AUSTRALIA is in a good position to capitalise on rising global meat demand as a mass herd liquidation in the United States provides a positive outlook for export markets, according to the Australian red meat and livestock industry State of the Industry Report 2022 released today.

The report produced by Meat & Livestock Australia (MLA) provides an overview of Australia’s red meat and livestock industry from the prior calendar year, and includes figures on production, consumption, exports and the economic significance of the industry and key issue snapshots. This edition examines financial year 2020-2021 and calendar year 2021.

Australia’s red meat and livestock industry’s turnover totalled $67.7 billion in FY2020–2021, accounting for approximately 1.7 percent of Australia’s total key industry turnover. Industry turnover is defined as income generated by businesses within the industry from the sales of goods and services.

MLA Managing Director, Jason Strong, said the report highlighted the resilience of Australian red meat producers in the face of both domestic and global challenges.

“In 2020–2021, Australia’s red meat and livestock industry experienced exceptional operating conditions at the farm gate level. Bolstered by above-average rainfall, we have seen a continuation of the national herd and flock rebuilds,” Mr Strong said.

“The strengthening of these rebuilds has come during the COVID-19 pandemic and associated lockdowns, as well as global disruptions. These events have altered consumer behaviour and significantly impacted cost of living and the global supply chain.

“Despite the challenges, Australian red meat is in amazing shape. We are the number one exporter for both sheepmeat and goatmeat, as well as the fourth largest beef exporter globally.”

Minister for Agriculture, Fisheries and Forestry, Senator the Hon Murray Watt noted that this report shows Australia’s red meat and livestock industry is in tremendous shape.

“MLA’s report shows the strength of Australia’s red meat and livestock industry. It’s no surprise that Australian meat is seen as a high-quality product both domestically and overseas,” said Mr Watt.

“The last few years have seen a number of challenges thrown at the sector, but the industry is in great shape. I’m very pleased to continue working alongside the industry to achieve the best outcomes possible.”

Exports

Red meat and livestock exports fell 22pc year-on-year to total $14.6 billion in 2020–2021. However, this is 11pc higher than 2016–2017 levels. The fall in exports is due to lower livestock supply, a result of the national flock and herd rebuild that occurred in FY2021.

For calendar year 2021, China held its position as the largest importer of beef and veal in volume terms, followed by the United States and Japan. While China was also the largest importer of sheepmeat in 2021, followed by the United States and the United Kingdom. The largest goatmeat importers were the United States, Taiwan and South Korea.

Queensland continued to be the largest exporter of beef and veal in 2020–2021, accounting for approximately 54pc of Australia’s beef and veal export volumes. Victoria is Australia’s largest sheepmeat exporter, accounting for approximately 40pc of total sheepmeat exports.

With the United States currently in drought and liquidating its herd, the report said Australia was in a good position to capitalise in years to come.

“The recent increase in exports from the US is particularly significant. As the world’s largest producer and consumer of red meat, it occupies a crucial role in the global market,” the report said

“When US production rises, it exports the surplus, but when production drops, it becomes a major importer. Moreover, the US has a similar production cycle to Australia, only it is reversed. When Australia is in drought, the US tends to be in a rebuilding period. Conversely, when Australia is in a herd rebuild, such as it is now, the US is often in drought and sees large increases in production.

“This dynamic was experienced in 2021, when the US exported 1.1 million tonnes of beef – a record amount it is set to exceed in 2022. Part of this is due to improved market access in China, but the main driver has been severe droughts across the south and south-west of the country.

“At the same time, Australia is amid a sustained herd rebuild, limiting supply and reducing export volumes. This fall is transient, and as the rebuild matures, growth in production and exports will be seen. Given this dynamic, the next few years are looking positive for Australian producers in the global market. Falls in American production will decrease supply, creating demand that can be met by Australian exports.
Globally, protein demand is still high, meaning that Australian exports are likely to attract solid prices worldwide.

“This dynamic is especially important in Japan and South Korea, two of Australia’s two largest export markets. Both markets have stringent rules around food safety that restrict trade with many major red meat exporters, making Australia and the US the two largest exporters in those markets.”

Domestic consumption

Australia’s per capita beef and sheepmeat consumption continues to be one of the largest in the world. Australian per capita consumption of beef was approximately 19.2kg in 2021, while the global average is 6.4kg.

The retail price for lamb has climbed higher in recent years. However, Australia continues to be one of the largest per capita consumers of sheepmeat in the world.

“In fact, per capita lamb consumption increased in Australia for the first time since 2015. The per capita consumption of sheepmeat was approximately 5.9kg in 2021, while the global average is 1.8kg,” Mr Strong said.

Overall, two thirds of Australian consumers have maintained their level of red meat consumption over the past 10 years, while 29pc of consumers have reduced their intake and 15pc of consumers have increased their red meat consumption.

“Within Australia, consumers continue to demand access to Australian red meat via a range of market avenues and remain committed to enjoying high-quality red meat both at home and through a range of foodservice mediums like restaurants and pubs.

“As global economies continue to recover and supply increases, driven by the herd and flock rebuilds, red meat producers are extremely well placed to capitalise on this sensational demand and operating conditions,” Mr Strong said.

• Read the full report, State of the Industry Report 2022.

Source MLA