OPPORTUNITIES that spring from adversity was the underlying theme of a live export forum held in Townsville yesterday.
Over 100 Queensland graziers and industry representatives attended the Innovation in the Live Cattle Trade: Focus on South East Asia forum, hosted by AgForce.
The day was presided over by master of ceremonies, the Commission for International Agricultural Research chair Don Heatley.
Mr Heatley said the conference had been timed to discuss the potential ramifications regarding Australia's live export trade after several recent announcements including:
• the Indonesian government’s decision to cut the 2015 third quarter cattle quota to 50,000 head
• the recently released North Australia Development White Paper and the Agricultural White Paper;
• the positive developments regarding the China Protocol and the burgeoning Vietnamese live export market
“It’s amazing that, at the moment, if an animal can stand up, breath and walk, it will sell. Especially when taking into consideration the state of the industry after the live-ex ban in 2011,” Mr Heatley told delegates.
“The number of potential markets for Australian livestock at present has never been seen before; and if we can get some good rain in the North, the future will look even brighter.”
“I was involved in the initial discussions regarding a partnership with China 20 years ago, so it’s very pleasing to see that is now coming to fruition.”
AgForce Cattle President Bim Struss said the conference was a perfect opportunity to discuss the progression of the Vietnamese market, the finalisation of the Thai protocol and potential demand from countries like China.
"It's important that Queensland's cattle industry is prepared to move to meet these changing demands and build on the recent success in growing the reputation of our produce,” Mr Struss said while providing a market snapshot and giving those in attendance his insights into the Northern live export trade.
He said AgForce strives to help provide a progressive and profitable industry for the state including its 5000-plus members.
“We need to project a strong industry image going forward in case we have another situation arise like it did in 2011. We need to ensure our consumers have confidence in the industry.
“We also need to ask ourselves as producers ‘are we doing everything we can to build real credibility?’”
North Australia pushes live-ex
North Australia Development Office's Luke Bowen also addressed delegates about the intersection of the North Australia Development White Paper and the Agricultural White Paper.
Mr Bowen said the North Australia Development Office had been organised to get ahead of the White Paper’s release.
He said his office was keen to raise awareness of Northern issues among the predominantly southern-based decision makers ahead of the release of the White Papers.
“We have a sophisticated supply chain now with the creation of the ESCAS system after the 2011 ban, and the North’s live-ex industry holds great economic potential for the rest of the nation, but we need the infrastructure in place domestically and internationally to meet the future rising demands of our trading partners.
“We need to change the southern thinking, and make them realise that issues in the North are just as important as down there.”
Mr Bowen said part of his role had been to get Northern jurisdictions to communicate better with each other to help create a stronger voice from the area.
“I think it’s telling that there has been a lot of concern in the South regarding the Indonesian quota cut, when it would never been considered an issue of great importance in the past; it shows we are being heard.”
He said while competition for live-export markets along with demand is going to increase, Australia’s cattle herd will decline.
“It’s due to this inevitable decline that we need to target high end consumers so as our stock reduces we are getting the greatest value for our exports. We need to position ourselves to demand a higher price from our overseas consumers.”
He said that the national, state and local government bodies need to “get the sh** out of the road” to enable businesses to develop and realise the needs these markets will be looking to satisfy.
“Instead of relying on government action, we need to steer the wheel ourselves to ensure the best possible outcomes for the future of the industry.
“This includes taking control of the supply chain, and ensuring ESCAS remains strong while continuing to build strong relationships with our consumers.”
Alternative Markets abound
DELEGATES at yesterday’s AgForce live export forum in Townsville were told that the China live export trade would increase at a steady rate, once the health protocols were officially ratified.
MLA International Business Manager, South Asia, Andrew Simpson said China already had adequate processing facilities and there would be fewer boundaries to meeting ESCAS requirements.
“China already has state-of-the-art processing facilities and stunning is already practiced, so we should expect that the ESCAS process should be a lot quicker to implement in comparison to Indonesia,” he said.
But Mr Simpson cautioned that China’s growing reliance on meat imports and Australia’s gradually declining beef supply would, in the long term, force Australia to focus on high end consumers.
He also said the emerging middle class consumers in Vietnam and Indonesia also needed to be a focus for Australian exporters.
Regarding the Indonesian quota cut, Mr Simpson said when put into perspective overall the 2015 figures are still up around the previous annual export figures.
“We do need to start focussing more on alternate markets such as Vietnam so we aren’t over reliant on the demands of Indonesia.”
He said a tremendous level of effort has been put into making the Vietnamese market as desirable as Indonesia’s.
He also noted Thailand as a growing alternative destination, as well as the potential of countries such as Malaysia, Brunei and Cambodia.
“With all these markets we need to make sure our relationships stay strong and trust is continually strengthened. We need it apparent that Australia isn’t a threat to their own live-ex industries but a partner.”
Opportunities in Vietnam
General Manager for Wellard in South East Asia, Bernie Brosnan discussed supply and innovation taking place with Vietnam which he described as ‘the best thing since sliced bread’ for the Northern industry.
Mr Brosnan said the live export trade to Vietnam has grown exponentially since 2012.
“However being relatively new market we need to make sure that ESCAS is rolled out correctly,” he said.
He said when ESCAS was installed in Indonesia after the ban in 2011, Australia already had established relationships with importers there which made the roll-out easier.
“Even though there have been teething issues in Vietnam with ESCAS, we need to be patient.”
Sky’s the limit
Managing director of Stock Air: Global Livestock Transport, Simon Jackson discussed the advantages of exporting to South East Asia via air transport as a viable alternative/companion to sea travel.
“We don’t see ourselves as being in competition with sea freight but rather as a partner to meet the fluctuations of export demands,” Mr Jackson said.
He said air freight is a popular option for importers obtaining high value animals such as stud and breeder consignments quickly and safely, and also as way for them to fill quota needs quickly for feeder and slaughter markets.
“Consignments have ranged in size from a single beast up to 3200 head, and that the journey only takes up to 24 hours to reach South East Asia or 36 hours to reach the Middle East and Europe.
“Delivering cattle by air will be the biggest growth area for us going forward,” Mr Jackson said regarding the company which also transports goats, sheep and exotic animals overseas.
Patience is a virtue
South East Asia Livestock Services (SEALS) services manager Kevin Mulvahil said
trade to places such as Indonesia has not only been profitable for both nations but has also improved living conditions in many export nations.
“20 years ago there was no trade to places like Indonesia where poverty was rampant, and infrastructure was limited,” he said.
“We have to patient with some of these export destinations who are still finding their feet. Indonesia for example has only been run as a democracy for 18 years.
“And the situation is similar in Vietnam. It has taken a lot of time to get the infrastructure there up to scratch and employees up to speed with correct practices.
“SEALS have five full-time staff in-country to ensure ESCAS protocols are being followed correctly.
“At present Vietnam accounts for 50pc of our ESCAS spend at a cost of $2.5m in 2015.
“But we feel that the investment is worthwhile as Vietnam accounts for 40pc of our total exports, a figure which will continue to grow.”
The day included a panel discussion featuring Bim Struss, president of Cattle Council Australia (CCA), Howard Smith and the chief executive officer of Australian Live Exporters’ Council (ALEC), Alison Penfold.
A networking function was held after the conference which saw Product Development/Corporate Chef at MLA, Sam Burke serve some very tasty South East Asian beef delicacies to those in attendance.
