Red meat industry in Australia

The Australian red meat and livestock industry encompasses the production and processing of beef and dairy cattle, sheep, goats and buffalo, for export and domestic consumption, with beef cattle and sheep the dominant industries. This report covers the beef and sheep meat industries in Australia.

Australia is among the world’s largest producers of red meat, with 2.15 million tonnes (carcass weight) of beef and veal, 435 000 tonnes of lamb and 258 000 tonnes of mutton produced in 2007-08. In 2007-08, the gross value of beef and veal produced was more than $7.4 billion, and for sheep meat it was around $2.2 billion.

Australia is the world’s second largest exporter of beef and sheep meat. In 2007-08, around 64 per cent of beef produced in Australia was exported, 45 per cent of lamb and 82 per cent of mutton. The combined value of beef, lamb and mutton exports in 2007-08 was slightly more than $5.4 billion.

Australia is also a large exporter of live animals, particularly out of northern and western Australia. In 2007-08, more than 700 000 cattle, valued at around $450 million, were exported mainly to markets in South-East Asia. More than 4 million sheep were also exported in 2007-08, mostly to the Middle East, with a value of around $280 million.

The distribution of cattle and sheep within Australia provides a strong indication of the regional importance of the industries. Around 47 per cent of the national beef cattle herd of 24.8 million head (as at June 2008) is located in Queensland and around 22 per cent of the herd is in New South Wales. The majority of Australia’s 76.9 million sheep (as at June 2008) are located in New South Wales (34 per cent), Western Australia (23 per cent) and Victoria (22 per cent).

Trends over time

Australian meat production has been increasing over time (figure a). From 1984-85 to 2007-08, beef production increased by around 65 per cent and lamb production by 44 per cent. Over the same period the production of poultry and pig meat also increased.

In contrast to production, domestic consumption (per person) of red meat has fallen over the past 20 years (figure b). Beef consumption has been quite variable, but has shown an overall downward trend, falling from 42 kilograms a person in 1988-89 to 37 kilograms a person in 2007-08. Consumption of lamb has also fallen over the same period from 15 kilograms to 10 kilograms a person.

However, the quantity of total meat consumed per person has not changed significantly over time. While the consumption of beef and lamb has declined, the consumption of poultry and pig meat has continued to increase, reflecting changes in relative prices and also changing tastes and preferences.

The increase in the production of red meat in Australia and decline in domestic consumption has led to a greater reliance on export markets. In the late 1980s, less than 60 per cent of beef was exported; this had increased to 64 per cent by 2007-08. For lamb, less than 15 per cent was exported in 1988-89, but by 2007-08 this had increased to 45 per cent. This greater dependence on export markets means the Australian red meat industry is increasingly influenced by global factors.

Australia compared with other countries

In 2006, Australia was the second largest exporter of beef and veal, after Brazil, accounting for around 15 per cent of world beef exports. Prior to 2005, Australia was the largest exporter of beef (figure c).

1 Australian meat exports - by volume
		1999-2000	2000-1	2001-2	2002-3	2003-4	2004-5	2005-6	2006-7	2007-8
Beef and veal a	kt	852	959	902	902	860	948	892	974	930
Lamb a	kt	99	115	109	98	112	123	143	150	163
Mutton a	kt	171	180	159	152	120	137	145	162	158
Live cattle	‘000	846	846	797	977	581	574	549	638	714
Live sheep	‘000	4 859	5 936	6 443	5 843	3 843	3 233	4 248	4 138	4 069
a Shipped weight. Sources: DAFF 2008 and ABS 2008a.

World beef trade has been constrained over the past few years by disease-related trade restrictions. The discovery of bovine spongiform encephalopathy (BSE) in the United States in December 2003 led to bans, and more recently restrictions, on imports of US beef by Japan and the Republic of Korea. As a result, beef exports from the United States fell in 2004 and have since remained low.

As a result of restrictions on US beef exports to Japan and the Republic of Korea, the demand for Australian beef increased in those markets. Reflecting this, as well as increased production, total Australian beef exports have increased. However, beef exports from Brazil increased by more and by 2006 Brazil was the world’s largest beef exporter.

Australia is also a large exporter of sheep meat, second only to New Zealand in world trade (figure d). Although New Zealand has remained dominant, the proportion of world exports coming from Australia increased from 25 per cent to 31 per cent over the 10 years to 2006.

Profile of the red meat industry

The supply chain for red meat (figure e) extends from livestock production at the farm to retail marketing of the various cuts of meat and co-products.

Size and location

Livestock production is located in most regional areas of Australia, with abattoirs, wholesalers and retailers also located in many regions.

As at June 2008, it is estimated that there were 41 640 specialised beef cattle farming establishments and 11 148 specialised sheep farming establishments (this number also includes wool producers). There were an additional 7226 establishments in sheep and beef cattle farming and around 13 000 establishments in either grain-sheep or grain-beef cattle farming (table 2).

2 Establishments with agricultural activity – by state a
	NSW	Vic	Qld	SA	WA	Aust
Sheep farming (specialised)	4 068	3 549	362	1 362	1 316	11 148
Beef cattle farming (specialised)	14 066	8 719	13 506	1 429	2 468	41 640
Sheep-beef cattle farming	3 635	1 651	487	816	351	7 226
Grain-sheep or grain-beef cattle farming	5 154	2 511	1 332	1 864	2 023	13 059
a Year ended 30 June 2008 and for establishments with estimated value of agricultural operations (EVAO) greater than $5000. Source: ABS 2008d.

Livestock producers are located across many regional areas of Australia (maps 1 and 2). Specialised beef cattle producers are located mainly in New South Wales (34 per cent), Queensland (32 per cent) and Victoria (21 per cent). The majority of feedlots are located in Queensland and New South Wales.

It should be noted that these numbers include all establishments with an estimated value of agricultural operations (EVAO) of more than $5000 (ABS 2008d). For the larger establishments – those with an EVAO of greater than $22 500 – 26 678 were specialised beef farms and 8117 were specialised sheep farms (table 3).

3 Establishments with agricultural activity – by EVAO a
EVAO ($’000)	sheep farming (specialised)	beef cattle farming (specialised)	sheep-beef cattle farming	grain-sheep or grain-beef cattle farming
<22.5	3 031	14 962	1 080	1 151
22.5 < 40	1 700	7 178	636	1 178
40 < 50	468	2 509	534	609
50 < 100	2 148	6 787	1 440	2 360
100< 150	1 172	2 651	1 121	1 962
150< 200	859	1 985	647	1 261
200 < 350	976	2 243	917	2 418
350 < 500	492	1 077	412	853
500 < 1000	231	1 300	348	995
1000 < 2000	63	613	82	225
2000 and above	7	336	10	46
a Year ended 30 June 2008 and for establishments with estimated value of agricultural operations (EVAO) greater than $5000. Source: ABS 2008d.

Meat processors are also located across much of Australia except the Northern Territory. The top 25 processors in Australia owned 51 abattoirs and accounted for 77 per cent of Australia’s red meat production in 2006. Of the 49 abattoirs that had their locations listed, 14 were in Queensland, 12 in New South Wales, 11 in Victoria and the remainder in South Australia, Tasmania and Western Australia. However, these abattoirs are of varying sizes and capacities.

In 2006-07, an average of 2.9 people out of every 1000 worked in meat processing. This varies by state (table 4) and region and is dependent on the size and location of meat processing plants, and the number of people employed at each. Of all the states, Queensland has the most people (in absolute terms and as a proportion of the labour force) employed in meat processing.

More than 31 000 people across Australia were employed in the meat processing sector in 2006-07, with wages and salaries worth more than $1.4 billion (ABS 2008c). Operations within the meat processing sector are mainly engaged in the following:

• slaughtering animals
• boning, freezing, preserving or packing meat
• canning meat
• manufacturing meats from abattoir by-products
• rendering lard or tallow.

4 Employment in meat processing - by state in 2006-07
state	meat processing	all industry	%
New South Wales	7 307	3 356 494	0.22
Victoria	4 649	2 614 113	0.18
Queensland	11 752	2 165 142	0.54
South Australia	2 780	765 279	0.36
Western Australia	2 596	1 112 233	0.23
Tasmania	252	226 040	0.11
Australia a	31 026	10 542 819	0.29
a Includes Northern Territory and the Australian Capital Territory. Sources: ABS 2008c; ABS 2009a.