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The Australian red meat and livestock industry encompasses the production and processing of beef cattle, sheep, goats and buffalo, for export and domestic consumption. This report covers the beef and sheep meat industries in Australia.
Australia is among the world’s largest producers of red meat and is the second largest exporter of beef and sheep meat. Australia is also a large exporter of live animals.
Australian meat production has been increasing over time, while domestic consumption (per person) of red meat has fallen. This has led to a greater reliance on export markets. As a result, the Australian red meat industry is becoming increasingly focused on servicing export market requirements.
Red meat production and live exports of sheep and cattle accounted for nearly 22 per cent of the total gross value of Australian agricultural production in 2007-08. Though it is variable, the trend over time suggests an increasing contribution of sheep and cattle toward the total value of agricultural production, particularly over the past 10 years.
The red meat industry (including live exports) also accounts for a significant proportion of the value of agricultural exports, contributing 22 per cent to the value of Australian farm exports in 2007-08.
The red meat processing industry is an important market for products from other sectors, including live animals, transport services, the container industry and the detergent industry. In addition to meat products, the red meat industry also produces by-products including hides, skins, oils and fats, that are used as inputs into other industries. As a result, growth of the red meat industry contributes to growth in other economic activities.
The economic importance of the red meat industry is more significant at the regional level where farming, particularly livestock production, comprises a large proportion of total economic activity. To illustrate this, production activities within the red meat industry were identified and a region for each was selected. The economic importance of the red meat industry for each of these regions is discussed in more detail in the report.
A lamb producing region in New South Wales, a live sheep exporting region in Western Australia, a beef producing region in Queensland and a red meat processing region in South Australia were identified. In the beef producing region in Queensland, beef cattle and sheep farming, and meat processing contributed around 8 per cent to total regional employment in 2005-06. In the red meat processing region, the red meat sector contributed 13 per cent to total regional employment. Nationally, the red meat sector accounts for up to 1.6 per cent of total employment.
Drought can influence feed prices, slaughter rates, the demand for sheep and cattle for restocking, and saleyard prices. Poor seasonal conditions generally lead to a reduction in pasture availability, an increase in feed costs and higher slaughterings, and a decline in herd and flock numbers.
Domestic demand for red meat is another factor that can affect the industry. In Australia, there has been an increase in the demand for poultry and pig meat as they are substituted for red meat, partly reflecting changes in relative prices.
Foreign meat demand continues to be important for the industry. Although Australia’s major markets, particularly for beef, are mainly in developed countries, developing country markets are becoming more important as incomes and populations in these markets increase.
Exchange rate fluctuations influence the red meat sector because a large proportion of Australia’s red meat is exported. A stronger Australian dollar translates into relatively more expensive Australian exports in other countries, reducing the quantity of Australian meat demanded in those markets.
In the global market there are barriers to trade in beef and sheep meat that affect Australia’s red meat industry. Such barriers, for example, include country specific EU import quotas on sheep meat and beef, and the Japanese tariff on imported beef.