Livestock exports

With animal welfare becoming more of an issue worldwide and sustainable food production, I believe it is high time we opened the live export of cattle and sheep to serious debate. I am not sure the structure of industry organisations is permitting such debate.
GRAPHIC SOURCE: MLA LIVELINK

Recent exports of sheep by month is shown in the graphic.

It seems export of cattle to Asia will continue to increase and one wonders if the same scrutiny of animal welfare in Australia is applied to the myriad of facilities used overseas to slaughter cattle.

I remain to be convinced that it is more than an opportunistic trade. Growing middle classes and awareness of food safety may prompt faster growth of higher standard butcher shops and supermarkets compared to the illogical idea of needing to visit wet markets every day. Incomes are rising rapidly and we do not need to be stuck in the 1850s in the developing economies, where corner slaughterhouses and open markets existed all over the world. Comments welcome.

Steak budget

Discussions and lobbying continues on the meat labelling and grading debate.

A relatively new regional player, Foodworks, who has acquired smaller Coles and BiLo stores, has the products priced per the image.

A visit to one of their stores showed budget rump steak at $6.99 per kg and budget boneless sirloin steak at $14.99 per kg. The product was branded Primo and the steak appeared to have the classic yellow fat associated with cow beef.

Interestingly the local butcher has rump steak priced at $23.75 per kg and sirloin steak at $27.95 per kg.

To read the Senate commitee report click the link.

to read Hunt Partners blog, visit here.

to read Richard Torbay MP NSW bill, visit here.

It appears some sectors of industry favour the status quo while activists look to establish a grading system and far greater scrutiny of meat labelling.

AUS-MEAT definition of "budget" is shown here. Information has been circulated by the press in relation to the range of qualities and products produced by plants in this category.

Let the buyer beware is probably still the way to go.

Trends in trade cattle prices

The following chart prepared by the writer from MLA published figures and ABS published CPI indexes indicates trends over time. While the average annual trade steer price in 2008-2009 was $3.34 per kg carcase weight equivalent, recent weeks have shown a downturn to quite low levels of $3.10 per kg carcase weight (National Saleyard Indicator MLA).

One can argue how sustainable beef production is at these low levels with even greater pressure on returns due to the stronger Aussie dollar.

Corporate beef producers are also showing poor returns and they should have much greater comparative advantage than smaller southern producers. Comments welcome

El Nino conditions possible in Australia?

The Australian Bureau of Meterology (BOM)is reporting some disturbing indications of future rainfall in southern and northern Australia in the coming season.

Read the report here.

Southern Western Australia is looking better but south east Australia will find it very tough to endure yet more rainfall deficits. Lets hope the indications prove wrong as it appears the indexes are still inconclusive.

Value of livestock production - producers share?

ABS has released their annual value of production figures for 2007-2008. Value of cattle and calves slaughterings has fallen from almost $8 billion to $7.35 billion Australian. A fall of 8% or $634 million.
Sheep and lamb slaughtering values are up to $2.167 billion, up 5% with higher prices.

It is interesting to note that retail meat prices continue to increase with rump steak selling at an average price of $19.83 per kg in Sydney in June 2009 compared with $18.40 per kg in June 2008, a rise of 7.7%. (also released by ABS today).

The unit value of cattle and calves slaughtered dropped to $779 per head in 2007-2008, down $36 per head from the previous year. It is hard to see how that leads to any great enthusiasm to expand herds. Even corporates had a poor year in the beef industry.

Southern Australian beef producers - sustainability?

The recent ABARE report - Australian Beef 09.1 has some interesting data on Southern Australian beef producers. The report shows that farm business profit has been negative for the last 3 years, except for the largest producers in 2008-2009.
Rate of return excluding capital appreciation is minimal and negative in most cases.

The disturbing trend is that farm cash income is less than the Australian average wage cost and generally less than $50,000 per annum. One cannot get too excited about producing beef for these negative returns and minor incomes. Given drought conditions that have dragged on in the Southern states, it is a sobering assessment.

Russian meat import approvals

The latest list of Russian approved Australian meat plants is located here.
It appears that a total of 94 establishments are approved but a staggering 18 plants have temporary restrictions. Those restrictions date back to around June 2008.

Industry organisation advice back in January 2009 indicated that "the situation is fluid." Fluid implies movement, frozen appears more appropriate.