Globalisation impacts the Australian meat industry

By Trevor Rees
Speaking at the 2008 Australian Bureau of Agricultural and
Resource Economics (ABARE) Outlook, Glen Feist of Meat and Livestock
Australia said it was imperative that the safe and healthy status of
Australian beef be maintained, particularly in the Japanese market.
Overall, 60-70% of Australian beef and lamb is exported. At the same
conference, ABARE’s commodity analysis manager, John Hogan,
Australian beef exports to Japan and the Republic of Korea to receive
increased competition from the US. When speaking at the National Beef
Industry Forum, Iain Mars, CEO of major Australian meat producer Swift
Australia, warned of US competition to Australian key meat markets. JBS
Fribol, the Brazilian group, acquired US–based Swift in 2007. Mars
warned the local red meat industry that it faced serious competition
from the US due to its re-entry into key markets and Australia needed
to turn to other markets such as the Middle East, Lebanon, Dubai and
Russia. Australia sold almost all of its produce to four main markets –
Japan, Korea, the US, and the domestic market.
New Asian market
In its market analysis, AusTrade, the Australian Government’s
national trade agency, said the Philippines were open to Australian
meat sales. AusTrade predicted that meat volumes would grow in the
Philippines because of increasing population growth of 2.3% per year in
that country and that would take the population from its current 80
million to over 152 million people within the next two decades. An
AusTrade spokesman said the growth of the Filipino food service sector
and, in particular, fast food chains should fuel continued demand for
beef meat patties and prime cuts. He added that there were
opportunities in the Philippines for Australian suppliers to capture a
greater share of the increasing market for meat related products.

In terms of Australia’s domestic market, the giant Brazilian-based
meat packer group JBS Fribol bought the Australian Tasman Group –
operator of three abattoirs in the state of Victoria and three
facilities on the island state of Tasmania. As Australia’s largest
multi-species abattoir in 2007, the company slaughtered about two
million sheep and about 600,000 beef as well as pigs. The group’s
turnover in 2007 was AUS$500 million (€300 mln; US$467 mln); this made
it a very significant and profitable group in the Australian meat
Expansion into the EU
Elsewhere, meat exporter Teys Brothers invested more than AUS$17
million (€10.1 mln; US$16 mln) at its South Australian South East
facility to increase the kill rate by 200 head a day. This expansion
will create more opportunities for cattle producers in Western Victoria
and South-East Australia, and generate a greater throughput at Teys
Brothers plant at Naracoote in South Australia to increase its
potential to process exports for the EU market. Teys Brothers’
Naracoorte CEO, Brad Teys, said in the refit there would be upgraded
chilling, freezing and storage capacity to cope with an expected
expansion into the EU market. The company’s Naracoorte plant was
scheduled for completion in late 2009. Teys said that the upgrade would
expand daily production to 750 head, directly generating an additional
180 permanent jobs. The expanded plant would earn in excess of AUS$200
million (€120 mln; US$187 mln) of annual sales, of which an estimated
80% would be in exports. The group has abattoirs in the state of
Queensland and in the Northern Territory.
Positive for sheep
Australia’s other major meat performer, the sheep meat industry,
last year initiated a strategic plan to carry itself forward to the
year 2015-2020. The country’s Sheep Meat Council’s aim was to get more
access to the EU markets. Despite having suffered another year plagued
by drought in 2007, Meat and Livestock Australia reports that the
outlook for the Australian lamb industry continues to be bright. The
prospect for good seasonal conditions in 2008, combined with tighter
lamb supplies and strong demand, signals the possibility of higher
prices and incomes to lamb producers.
In recognition of his contribution to the Australian sheep meat
industry, Roger Fletcher, founder of the country’s biggest sheep meat
exporter, Fletcher International, last year received an honorary
doctorate for his enterprise in making his company a leading rural
exporter. Fletcher began his working life as a drover in rural New
South Wales and has gone on to create Australia’s leading international
meat export companies – Fletcher International Exports Pty Ltd., at
Dubbo in New South Wales, and Fletcher International WA, at Albany in
Western Australia.
The Fletcher companies source their livestock from every
Australian state, and export their range of products to more than 70
countries in Europe, America, the Middle East and Asia. Another
significant Australian lamb processor and exporter, V&V Walsh of
Bunbury, Western Australia, exports its product direct from the Bunbury
International Port to its overseas markets. Western Australia has a
very large sheep flock, and the company supplies frozen boneless and
bone-in mutton products cut and packed for various markets throughout
the world. V&V Walsh is a family-owned business and was established
by Vern & Jean Walsh in 1957. Their sons Peter & Greg Walsh now
operate the business.
The company’s Bunbury abattoir slaughters 3,500 lamb and mutton
per day of which approx. half is boned and packed on-site. The group’s
facility also slaughters 400 head of cattle per day, with the ability
to bone and process 300 beef carcasses per day. All of V&V Walsh’s
beef and sheep are slaughtered by accredited Muslim slaughtermen. The
Halal kill is certified and accredited by the Islamic Association of
Katanning, Western Australia. V&V Walsh’s beef and sheep products
are distributed throughout Australia and retail through Woolworth’s
supermarkets, restaurants and speciality food stores. It is also one of
Australia’s leading exporters. V&V
Walsh has markets in many countries, including China, where it has an office in Beijing.