Chapter 2.2
Meat industry
2.46 Meat processing is a form of value-adding as it involves the
transformation of livestock into a more highly valued product.
2.47 The meat industry makes a significant contribution to the national
economy. The value of beef and sheepmeat production at the farm level
in 1993-94 was estimated to be $4.7 billion which represented about 20
per cent of the total value of agricultural production in Australia for
that period. In the same year the combined export and domestic wholesale
value of red meat production was estimated to be $6.6 billion. According
to the Australian Meat and Livestock Corporation (AMLC) a significant
proportion of the difference between these two figures represented value
added to the meat at the processing stage. The Corporation noted that
“further value is added at the domestic retail and food service ends
of the chain and in the ancillary sectors such as by-products and hides/skins.”
[53]
2.48 The Australian Meat and Livestock Corporation in arguing that
significant growth in value-adding has taken place in the meat industry pointed to the
fact that the value of meat exports had grown from $1.5 billion 1984-85 to $3.7 billion in
1993-94. According to the Corporation:
This growth reflects the ability of the industry to take advantage
of opportunities to sell higher valued products in markets such as Japan,
and to closely align production to market requirements on both the domestic
and export markets. Reflecting these developments the unit value of
beef and veal production has grown from $1 576 per tonne in 1983-84
to $2 095 per tonne in 1992-93. [54]
2.49 Dr Bruce Standen, Managing Director of the AMLC, told the Committee
that “at a time when the prices for our agricultural commodities
have fallen in real terms, the unit prices for red meat have approximately
kept pace with inflation, reflecting the growth in value adding activities.”
[55]
2.50 The Committee has selected the following meat industries to
comment on below:
- beef;
- lamb and sheep;
- pork; and
- pet food.
Beef
2.51 Australian cattle numbers are projected to increase by around 5
per cent to 24 million herd by March 2001. This will be the highest number
of cattle in Australia since 1979-80. [56]
Despite predicted increases in Australia's cattle numbers Australian beef
production was expected to fall during 1995-96 resulting in total beef
exports declining by 5 per cent to some 743 000 tonnes. During the three
years to February 1996 Australia's beef and veal exports to the United
States deceased from a peak of 377 000 tonnes in 1991-92 to 251 000 tonnes
in 1994-95. Australia's beef and veal exports to the United States as
a per centage of its total exports decreased from 37 per cent in 1991-92
to a forecast 26 per cent in 1995-96. However, this decline will be partly
offset by an expected increase in beef exports to North Asian markets.
Australian exports to Japan and Korea are forecast to grow by 2 per cent
and 17 per cent respectively. Increased returns in these two markets are
expected to mean that the total value of Australian beef exports will
increase during 1995-96. [57]
2.52 The predicted decline in beef production while the size of the national
cattle herd is increasing is in part explained by the continued diversion
of cattle to the live cattle export trade. In 1995 509 636 cattle were
exported from Australia which was an increase of 67 per cent compared
to the previous year. Live cattle trade is projected to increase by 11
pre cent to 600 000 head in 1996-97. The percentage of live cattle exported
to cattle slaughtered was seven per cent in 1995 compared to 1.4 per cent
in 1990. [58]
Lamb and sheep
2.53 Australia's sheep flock is projected to increase steadily from a
low of 120 million in 1994-95 to 146 million in 2001-01. As a result of
this increase in numbers sheep slaughterings are projected to rise slowly
from 11.5 million in 1996-97 to 12.5 million in 2000-01. During the same
period lamb slaughterings are predicted to increase from 13.1 million
to 14.7 million. [59]
2.54 Sharp increases in the prices of mutton and lamb have occurred since
mid-1995 because of a fall in the market supply of sheep and lambs following
the drought. The retail price of sheep meat, relative to other meats,
is forecast to increase significantly and it is expected that consumers
will reduce consumption of sheep meats in preference for other meats.
[60]
2.55 Exports of sheep and lamb meat during 1993-94 totalled 164 814 tonnes,
a nine per cent increase compared to the previous year with lamb exports
taking up 56 074 tonnes of this shipped weight. [61]
However, with the forecasted decline in slaughterings, exports during
1995-96 are projected to fall by 29 per cent for mutton and 6 per cent
for lamb. [62]
2.56 Live sheep exports from Australia were strong during 1994-95 with
6 million sheep exported. However, it was expected that live sheep exports
will decline by 10 per cent in 1995-96 to 5.4 million as a result of higher
domestic prices relative to export prices. [63]
Pork
2.57 In 1972 there were 39 252 herds of pigs in Australia. Since 1972
there has been a rapid reduction in the number of pig herds, from 23 830
in 1976 to 5 673 in 1994 with reductions being greatest in the number
of herds containing 1 to 49 pigs. However, despite the reduction of herd
numbers, pig numbers and pig meat production has continued to increase
at a consistent rate. A survey of breeding herds conducted since 1972
suggests that the number of small pig herds has continued to fall but
intermediate and larger herds are stabilising. [64]
2.58 The Committee was advised that approximately 60 per cent of pig
meat production in Australia, 196 780 tonnes, is subjected to value-adding
marketed in the form of ham, bacon and smallgoods. [65]
Pet food
2.59 Manufactured pet food is Australia's leading processed food export
of any type. In 1994 the sale of manufactured pet food was expected to
exceed $800 million. This figure can be compared to $281 million recorded
retail sales for fresh pet meat that has no value-added component. The
Pet Food Manufactures Association of Australia (PFMAA) estimated that
if the industry did not exist prices for ingredients used in pet food
manufacturing, such as fresh meat and scraps, would fall in value by as
much as 80 per cent. [66]
Footnotes
[53] Evidence, AMLC, pp. 307,
324-325.
[54] Evidence, AMLC, pp. 307-308,
325.
[55] Evidence, AMLC, p. 325.
[56] D. Barrett and others, Outlook for
Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered
at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p.
206. Mr John Kerin of the Australian Meat and Livestock Corporation asserted in February
1996 that the Australian cattle herd stood at 25.5 million in March 1995 and that the
national cattle herd should reach around 27.6 million by 1998, John Kerin, The
Australian Beef and Sheep Meat Industries - Future Challenges, Outlook 96, Vol. 2,
Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra
6-8 February 1996, organised by ABARE, p. 217.
[57] D. Barrett and others, Outlook for
Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered
at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE,
p.207; ABARE, Australian Commodities Forecasts and Issues, Vol. 2, No. 3, September
Quarter, 1995, p. 297; ABARE, Australian Commodities Forecasts and Issues, Vol. 3,
No. 1, March Quarter, 1996, p. 25; see also John Kerin, The Australian Beef and Sheep
Meat Industries - Future Challenges, Outlook 96, Vol. 2, Agriculture: collection of
papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996,
organised by ABARE, pp. 217-218.
[58] D. Barrett and others, Outlook for
Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered
at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE,
p.210; see also ABARE, Australian Commodities Forecasts and Issues, Vol. 2, No. 3,
September Quarter, 1995, pp. 296-297; ABARE, Australian Commodities Forecasts and
Issues, Vol. 3, No. 1, March Quarter, 1996, p. 25 and John Kerin, The Australian
Beef and Sheep Meat Industries - Future Challenges, Outlook 96, Vol. 2, Agriculture:
collection of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February
1996, organised by ABARE, p. 220.
[59] D. Barrett and others, Outlook for
Beef and Sheep Meat, Outlook 96, Vol. 2, Agriculture: collection of papers delivered
at the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p.
213; see also Australian Meat and Livestock Corporation Annual Report 1993-1994, p. 7 and
ABARE, Australian Commodities Forecasts and Issues, Vol. 2, No. 3, September
Quarter, 1995, p. 298 and John Kerin, The Australian Beef and Sheep Meat Industries -
Future Challenges, Outlook 96, Vol. 2, Agriculture: collection of papers delivered at
the Outlook 96 Conference held in Canberra 6-8 February 1996, organised by ABARE, p. 220.
[60] ABARE, Australian Commodities
Forecasts and Issues, Vol. 2, No. 3, September Quarter, 1995, p. 298.
[61] Australian Meat and Livestock
Corporation Annual Report 1993-1994, p. 7.
[62] ABARE, Australian Commodities
Forecasts and Issues, Vol. 2, No. 3, September Quarter, 1995, p. 298 see also ABARE, Australian
Commodities Forecasts and Issues, Vol. 3, No. 1, March Quarter, 1996, p. 26.
[63] ABARE, Australian Commodities
Forecasts and Issues, Vol. 2, No. 3, September Quarter, 1995, p. 298; see also D.
Barrett and others, Outlook for Beef and Sheep Meat, Outlook 96, Vol. 2,
Agriculture: collection of papers delivered at the Outlook 96 Conference held in Canberra
6-8 February 1996, organised by ABARE, p. 213 and John Kerin, The Australian Beef and
Sheep Meat Industries - Future Challenges, Outlook 96, Vol. 2, Agriculture: collection
of papers delivered at the Outlook 96 Conference held in Canberra 6-8 February 1996,
organised by ABARE, p. 221.
[64] Bob Whan, Prospects and Challenges
for the Pig Industry in the Year 2000, Outlook 95, Vol. 2, Agriculture: collection of
papers delivered at the Outlook 95 Conference held in Canberra 7-9 February 1995,
organised by ABARE, pp. 119-120; for information on the distribution of pig herds by size
see ibid, p. 120..
[65] Submission, Queensland Pork
Producers' State Council, p. 2; Submission, APC, p. 1.
[66] Submission, PFMAA, pp. 1-2.