Central Australian Meat Profit Day 2006

Over the two days, you will hear from leading industry experts, learn more about the state of
the industry and gather the latest information on markets. The topics you will hear about are
those that are relevant to the day-today running of your enterprise, a lot of which you can go
away and start implementing tomorrow.

Your enterprise is part of an industry that leads the world. It is part of an industry that has
a reputation here and around the world as a supplier of safe, healthy and nutritious red meat.

Our industry has been hit by a number of significant events over the past few years.

Arguably the biggest event was the discovery of BSE in the US two and a half years ago. The discovery sent shockwaves through the global beef market and the US has only just regained limited entry into the valuable Japanese beef market. As I write this the US has yet to re-gain entry to the Korean beef market – Australia’s third most valuable market.

The drought – the worst in over 100 years – has also had an impact on the Australian red
meat industry. Our cattle herd and sheep flocks have suffered significant losses and will take some years and better seasons to recover.

All livestock producers in some way have felt the impact of these events.

However, there are many positives out there for the red meat and livestock industry. There is the strength of the Japanese market for Australian beef. Interest in Australian beef from Japan has increased and we are now exporting record amounts to this important market. We are confident the industry can maintain a substantial share of the gains we made whilst our main competitor, the US, was banned from that market.

Overall, live cattle exports have dropped over recent years, however live cattle exports into Indonesia are expected to rise by 12 per cent this year and a further eight per cent in 2007.

For sheepmeat, there is ongoing strong demand for lamb, particularly from the US, growing markets in Asia and our important domestic market.

Some events – like the discovery of BSE in the US and Canada – are things we cannot predict or influence. However, there are many things we can do to influence our prosperity.

MLA’s role is to do those things that need to be done for industry that cannot be done at the individual enterprise or farm level. MLA should use levy funds for this purpose and we should seek matching industry funds, as well as government contributions, to drive our levy dollars further.

As such, MLA is focusing on four key areas.

Firstly, we are working to grow demand for Australian red meat, both domestically and overseas.

The ‘Red Meat. Feel Good’ nutrition campaign in Australia is increasing positive attitudes about red meat and helping increase demand on the domestic market. Next month we will be launching an exciting new domestic beef marketing campaign, which has been made possible by the recent beef levy increase.

Marketing campaigns such as those f or lamb in the US and for beef in both Japan and Korea are ongoing and continue to be effective in promoting Australian red meat in these important markets.

Eating quality programs continue to gain momentum. MSA now underpins a range of household brands in all states and the number of retail and foodservice participants has increased.

The second area MLA focuses on is developing competitive advantage from paddock to plate.

An important part of this is the industry-wide research and development needed to maintain our competitive advantage and to improve product quality and consistency.

Productivity growth and the need for cost efficiency are ongoing and will be achieved in a number of different ways. One of the most exciting areas we are investing in is functional genomics – the discovery of genes and their functions. This research has the potential to deliver tools to help deal with problems such as intestinal parasites, ticks and Johne’s disease.

Thirdly, MLA is partnering industry to build capability.

MLA’s ‘reason for being’ is to create opportunities for Australia’s red meat industry to prosper. To be successful MLA must continually build the industry’s capability at every stage of the supply chain. A focus on the integrity and safety of the products we produce is vital to the sustainability of our industry. While Australia deservedly enjoys an international reputation as
a supplier of safe, quality red meat we cannot afford to rest on our laurels. Consumers here and overseas are increasingly demanding more guarantees about product integrity and food safety.

The fourth and final area MLA focuses on is market access.

We are continually working with government and industry to break down trade barriers around the world and to open up new markets and expand existing markets for Australian red meat and livestock.

MLA can provide you with the tools and information to help you improve your enterprise’s profitability and productivity but you are the only one that can put things into action that will get a result.

MLA’s role is to create the best possible trading environment in which you have the widest possible choice of markets and the best tools available to manage your business better.

The Central Australia Meat Profit Day will hopefully go some way towards providing you with the information that will enable you to do this.

Don Heatley
Chairman, Meat & Livestock Australia
29 September 2006