positive outlook for red meat industry

Positive outlook for red meat industry

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Red meat supply is expected to improve as drought eases across the nation.

Red meat supply is expected to improve as drought eases across the nation.

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Australia exports 70 per cent of its red meat, offering a protein that is safe, secure, and clean and with integrity systems in place there's no sign this will slow down in the future.

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RED meat is on the up and up thanks to continuing demand and tight supply.

According to Meat & Livestock Australia (MLA) program manager value chain research, development and adoption David Beatty the red meat commodity outlook was "very good".

Australia exports 70 per cent of its red meat, offering a protein that is safe, secure, and clean and with integrity systems in place there's no sign this will slow down in the future.

"We are very confident that there are enough people in the world who are prepared to pay a premium for quality red meat products or protein," Mr Beatty said.

"We believe demand is going to be there in the future."

The red meat market is worth about $11 billion, with the domestic market still playing a significant role.

The sheep market has combined value of more than $4b for boxed and chilled products, with live export accounting for $154 million last financial year.

Mr Beatty said the most significant change for the red meat industry would be the free trade agreement between Australia and the United Kingdom.

"When that comes into effect, which we are hoping will be early in the new year, all of a sudden our access changes," he said.

Mr Beatty said when the agreement kicked in, Australia would have a massive spike in exports to the UK overnight.

"When you've got a high value market and you can flick a switch and get an increase in volume, again it just demonstrates that the demand and value is there," Mr Beatty said.

The MLA expects the same effect to happen to sheep meat.

Over the past few years we have seen tight supplies in both beef and sheep due to heavy droughts in the Eastern States, however that is predicted to change as the drought eases.

"All the forecasts are predicting an increase in sheep flock numbers and that will be driven from the east," he said.

"Not dissimilar for beef herds, our expectation is for significant growth as well over the next few years.

"The demand is there, the supply is tight, obviously with seasonal conditions all going well, we will be able to see that supply increases enough to be able to match the global demand that's there."

Japan was a consistent importer, taking 27pc of Australian beef exports.

Due to the African swine fever decimating Chinese piggeries, the past few years have seen strong demand from the Chinese market as it looks for replacement proteins.

Although Mr Beatty has seen demand from China starting to slow, he said it still remained one of Australia's key markets, along with Korea and the United States.

For lamb, China and the US continue to be strong markets.

"Australia and New Zealand put more lamb into the US than the US produced itself, so it's been a great market, although it's still a niche protein in America," he said.

As with all commodities, shipping continues to be a challenge, with a decline in air freight as well.

"Australia is the second largest exporter globally of chilled beef and we are the biggest exporter of chilled lamb, so when you rely on a chilled product and air freight to ship it and you've got no airplanes flying around it can be pretty difficult," Mr Beatty said.

That resulted in a repositioning of the market, seeing quality cuts of meat becoming available in Australia for record low prices and overseas more frozen meat was used to meet the demand for the chilled product.

As air freight slowly returns to normal, these challenges are set to rectify, allowing Australia to return to meet the strong global demand.

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