Through sixty years of running cattle in northern Australia, John Underwood has seen the full evolution of the live cattle export market, from helping transform the Top End from pastoral backwater into a highly efficient arm of the nation’s meat and livestock industry and now back to the brink of collapse.
The veteran Northern Territory cattleman gave a candid and at times disarmingly honest account of the impact that the Indonesian live export market closure had had on his family’s business and the northern Australian industry generally.
Mr Underwood and son Patrick represented the family-scale producing sector among speakers involved in a Senate Rural and Regional Affairs committee hearing in Darwin today as part its inquiry into animal welfare standards in Australia’s live export industry.
The Senate committee heard from representatives of businesses and organisations engaged in Australia’s live export industry, frm livestock transporters and producers to industry service delivery companies, industry leaders and the NT Government.
Among the Senators involved in today’s hearing were Greens Senator Rachel Siewert and independent Senator Nick Xenophon, both of whom have introduced draft bills to Parliament calling for a total ban on live animal exports.
John Underwood said long before northern meatworks like Wyndham and Katherine had started operations, live export had been occurring out of northern Australia to markets like the Philippines. Small shipments occurred through the 1980s, to a variety of markets, including Hong Kong.
“There was always the potential there, and with the help of Governments, a viable, healthy live export trade started to emerge,” he said.
Like many others, the Underwoods invested heavily in grazing land, operating Riveren and Inverway, two properties in the Victoria River district, and another in the Douglas Daly region specifically for the supply of live export market over the wetter months.
Together with the BTEC program, the advancement of live export had helped change the nature of the northern cattle industry.
“Before that, we were cattle harvesters, but after the BTEC program all of a sudden we were cattle producers, with controlled herds,” he said.
Today the Underwoods manage 40,000 head of Brahman cattle ‘specifically aimed’ at the live export market, run on about 5000sq km of country.
“Like everybody, we were shocked with the footage displayed on Four Corners, but we were very disappointed by the handling of the matter by Canberra,” John Underwood told the hearing.
Most of what had been done in Indonesia in the past two months could have been achieved without the need to close the trade down, he said.
“There was no need to insult the Indonesians by shutting down the trade,” he said.
“We are all going to have problems in the short term, but we hope that the Federal Government can help the northern industry get the trade back up to its full capacity again as soon as possible.”
Senator Judith Adams asked whether the Underwoods had first-hand experience or knowledge of families struggling to keep children at boarding school. Mr Underwood said while that was not yet evident, much of the pressure was still to come.
“Our bank has picked us up and helped us so far, but in the next month or two, they are going to have a good look at us and we will have to sit down and have a good talk with them,” he said.
Patrick Underwood, who manages one of the family holdings, worked in accounting and finance before returning to the industry as head of the NT Live Exporters Association, travelling regularly to Indonesian promoting the interests of the northern industry and livestock exporters.
He then worked for a period as MLA livestock exports manager, before returning to the family business following the purchase of Inverway in 2007.
“I’ve never been prouder to be a Northern Territory cattle producer than when standing in an Indonesian cattle, viewing well-conditioned, contented cattle that are in much better condition than they would have been if they had stayed at home, and providing employment for hundreds of Indonesians,” he said.
Heifers now 'unsaleable'
He said before the Indonesian market closure, the live trade was a valuable outlet for non-pregnant heifers, paying 190c/kg.
“Now, we can’t find a market for them. What we have done at home, due to the big season we have experienced, is turn those heifers into breeders. With calves, they might have a value to another commercial breeder somewhere.”
He said being blessed with a big season this year had bought some time, and provided the family with plenty of grass to look after the cattle, and try to find some alternate markets.
But other northern producers on lesser quality country were not as lucky, and would not be able to cope with larger numbers coming through.
Animal welfare and environmental disaster
Senator Back asked what the future prospects were like on those properties.
“The cattle stay on the property, and eat whatever remaining grass there is left,” Patrick Underwood said. “That not only brings animal welfare issues though lack of grass, but also lack of maintenance of waters and other infrastructure through absence of cash flow. There is also the longer-term risk of pasture degradation, and permanent damage by over-stocking and flogging country,” he said.
“I can’t see the animal welfare groups coming up to the VRD and helping feed all the cattle that are going to be in trouble over the next few months,” he said.
“So we have an issue of potential radical over-stocking, animals that haven’t been able to be exported with no commercial value in the south, and new calves arriving that creates not only an animal welfare disaster, but a rangeland and environmental disaster that will take years to get on top of?” Senator Back asked.
“Absolutely,” Patrick Underwood said. “It’s very difficult to bring country that has suffered severe degradation back into production quickly. It requires fencing-off from stock and locking-up for many years.”
Senator Fiona Nash asked whether the Underwoods supported the view that an appropriate funding mechanism to fund changes needed in Indonesia could be the foreign aid budget.
John Underwood said he thought the ideas he had heard during the hearing, including the foreign aid concept, were excellent.
Given his accountancy background, Patrick Underwood was asked by Sen Alex Gallagher what the breakeven price per kilogram on a Brahman steer was in the local region.
“It’s a year-by-year proposition, but I would say it is currently getting close to $2/kg,” he said.
Currently the local prices have dropped 50-60c/kg.
“Six weeks ago after our first mustering round we pulled of 1500 cows for sale, turned-off for a number of reasons, including lack of fertility and age. They were sold for two reasons. Firstly, it was part of our normal business plan and secondly, to make up for the fact that we could not put cattle on ships.”
"Processors simply don't want what we have"
“But for any northern Australian producer, it is a terrible experience to try to sell cattle to a southern Australian abattoir, because they simply don’t want what we have.”
“The processor ended up taking 800 of the 1500 cows available because of their size and condition. We have spent decades up here breeding a fertile Brahman animal that can walk long distances to feed and water. It’s a very frustrating argument for those people who simply suggest we should put them all on trucks to the meatworks – not to mention the $198/head freight from Katherine to Warrnambool meatworks in Victoria.”
The Underwoods had managed to contract some cattle for a small live export shipment later this month to the fringe market of Vietnam, and others into the Philippines, but at a big discount to former prices.
“But solutions have to be found early. If it is left too long, they become too weak to travel, anyway. It makes it imperative to re-open the trade as quickly as possible.”
Suspending the trade eight weeks ago did not stop Australian cattle being slaughtered in Indonesia, Mr Underwood said.
“There were 140,000 cattle on feed in Indonesia at the time of suspension of the trade, and there are still 40,000 cattle in feedlots now. There will be another 800 of those Australian cattle slaughtered tonight.”
In reality the closure was a publicity stunt by the Australian Government to placate certain interest groups.
“I have personally contacted seven Indonesian importers who are my friends and colleagues to apologise for the Australian Government’s decision,” he said.
“Both myself and my family, and they and their families, have done a terrific job to build a fundamentally sound and logical trade between our two countries,” Mr Underwood said.
MLA's 'incremental' approach sufficient?
Sen Rachel Stewart asked whether the Underwoods were satisfied with MLA’s ‘incremental’ approach to ‘ongoing animal welfare issues in live export over a period of time.’
“MLA has done all it could, with the resources it had. In hindsight, post-Four Corners, some might say it was possible to do more. But the important thing now is that there is an opportunity, both at a Government to Government level and an industry level to remedy the situation.
“After the Basateen animal cruelty footage aired in 2006, I took that tape to Indonesia and played it to every importer of Australian livestock, warning them that unless they worked with Australia, Indonesia would be next.”
That was the catalyst for some ‘really good work’ led by MLA, Mr Underwood claimed.
“It included the formation of an animal welfare task force, a stocktake of where Australian cattle were being slaughtered, and a commitment by the Australian Government for $375,000 for the installation of 50 restraining boxes. There was also a systematic approach of visiting abattoirs that Australian cattle were going to, and reviewing their facilities, including liairage, the use of restraining boxes, lighting and other issues.”
“Hence my disappointment and disgust to see Minister Ludwig state on national television that the Australian Government had no idea what was happening in Indonesia. There was no cruelty evident, as such in any of those visits, but it was a matter of this is the situation, there’s work to do, and this is how we are going to do it.”
“The Mark I restraining box was a move absolutely in the right direction because it allowed an animal to come into a closed box in an abattoir, and be properly restrained before slaughter.”
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