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MLA: red meat industry's state of play

20 October 2021
Meat & Livestock Australia

The Australian red meat industry demonstrated its strength and resilience in 2020.

Key points:

  • In 2019–20, the Australian red meat and livestock sector employed 445,000 people.
  • Widespread drought breaking rain across southern and eastern Australia supported rebuilds in the national goat, sheep and cattle herds and flocks.
  • The industry has continued to remain resilient and grow against several challenges.

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Early in the year, widespread rains occurred across southern and eastern Australia, breaking the 2017–19 drought – Australia’s worst on record. Simultaneously, the COVID-19 virus spread across the world, causing economic recessions in most countries, supply chain disruptions and social restrictions.

The improved seasonal conditions underpinned high livestock prices and signaled the start of a national herd and flock rebuild. In March 2020 lamb, sheep and cattle prices hit new records as producers sought to restock their properties after years of drought-induced destocking. This rise in demand occurred at a time when producers were holding onto more breeding stock to rebuild their inventories, which limited supply and forced prices higher, reducing numbers being processed. This translated into lower beef, mutton and lamb production volumes in 2020.

As positive seasonal conditions have persisted into 2021, the flock and herd rebuild is continuing while production and slaughter levels are not expected to return to pre-pandemic levels until 2022. The high prices and availability of pasture is translating into heavier animals – allowing more beef and lamb to be produced from less animals.

The number of businesses involved in the red meat sector fell in 2020 due to the impact of the drought. During this time, the size of farms increased as the industry experienced a period of rationalisation and aggregation.

The impact of COVID-19 caused some seismic changes in consumption patterns, both in Australia and for some of our major trading partners. Social distancing measures and restrictions on hospitality venues’ capacities around the world saw foodservice consumption drop significantly. However, retail sales of meat rose as consumers embraced cooking from home, offsetting the drop in foodservice demand. COVID-19 also changed the way consumers buy their food products, with ready-to-eat meals, delivery services and online ordering all rising.

On an international stage, several key trading partners and competitors have had their economies ravaged by the ramifications of COVID-19. The Middle East was impacted by reduced air travel and falling oil prices, South America experienced skyrocketing inflation and India dealt with the Delta variant of the virus, which affected their buffalo industry.

As 2021 progresses, the Australian red meat industry is well placed. Producers are receiving high prices due to the restocker demand, the herd and flock are rebuilding and there is a global protein deficit due to African Swine Fever (ASF). The signing of the Australia-United Kingdom Free Trade Agreement also has the opportunity to unlock access to a huge high value export market. All signs are encouraging for Australian cattle, goat and sheep producers.

TheCattleSite News Desk



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