Australia’s meat and livestock industry is among the most efficient production systems in the world. Though input costs increased in 2023, largely due to international conflict and labour constraints resulting from COVID-19’s ongoing impact, the industry has nevertheless performed reasonably well.
The latest 2023 State of the Industry Report from Meat and Livestock Australia indicates that, despite a shift in market conditions and a decline in livestock prices, Australian livestock production is well placed to manage a volatile climate cycle and shift towards a destocking period.
State of the Industry Report 2023 highlights
The operating environment
In terms of global numbers, Australia has a small portion of the world’s sheep and cattle, yet remains a key exporter in red meat markets. Australia was the fourth largest beef exporter after Brazil, India and the US, and remains the largest exporter of sheep meat after shipping 502,758 live sheep. With global meat consumption increasing, Australia’s per capita beef and sheep meat consumption continues to be one of the largest in the world, assisted by an ease in retail prices in the twelve months to 30th June 2023.
The industry environment
The Australian red meat and livestock industry accounts for roughly 1.7% of the country’s key industry turnover, an increase compared to previous years. It also plays an important role in the employment of people in rural and regional communities and accounts for 66% of Australia’s direct employment in agriculture production. The number of businesses has declined in the last five years due to economies of scale and the move to larger farms. However, Western Australia has bucked the trend by actually growing its number of red meat businesses by 3.5%.
Species performance statistics
The number of cattle in Australia remained firm at 24.4 million head (as of 30 June 2021), 91% of which was beef cattle. The value of beef exports increased by 13%, while the live cattle export numbers declined by 22%. With another year of La Niña resulting in good rainfall and favourable seasonal conditions, stock were retained on-farm and cattle prices were high. Nevertheless, with high grain prices, input costs were higher, so the average cash income of Australian beef producers was slightly lower.
The national sheep flock grew 3%, with the majority accounted for by breeding ewes. The level of lamb production was up 5% and was supported by strong carcass weights. The USA remained Australia’s largest lamb export destination and the value of sheep meat exports increased by 14% from the previous year. Conversely, live exports were down 13% on the previous year.
A snapshot of industry issues
On-farm capital investments
In many regions in Australia, good seasons and high commodity prices have seen significant re-investment of profits into opportunities that increase production and efficiencies, including genetics. Genetic data has been proven to be a powerful tool for cattle, sheep, and lamb producers, and there has been increased adoption of genetic testing across the sector. This increase in adoption by seedstock producers has seen the improvements flow through to commercial producers and the quality of the herd has improved as a whole.
The 2022 Genetic Insights Report cited that 76% of seedstock cattle producers were users of genetic evaluation services and that 56% of seedstock sheep producers were members of Sheep Genetics. Over the past ten years, cattle and sheep producers have been “very satisfied” or “fairly satisfied” in the genetic gains, which suggests that the increased adoption of genetics tools has improved the outcomes on-farm and thus the productivity of the industry as a whole.
Biosecurity
Livestock producers play an important role in reducing biosecurity risks, and ensuring the quality and effectiveness of biosecurity plans is a focus for the industry. Outbreaks of foot-and-mouth disease and lumpy skin disease in Indonesia brought about the strengthening of Australia’s border controls, preparing for potential outbreaks within Australia and supporting Indonesia with vaccines and resources.
The industry also committed to improving livestock traceability, which is crucial to preventing the spread of disease if an outbreak occurs. Electronic identification (eID) of sheep was mandated and there have been improvements to the NLIS database. There has also been continued education around biosecurity awareness within the industry and producers have gained access to numerous tools and plans for implementing effective biosecurity practices on-farm.
CN30 goal
The Australian red meat and livestock industry has set a target to be carbon neutral by 2030 (CN30). The latest figures indicate that the sector has lowered its GHG emissions by 64.8% from the 2005 baseline year and is well placed to meet this target by 2030. This has largely been achieved with herd productivity gains and increased carbon storage in vegetation. It is predicted that from 2025 onwards, the adoption of feed additives in grazing management practices and genetic tools for selecting low-methane sheep and cattle will start to be realised.
Market dynamics
The State of the Industry Report relates to the 2022 financial year, and there has been a change in the market conditions since the reporting period ended and the publication of the report. Weather conditions and livestock prices, and thus producer sentiment, have deteriorated over the past nine months.
Rainfall in the first part of 2023 has been well below average across the east coast and concerns about impending drought and high herd and flock numbers have resulted in producers looking to destock and an increased supply of sheep and cattle on the market. Cattle slaughter has jumped to the highest in three years and lamb and sheep slaughter has followed a similar trend. Saleyard prices have decreased by 44-64% for cattle and 42-57% for lamb. Meanwhile, Mutton prices have been worse, falling 72% as ewes retained to rebuild the flock are entering a saturated market.
The role of XytoVet in supporting the industry
Despite a downturn in conditions for Australia’s livestock industry, genetic data remains a powerful tool for improving productivity and sustainability for both seedstock and commercial producers.
As a wholly Australian-owned and operated service provider for genetic services, XytoVet is well-placed to understand the current industry dynamics and build solutions to support the sector’s needs. The team at XytoVet are always willing to share their local knowledge and support producers in making management decisions that help their business.
If you are interested in finding further information about the genetic services that XytoVet can provide, please contact our Client Services team using the form below.
