REPRESENTING AUSTRALIAN SHEEP PRODUCERS Graham Smith, CEO
C ONTENTS • Background on Sheep Producers Australia (SPA)? • Major SPA projects and activities • Some national Industry & SPA challenges • Observations from recent trips to the Gulf States, Middle East & America 2
SHEEP PRODUCERS AUSTRALIA Animal Health Australia • SPA is the Prescribed Body for the sheepmeat industry in Australia within the Red Meat Industry MoU, under the Australian Meat and Livestock Act 1997 Meat and Livestock Australia • As the recognised peak body for the sheepmeat industry under the Act, SPA sets the strategic objectives to be National Residue Survey pursued by the levy funded organisations and examines and approves their programs and budgets . 3
PURPOSE OF SHEEP PRODUCERS AUSTRALIA SPA’s purpose is to provide national representation and leadership for Australian sheep meat producers. This is achieved through wide and regular consultation with key industry organisations, relevant Federal Government Departments and other bodies regarding issues of national and international importance to the sheep meat and live sheep export sectors.
OUR VOICE…. Structure and Policy Development 5
OUR VOICE…. Role of Sheep Producers Australia S crutiny of levy investment P olicy development A dvocacy 6
OUR VOICE…. SPA Priority Pillars Improving Sheep Health and Welfare Securing Markets Guaranteeing Product Integrity Driving Innovation Influencing Business Outcomes Building Industry Leadership 8
NATIONAL INDUSTRY STRUCTURE! ons erations National ery / Operati Residue Survey livery Deliv trategy cy / Strateg l 0 licy Poli State te Farmi ming ng Organ rganisa sation tions s / Producer oducers 9
RECENT SPA PROJECTS • Red Meat MoU • Australian Red Meat Industry Strategic Plan (MISP) • Australian Agri R & D capabilities • Live Sheep Exports • Lamb Definition changes • Sheep Traceability • Future of national Sheep Industry Representation • Bio-Security (incl RBP) • Sheep Sustainability Framework • Sheep Leadership Network • Lamb Survivability • SPA Board Selection project • Melbourne Policy Meeting • Trips to the Middle-East & America
SOME CONTENTIOUS SHEEP INDUSTRY CHALLENGES • National Industry Representation & Direction • Drought • Supply of Animals to Processors • Live Sheep Exports • Animal Health & Welfare, including Mulesing • Sheep Feedlots • Traceability • Level of Industry R & D and Product Development intensity • Biosecurity
VISIT TO THE GULF STATES & MIDDLE EAST Objectives were: 1. Engage and understand first-hand the current situation of Australia’s live sheep export trade within major Middle -East markets. NOTE: About 1.2 million sheep exported in 2018. The largest Australian markets in the region (by volume) are: • Kuwait (34%) • Qatar (33%) • Jordan (10%). 2. Begin to determine what the Australian sheep industry needs to focus on in the next 5+ years to maintain and grow its market share and revenue 12
TRIP TO THE MIDDLE-EAST
BACKGROUND • Most red meat is imported into the region from at least 10 countries. Australian product is well regarded & represented • All markets sell a mixture of Live Sheep (locally slaughtered), Chilled portions and Carcass meat. Volumes within each sector depend on the size, sophistication and prevalence of western cooking styles in the market • There are long traditions, religious beliefs and behaviours associated with meat. This underpins how it is bought & consumed (very different to the average Australian) • e.g. many like to choose their animal to slaughter (increasingly on an App), visit a processor to see via a viewing room
DIFFERENT VALUES AND EXPECTATIONS
GULF STATES & MIDDLE EAST • Great cultural, economic and market diversity, with meat consumption underpinning diets • Chicken is dominant, followed by beef and lamb (in UAE seafood is second only to chicken) • Traditionally an animal was killed & eaten quickly due to a lack of refrigeration in a harsh climate. This is changing • Markets are evolving, with large sophisticated supermarkets in the Gulf States and growing in Jordan. The Live Export trade has fallen as a percentage of all sheepmeat imports & it appears this will continue in the years ahead • Food security and continuity are “top of mind” in all countries • Significant markets for Chilled, Frozen and Live Animals 16
Australian Sheep at a Dubai Feedlot
MAJOR MARKET SEGMENTS 1. Supermarkets and supermarket butchers : Dominant in the Gulf States and growing in Jordan. Core buyers are middle-upper class local Arabs, and western ex-pats 2. Traditional Wet Markets : Not as strong as they once were, but still important to many local people and large numbers of foreign workers, generally doing manual jobs. Very price sensitive, more so than quality. Many believe these markets provide the freshest & safest meat 3. Viewing Chain/supervised slaughter: Live animals are selected whole and then slaughtered under direction to specification 4. Butcher shops: Both high end and traditional shops. A mix of chilled carcass, chilled portion and locally slaughtered. Some are embedded within a supermarket. • On-line sales: Appears to be very small at present, but growing
A Modern Supermarket
GULF STATES & MIDDLE EAST • Australian live sheep exports have been traditionally been very important in ensuring high quality supply & product • Australia is perceived as being in the “A league” (well regarded), as is New Zealand, at the quality end of the market • Due to interrupted supplies of live sheep from Australia, importers are turning to other countries (losing market share) • Australia’s major live sheep competitors include; Somalia, Sudan, India, Romania & South Africa (although seasonal) • Australia is seen as the country best able to consistently supply the volumes and high quality required 20
GULF STATES & MIDDLE EAST CONT……. • Meat and Livestock Australia (MLA) have a very important role to play, with excellent “on the ground” capabilities, (essential). This includes; relationship building, technical assistance and training to Importers and Processors • MLA Marketing programmes have also stimulated demand for Australian products in an increasingly competitive environment • Live Exports will remain a significant segment in all of the countries visited for many years due to the supply chain being less sophisticated (than what we are used to in Australia)
GULF STATES & MIDDLE EAST CONT……. • Younger, more affluent people are prepared to buy packaged cuts of meat without supervised slaughter, including prepacked meat from the supermarket shelf • Supermarkets are also taking the place of the traditional markets, by offering over-the -counter full carcass meat sales from supermarkets
Modern Processing Facility
GULF STATES & MIDDLE EAST CONT……. But: • Australia needs to leverage its market position gained from a long history of trading Live Sheep exports & think more about new Sales Channels & Marketing • Who are potentially the key customers within each of the channels. How are they changing? What do they want & how do we supply greater margin products and services? • Given the rise of better educated millennials & changing diets across the region, value added chilled products are likely to grow in volume
Processing Facility-with viewing room!
THE CHALLENGE The markets in the Gulf States and Middle-East are changing. The challenge for Western Australia (& SA to a lesser extent) is to supply greater volumes of chilled and frozen products and to further develop processing capabilities and change flock structures to capitalise on these changes. But: • Can this be done economically & at good prices? • Will processing capacity increase? • Will increased uncertainty drive more farmers away from sheep? • Can transport and supply-chains cope commercially? • What type of transitional period will be required to get a better balance between Live Exports, Chilled and Frozen? 27
SPA AMERICAN TRIP Accounts for 50% of total American beef production And consumers perceive that its healthy!
Major American Meat Sales
Strategic Context • The Australian Red Meat sector has done incredibly well in recent decades to export $13b, or approx. 60% of what it produces to overseas customers • This has a significant (positive) impact on our domestic cost structures, capabilities & investments • America is our most profitable market (just, with China rapidly catching). In 2018 the US bought approx. $1.5b in beef (40% grounded beef for hamburgers) & $800m in lamb/mutton But, will Australia be able to maintain its American red meat revenue streams at similar or greater levels in the future?
Global Markets for Australian Red Meat & Livestock Source: HIS Market, Global Trade Atlas
Recommend
More recommend
