Survey points to a flow-on effect
Suspending live cattle exports to Indonesia will flow through the Australian beef and cattle industry according to Meat and Livestock Australia (MLA).
In its latest weekly meat and livestock report, it said WA and Northern Territory pastoralists with no other outlet for cattle would be hardest hit.
While the domestic market did not see much change last week, a surge of cattle in the short term is unlikely, according to the producer body.
Cattle destined for Indonesia, light weight Bos Indicus 350kg or less, would require long periods of feed to reach Australian and export slaughter weight.
The outlook for cattle prices is grim with sluggish demand from Japan and the US and a near-record high Australian dollar.
If the trade suspension isn’t resolved, heavier cattle will hit the slaughter market within six to 18 months and impact on local sales.
Without live exports, prices will fall 4 to 18 per cent, according to the Centre for International Economics.
Figures released in March found live weight prices would fall 7.8c/kg for grass-fed cattle, 12c/kg for lambs and 14.6c/kg for older sheep.
The projections were included in a 78-page analysis on live export contributions to the red meat industry and regional communities.
Without live exports, the report said an additional 520,000 cattle would need to be processed and would cost $80 million to transport — or 40 to 45c/kg.
Pastoralists and Graziers Association spokesman Sheldon Mumby said WA processors would have to deal with 240,000 head of Bos Indicus cattle from the fallout of suspending trade to Indonesia.
“Processors don’t have this capacity,” Mr Mumby said.
“They will say they can take pastoral cattle but their biggest problem will be getting staff.
“Such an influx will not only bring down cattle prices for northern producers but also reduce prices for South West producers.”
“We also have the State’s biggest abattoir, Harvey Beef, not putting up its hand, saying it has capacity and can process these animals — that shows it has grave concerns.”
Last week, Western Meat Packers and V&V Walsh said they would be happy to process pastoral cattle with the latter saying if live exports were phased out, it would be confident to invest in expanding its infrastructure.
Geraldton Meat Exports (GME) has lobbied the State Government for 18 months for funding assistance to expand into cattle to supply China with frozen lean meat.
GME general manager Paul Jones said the expansion would cost $8–$9 million with capacity to process 200 cattle a day from May to September.
“The Chinese market is after lean meat and the pastoral cattle suit that market, ” Mr Jones said.
Not all processors will take pastoral cattle.
Gingin Meat Works general manager Adam Hill said pastoral cattle were not suited to its market.
A report in 2006 by Hassall and Associates, found total closure of live exports would cost $620 million in the first year and $550 million each year after.
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