Live Export

Benefits of live exports to northern Australia quantified

Beef Central, 28/09/2022

 

Australia’s live cattle export trade contributes $1.4 billion to the national economy and employs 6,573 people, with more than 80 percent of direct value being contributed by northern Australia.

The region also contributes 74 percent of the farm gate value of the trade.

A new report commissioned by research bodies LiveCorp and Meat & Livestock Australia articulates the positive contribution of the industry, not just to producers and exporters, but to those who work in related sectors and regions.

In 2020-21, the live cattle export industry directly and indirectly contributed $363 million to the Northern Territory economy and employed 1,275 full-time equivalent workers (FTEs), $302 million and 1,605 FTEs in Queensland and $218 million and 966 FTEs in Western Australia.

ACIL Allen Executive Director Jan Paul van Moort, who conducted the study, noted that northern Australia regularly supplies more than 800,000 head of cattle to live exports annually, although that has been impacted in recent years.

“Cattle production systems in northern Australia have been transformed to meet the requirements of South East Asian markets.

“We analysed the value of the industry to 18 regions, from the Pilbara to the Bowen Basin. The distribution of the economic contribution varied, with three regions – Katherine, Barkly and the Kimberley – together contributing around half the value and the employment,” Mr van Moort said.

“As well as the value of the cattle, the contribution is measured by the industry’s impact on things like wages, salaries, profits and taxes.”

Mr van Moort said the project also sought to understand the impacts on northern Australia if the trade ceased, and the adaptability of the region.

“For example, the trade provides up to $88 million in value and 614 jobs for professional services industries related to live exports across Australia. There are additional flow on effects to other areas of the economy such as wholesale and retail trade, health and social services, education, and utilities such as electricity, gas, water and waste.

“If Australia’s live cattle exports were to stop immediately, average cattle prices across the country would drop by 2-4% almost immediately and the beef and cattle industry could lose up to $8.1 billion, over the next 20 years.

“Put another way, based on the current Eastern States Young Cattle Indicator, 4 percent would work out to be about $150 less for the average 350kg steer.

“Over time, we would expect producers in the regions to adapt by focusing on the domestic cattle market and pursuing other land uses.

However many producers would face a reduction in the price per kilogram for meat at processing, compared to what they achieve from selling to live export until they adapt,” Mr van Moort said.

LiveCorp Chief Executive Officer Wayne Collier noted that the value of the live export sector to northern Australia extends beyond the sale of cattle.

“The proximity of northern Australia and having a climate similar to its largest export destinations, particularly in South East Asia, are highly beneficial in terms of transportation costs and animal welfare, and the northern pastoral systems produce the high-quality livestock our trading partners value,” Mr Collier said.

“Conducting this analysis provides up-to-date information to help us to better understand the important role the trade plays to the communities and businesses of northern Australia.

“It’s important to also recognise how the live export trade affects the economic wellbeing of the whole supply chain. It’s not just rural and regional communities in Australia, but those in destination markets who rely on our cattle to help provide nutrition and contribute to food security and affordability.”

A copy of the ACIL Allen report, The economic contribution and benefits of the Northern live export cattle industry, can be found here.

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