WESTERN Australia’s northern cattle industry and the federal government have expressed concern over the increasing reliance on the nation’s largest live export market, Indonesia, in light of falling profits and rising costs.
The Commonwealth says it has already begun exploring opportunities in new markets, including Vietnam, to counter any potential problems that may arise from the industry’s heavy dependence on Indonesia.
Addressing the annual Pastoralists and Graziers Association convention last week, Agriculture, Forestry and Fisheries Minister Tony Burke said the issue was one that worried him.
“I saw what happened to the kangaroo industry last year when they were too reliant on a single market, in that case the Russian market, which went bad,” Mr Burke said.
“I have no reason to believe the Indonesian market is anything other than strong ... but when 90 per cent is going to a central market and it’s underpinning the economy of the whole of northern Australia, I have a concern as to whether or not we should be opening up extra opportunities.”
Heytesbury chief executive Paul Holmes a Court said the largest arm to his business, the Heytesbury Cattle Company, would export 40,000 of its 165,000 cattle to Indonesia this year.
“You might think I’m confident about the northern pastoral regions, unfortunately and sadly for me this is not the case,” he said.
“Indeed we face a very real set of serious and imminent threats.
“The financial viability of our industry is under increasing pressure and if current trends continue our business as we know it will cease to be.”
Citing falling cattle prices (dropping from $620 to $540 per head during the past decade) and increasing labour costs and lease hold fees (up 700 per cent in WA this year), Mr Holmes a Court said he would gladly sell to any other country that could match Indonesian prices.
Last month, Meat and Livestock Australia and LiveCorp said WA made up 46 per cent of the country’s live export earnings in 2009 for all animals, which totalled $996.5 million, the strongest returns in seven years.
Exports of WA cattle surpassed $218 million with total volume eclipsing 350,000 as national cattle exports to Indonesia reached a record 768,133 head, representing 81 per cent of export numbers to all countries.
