Food and agriculture red meat

Transcription

1 Sector summary 2014 Food and agriculture red meat The trade and investment sectors contained in the sector summary series have been compiled from Australian and New Zealand Standard Industry Classification (ANZSIC) classes using a value chain approach. This means that industry classes from ANZSIC have been grouped together to provide estimates of the size of the particular trade and investment sectors. Coverage: the farming of cattle and sheep for meat production and associated downstream processing. Key indicators Regional employment Red meat Percentage of Tasmanian total 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Employment International Exports 24% 46% 30% North West North South Key statistics at a glance Indicator Units Period Data Change from five years ago Per cent of Tasmania Per cent of Australia Gross packed and processed value (a) $M $361 NA NA NA Employment (b) No % 1.6% 1.3% International exports (c) $M $139 NA 4.6% 2.0% Incomes (average weekly) (d) $ 2011 $ % 80.0% 83.2% Education (e) No NA 26.6% 36.1% Employment (proportion full/part) (f) Type 2011 Full-time NA 71.0% 77.5% Sources: Australian Bureau of Statistics (ABS) (2012, 2013), Department of Economic Development, Tourism and the Arts (2013), Department of State Growth (2014), AEC Group (a) Tasmanian Food and Beverage Industry Scorecard , Department of Primary Industries, Water and Environment. Includes beef, sheep and other livestock. (b) 2011 ABS Census. AEC Group considers this the most accurate estimate of employment at the detailed four digit ANZSIC level. (c) Estimates of international exports using ABS data. (d) 2011 ABS Census. This includes employment and non-employment related income (for example, rents, dividends, interest, child support and government pensions and allowances). A percentage above 100 per cent of average weekly income suggests workers in this industry earn higher than the average wage. (e) 2011 ABS Census. Education measured by the number of employees who have completed Year 12 (or equivalent studies). Per cent of Tasmania/Australia shows the proportion of workers in this sector who have attained this level of education. (f) 2011 ABS Census data. Per cent of Tasmania/Australia shows the proportion of workers employed in this manner.

2 Constraints and opportunities The red meat industries (beef and sheep meat) are major contributors to the Tasmanian agricultural economy, with around farms carrying a total of about beef cattle, and around farms carrying a total of about 2.4 million sheep in In , the value of the red meat produced from Tasmanian herds was approximately $240 million at the farm gate and $335 million processed 2. The sector accounts for around 25 per cent of the total annual value of agricultural production (excluding non-food products) 3. Beef production dominates the red meat industry, accounting for approximately 64 per cent of total farm-gate value, while lamb and mutton accounts for the remaining 36 per cent 4. During the past 15 years, Tasmania s beef cattle herd has remained relatively stable at around , while sheep numbers have declined dramatically from around 3.8 million in to around 2.4 million in Slaughter statistics show that in , cattle, mutton sheep, and lambs were processed in Tasmania, representing significant increases for each product category 5. In , no Tasmanian beef cattle, but almost sheep were slaughtered interstate 6. Some weaner cattle do leave the state. The red meat processing sector is dominated by two large export-accredited businesses. JBS Australia, which operates abattoirs at Longford and Devonport, and Greenhams based at Smithton, account for approximately 90 per cent of red meat processed in the state. Following the closure of the JBS Australia-owned abattoir on King Island in September 2012, approximately head of cattle per year 7 are shipped from King Island to the two major mainland Tasmanian processors. Cressy-based processor Tasmanian Quality Meats (TQM) focuses on sheep and bobby calf processing and is Tier 1 (limited) export licence accredited. Approximately half of processed Tasmanian beef is exported overseas. Japan is Tasmania s most important beef market, followed by the United States 8. Increased export demand for light lambs, primarily to the Middle East, has reduced supply of heavy lambs available and increased domestic price pressure for both products. Like many of the state s food production industries, the red meat sector is small by Australian standards and insignificant by international standards. Tasmania s point of difference relative to other jurisdictions is linked to clean and green factors, including: A ban on hormone growth promotants and a moratorium on genetically modified organisms (GMOs) Low-cost, high-quality, primarily pasture-based production Relative disease freedom The development of differentiated brands and products based on a quality proposition, in domestic and international markets Strong animal welfare standards 1 ABS, Agricultural Commodities, Australia, , Cat No , DPIPWE, Tasmanian Livestock Industry At A Glance, , (unpublished report), p. 1 3 Department of Primary Industries, Parks, Water and Environment, Tasmanian Food and Beverage Industry Scorecard DPIPWE, Tasmanian Livestock Industry At A Glance, , (unpublished report), p. 1 5 Tasmanian Country, Friday July , page DPIPWE, Tasmanian Livestock Industry At A Glance, , (unpublished report), p. 2 7 TIA, personal communication, Peter Ball, 28 October DPIPWE, Tasmanian Livestock Industry At A Glance, , (unpublished report), p. 1; Department of Economic Development, Tourism and the Arts Export Statistics, (Taken from ABS export data). 2

3 Constraints and opportunities Constraints The processing sector is constrained by its relatively small size and the age of waste management infrastructure at its processing plants (although recent expansion at Greenhams and proposed upgrades to waste infrastructure servicing Swifts Longford plant will help address this issue). The industry s lack of scale (particularly in the processing sector) is exacerbated by seasonality of supply and the fact that significant numbers of livestock (sheep) are transported to the mainland for processing. Infrastructure costs of, and any reduction in, port access or sea freight services to the mainland. Limited competition within the local processing industry and retail supermarkets impacts negatively on farmers bargaining positions. Assuring brand and product integrity, and defining what constitutes Tasmanian meat. Currently any meat slaughtered in Tasmania can be branded Tasmanian, even if it was bred and grown elsewhere. Consumers are not always able to identify Tasmanian-grown product 9. Managing generational change and lack of succession planning for some enterprises. Access to a reliable and stable workforce is an issue for abattoirs and producers. Potentially higher returns from competing uses of land, such as dairy, can make sustainable grazing a less profitable option (although dairy enterprises require greater capital investment and more intensive management). Negative consumer perceptions and stricter regulations around animal husbandry (for example, sheep mulesing), vertebrate pest management (for example, grazing native animals) and the environmental impact of red meat production (water use and greenhouse gas emissions) may potentially impact on enterprise profitability. Industry advises that grazing native animals are significantly reducing available feed on many farms. Rising input costs and the relatively-high Australian dollar impact on competitiveness, particularly in export markets. Regulation and red tape are perceived as barriers to development and a constraint to business. This may include regulation, tax arrangements and administrative processes as well as other issues such as variable planning schemes. Opportunities Tasmania s relative pest and disease-free status, sustainable pasture-based production systems, GMO moratorium, hormone growth promotants ban and a high-quality, differentiated product has the potential to gain greater recognition in higher-value markets and a price premium with strategic marketing - particularly as paddock-to-plate product tracing and systems develop. These attributes are central to the branding of Tasmanian beef in Japan and are gaining increasing recognition domestically, for example in 2011 Coles adopted a national policy to only stock hormone growth promotants-free beef. 9 In 2012 in separate proceedings the ACCC successfully prosecuted two Victorian meat retailers for falsely claiming or implying that meat sourced from Victoria was from King Island. < > 3

4 Continued investment in branding (whether generic Tasmanian branding or individual companies and products), quality assurance systems (such as Meat Standards Australia grading) and traceability have the potential to support price premiums and provide a buffer against commodity market volatility. Developing improved farming practices and raising productivity. Potential improvements include betteradapted pasture species, more efficient use of pasture, aligning farm systems to processor and market requirements and better integration of meat production and irrigated cropping. Growing demand from established markets in the Middle East (lamb) and newer markets such as China (beef and lamb) with Meat and Livestock Australia expecting beef exports to hit a record 1 million tonnes in 2012/ Increasing demand for sustainably-produced food (both globally and domestically) and shifting consumer preferences for regionally-identifiable food. In response to increasing demand for grass-fed beef, development of a national grass fed standard and a module to verify best practice environmental stewardship. Investment in irrigation schemes may provide increased red meat opportunities in sustainable crop rotations and dedicated red meat production systems. Strategy summary Red meat production is highly fragmented with many smaller farms and enterprises rearing animals as part of cropping rotations as well as dedicated cattle and sheep enterprises operating on a larger scale. The red meat industry is developing an overarching industry development plan. Discussion Pest and disease freedom is one of the keystones of the Tasmanian (and Australian) red meat brand, underpinning access to international markets. Maintaining biosecurity (through risk-based assessment and effective response plans and capability) is fundamental to the viability of the industry. Dedicated government resources (State and Commonwealth Government) are required to maintain the situation. Greater emphasis on branding can leverage Tasmania s environmental advantages and HGP/GMO bans, improving market access and potentially improving returns for producers and processors. Industry players advise that Tasmanian-branded meat is gaining increased recognition in the domestic markets (provided retailers and labels make consumers aware of its Tasmanian origin) but has little currency overseas. The red meat industry is exposed to global markets and the dominant domestic retailers, and producers are expected to more-closely meet the needs of supply chain customers and the final consumer. By better understanding how effective value chains work, who the end customer is and what their requirements are, producers can improve their competitiveness and sustainability. In paddocks close to bushland, native animals consume significant quantities of pasture, and while this is an ongoing problem for producers, an integrated package of measures can be effective, if properly implemented. Government has undertaken considerable research and awareness raising which could be implemented and demonstrated through existing whole farm, enterprise or pasture management programs. Changes to export regulations by the Commonwealth government may create greater export opportunities for native animal meat and furs. 10 Meat and Livestock Australia, 15 August 2013, < > 4

5 Tasmanian Government strategy The Tasmanian Government, through its Cultivating Prosperity: A 2050 Vision for Agriculture policy, is putting the State's primary industries on the path to achieving a ten-fold increase in the value of the sector by The Tasmanian Government s strategies include: Maintain a risk-based approach to biosecurity and have effective plans in place for dealing with worst-case scenarios (such as Foot and Mouth Disease, Ovine Johne s Disease or Bovine Spongiform Encephalopathy outbreak), either in Tasmania or on mainland Australia. The Tasmanian Government announced the formation of Biosecurity Tasmania in May Biosecurity Tasmania is a single Government unit with expanded biosecurity responsibilities covering primary industries and the environment. Biosecurity Tasmania is involved across the biosecurity spectrum from pre-border to post-border, policy and legislation, risk assessment, research, diagnostics and response. A Target 120 program was established to assist King Island cattle producers to transition from supplying a local abattoir to supplying processors remote from the Island through two initiatives. These are a transport assistance payment of $30 per beast transported from the Island for processing, and support to undertake a business analysis and develop strategies that will assist them achieve long-term sustainable production and financial viability. Continue to develop programs and initiatives aimed at improving productivity and profitability. Relevant programs, such as Making More from Sheep, Sheep Connect and More Beef from Pastures are run by the Tasmanian Institute of Agriculture (TIA) and other service providers. Support brand and market development through high-level branding, marketing strategy and export marketing programs. The development of a national grass fed standard and best practice environmental standards will benefit Tasmanian producers. Export marketing programs and initiatives run by the department will support the efforts of individual processors. Development of second-tranche Irrigation Tasmania irrigation schemes in Tasmania will help to increase production of red meat across the state. Maintain the Tasmanian Freight Equalisation Scheme. Under the Scheme, goods (including livestock) produced or manufactured in Tasmania and shipped for permanent use or sale on mainland Australia are eligible for assistance with freight costs. The scheme supports producers seeking to access mainland animal markets, enhances competition for Tasmanian animals and improves the bargaining position of farmers with limited market channels within Tasmania. 5