Lower beef supply drives export volumes down

Lower beef supply drives export volumes down

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Pandemic's flow-on for beef.

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SALE-O: Alex Scott & Staff agent Jason Fry and auctioneer David Setches sell a pen of steers at Pakenham last Thursday. Photo by Bryce Eishold.

SALE-O: Alex Scott & Staff agent Jason Fry and auctioneer David Setches sell a pen of steers at Pakenham last Thursday. Photo by Bryce Eishold.

Australia's red meat exports have so far survived the global health pandemic relatively well and there have even been some wins.

In the Middle East, where Australia's red meat industry had been advocating for a longer shelf life on its products, COVID-19 has actually served as a catalyst to fastrack reforms

Beef export volumes from August show a continued decline, dropping a further 12 per cent on July figures, but that is supply-driven and has been forecast from the start of the year.

Overall, supply chains have survived the disruptions well but there are a number of areas where COVID-19 affects are still likely to materialise, Meat & Livestock Australia's manager of global trade development based in Singapore, Tim Ryan said at a recent beef industry webinar.

The geopolitical front is likely one area where big future impacts will be felt.

COVID-19 had been a clear example of a lack of multilateral cooperation and it's likely to fuel more protectionist sentiment, Mr Ryan said.

Domestic industries may start to pressure their governments for protection.

"With most parts of the world in recession and government budgets stretched, if industries are struggling and can't get subsidies ... trade policies could be a measure that comes through as a means to protect those industries," he said.

Further, in the wake of empty supermarket food shelves following lockdown panic buying, increased concerns around food security, particularly in Asia, could unfold.

Strategic moves to greater self sufficiency would have a negative impact on trade.

"On a positive note, we are starting from a base where global food trade has survived through the disruption so we can argue the point imports play a key role in that food security story - it's not just about countries trying to produce everything themselves," Mr Ryan said.

It is an overall shortage of beef supply from Australia that has driven the trade outlook lower over the next few years, rather than COVID-19 disruptions, Mr Ryan reported.

However, there have certainly been impacts. When the virus emerged, big volumes of meat sat in reefer containers in Chinese ports and distribution centres and as that country went into lockdown, the whole system seized up, Mr Ryan explained.

"Then as we saw COVID-19 spread around the world, passenger flights were grounded and the bulk of Australia's airfreight was taken out of the system."

While airfreight is not the primary mode for Australia red meat exports, in some markets it is very important, such as lamb into the Middle East or beef into Hong Kong and Singapore.

The third major area of impact for Australia's red meat industry has been in supply chains themselves.

The live export industry, for example, has seen difficulties in manning ships and getting vets onto boats and in Victoria at the moment, the impact on processing workforces and reduced capacity is hard felt.

"At the same time, we've seen impacts on the market access front with China not wanting to take product from plants that have had COVID-19 because of a perceived food safety risks," Mr Ryan said.

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