Vigilance required at the border

There has been a lot of discussion about the risk of foot and mouth disease getting into Australia, particularly since its spread into Indonesia (including Bali).

While we need to stress that the risk is relatively low, assessed recently at an 11.6 per cent chance in the next five years, what would be at risk from an export value perspective if FMD got in and exports were banned?

This article focuses on the export value of the trade data for FY20-21 across a range of agricultural sectors that would be affected by a trade halt, including the live export sector, dairy, beef, sheep and goat meat, pig meat and wool exports.

Firstly, on a national basis, the largest impact would be felt by the beef export sector with export values of $9.2 billion over FY20-21.

Sheep meat exports come in next at around $3.6 billion.

Dairy, wool and live cattle exports are also affected significantly on a national level at $2.6 billion, $2.4 billion and $1.5 billion, respectively.

The total export value across all sectors nationally reaches $20 billion.

Victoria and Western Australia are probably the two most evenly spread states when it comes to FMD risk across the agricultural sectors.

In WA, sheep meat exports and wool are neck and neck for being most at risk, sitting on $533 million and $505 million, respectively.

Meanwhile, the WA live cattle trade and the boxed beef export sector are in a tussle for second place (for a prize nobody wants to win) at $302 million and $251 million, respectively.

Victorian dairy tops the risk profile at nearly $2 billion of export value.

Victorian boxed beef and sheep meat are next in the firing line at $1.5 billion and $1.4 billion, respectively.

The Victorian wool trade isn’t too far off the pace either at an export value of $1.3 billion.

NSW has a bit more of a diverse spread of risk, although still heavily weighted towards the boxed red meat trade.

The beef export trade is valued at $1.7 billion and sheep meat exports sit at nearly $1.1 billion.

Wool and dairy feature prominently, too, at $466 million and $254 million, respectively.

Meanwhile in Queensland it is the cattle sector–be it fresh, chilled-frozen boxed exports or live cattle–that will be the hardest hit.

The value of the beef export sector in Queensland sits at around $5.3 billion, and the live cattle industry comes in at around $343 million.

The South Australian sheep meat export sector has the most to lose in an FMD trade ban with a value of $522 million at risk.

Boxed beef is up there, too, at $196 million, with wool and dairy straddling either side of the $100 million mark.

Tasmania’s FMD risk profile is dominated by beef exports and dairy at $242 million and $164 million.

Meanwhile, the Northern Territory is almost exclusively a live cattle export affair, with $547 million at risk.

Risk at its most basic is probability versus severity.

At present, the risk of an incursion is still relatively low, but clearly an outbreak in Australia would have huge consequences.

However, the virus still must get from an infected animal in Indonesia to a susceptible animal in Australia.

To get an outbreak, we need a number of errors to occur.

It’s not impossible, but it is still low risk.

Vigilance at our borders is a crucial tool in keeping us safe.

• Matt Dalgleish is a manager of commodity market insights at Thomas Elder Markets (TEM)