LiveCorp calls for collaboration to protect key markets in face of high cattle prices

Teamwork builds value and resilience

Opinion
Industry players need to work together to ensure key cattle export markets, such as Indonesia, are maintained in the face of high prices, according to LiveCorp chief executive officer Sam Brown.

Industry players need to work together to ensure key cattle export markets, such as Indonesia, are maintained in the face of high prices, according to LiveCorp chief executive officer Sam Brown.

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A collaborative approach is needed to ensure key cattle export markets are maintained.

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COMMENT

There has been a lot of discussion lately about the impact of high cattle prices on Australia's live export markets - particularly Indonesia - and especially coming off the back of a tough year due to COVID-19 restrictions.

The situation definitely presents challenges.

But the livestock export industry has dealt with high prices, tight supplies and competition before.

Exporters operate in a globally competitive market and have proven their adaptability, determination and resilience.

The trade fundamentals remain strong, with growing global demand for protein; Australia's reputation for quality, disease-free livestock; and the proximity of the northern cattle industry to important trading partners.

Northern Australia is ideal for breeding cattle suited to South East Asia, but does not have the capacity to finish cattle for domestic processing.

Indonesian feedlots have access to excellent by-products from agricultural and processing industries, and can achieve remarkable growth rates from our cattle to produce high quality, lean, fresh meat that is preferred by Indonesians.

But Indonesia has a low cost, high volume model.

Many participants in the supply chain are losing money to maintain the market, including Australian exporters.

Both sides do this because they have significant investments in staffing and supply arrangements to maintain.

This brings about the question: have we broken the model?

The short answer is that we have to, and our obligation is to support and nurture the adjustment and see this through.

Beyond the day-to-day operations, the live cattle trade between Australia and Indonesia is economically and politically important - for the generation of employment, use of resources, and production of quality protein to help feed the nation.

High cattle prices are the result of market drivers that Australians understand, including droughts, floods, fires and strong competition for stock from re-stockers, feedlots, processors and live exporters.

But these free-market fundamentals are difficult concepts for our trading partners to wrap their minds around.

For a relationship-driven industry, possibly the most challenging hurdle at the moment is not being able to simply get on a plane and visit key customers.

The typical face-to-face discussions, to build and strengthen connections, are not an option.

But the industry has invested in developing long-term partnerships, including in Indonesia.

For instance, the Livestock Export Program (LEP) has in-market staff, who liaise regularly with the Indonesian Feedlot Association, Indonesian government officials and Australian Embassy staff to maintain a two-way flow of information about local policies, trade benefits and supply and demand issues.

Most recently, they have been coordinating meetings to discuss the factors leading to the current high cattle prices, Indonesian plans to import Mexican cattle and the pressures in Indonesia to keep affordable beef available for consumers - who are struggling with COVID-19, rising unemployment and increasing commodity prices.

As a team, we have spent years working to improve nutrition, growth and yield from Australian cattle, and to identify opportunities for abattoirs to value-add.

This not only helps economic development, but makes the Indonesians more resilient to high cattle prices.

We don't expect our customers to stop looking elsewhere for cattle.

But just as we've worked hard with our importers to maintain our market share in Indonesia - despite significant competition from frozen Indian buffalo meat - I believe the industry has the value proposition to get through this stage in the cycle, and help everyone in the supply chain come out at the other side stronger and together.

The story LiveCorp calls for collaboration to protect key markets in face of high cattle prices first appeared on Stock & Land.

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