WA farmers to pay dearly in game of live export politics
Margins are already tight so it’s obvious producers will be paid less for their stock, warns Jenne Brammer
WA sheep farmers are already paying the price for the live export controversy — and it’s about to get tougher.
The debacle, triggered by horrific television footage released five weeks ago, means WA’s sheep farmers face lower returns for their sheep, irrespective of whether Agriculture Minister Alannah MacTiernan has the powers to impose a pause on live export trade during the northern summer months.
Recommendations in the McCarthy review adopted by Federal Agriculture Minister David Littleproud mean animal welfare conditions will improve somewhat, which is to be applauded, but there will be a price to pay.
New formulas will see stocking densities fall almost 30 per cent over the hotter months, yet voyages have fixed costs.
Exporters will also have to stump up for an independent observer aboard every journey, at a cost of about $1500 a day over the 12 to 22-day voyages.
WAFarmers President Tony York said this would result in export companies having to work out the repercussions for their own operations, though it may also lead to some efficiency gains and higher care levels in order to make every animal count.
But with already tight margins, there’s little fat to be absorbed by the exporters.
It will be hard to pass costs on to customers, given high competition in the market, so it’s obvious farmers will be paid less for their sheep.
Peter Boyle, who farms at York and buys and sells sheep for the live export trade, said he had seen the price being paid for live export-suitable sheep fall up to 20 per cent since the controversy emerged, mainly because of lower demand caused by reduced stocking densities and uncertainty.
Industry sources say $30 less an animal — about 25 per cent less than what was being paid a few months ago — is inevitable.
Exporters were reported to be operating conservatively yesterday at a weekly auction of sheep held at the Muchea sale yards, but a week earlier they had no presence at all. An even bleaker financial picture is in the frame if Ms MacTiernan finds she does have the powers to impose a northern summer ban on WA shipments.
Clearly, if such a ban went ahead, the weaker demand to the tune of 200,000 to 300,000 sheep over these weeks will lead to even lower prices for farmers.
Although Ms MacTiernan has thrashed out the issues with the local processing industry, which is rubbing its hands with glee at the idea of getting its hands on this supply, she conceded yesterday that farmers would be paid less for their livestock.
And the impact of a summer ban won’t last during these weeks alone. As the Pastoralists and Graziers Association and WAFarmers have argued, WA would establish itself as an unreliable supplier to customers who are spoilt for choice.
If WA tells its customers they can’t have its sheep during these months, they’re bound to go elsewhere throughout the year, farm lobby groups have argued.
Customers could also retaliate by not buying other WA products such as chilled meat, the PGA says.
That needs to be considered, Ms MacTiernan argues, against the likelihood of a bigger price being paid if there is an outright ban as a result of the Federal Government’s implemented recommendations from the McCarthy report not going far enough to address public concerns.
Citing the 2011 ban on live cattle exports to Indonesia, she said there was a big under-reaction by the minister at the time to some fairly shocking footage.
“So there was an overreaction of closing the trade down overnight,” she said. “I’ve been trying to avoid that. I’ve been trying to say let’s not have an under-reaction here — inevitably leading to a groundswell of overreaction.
“What Minister Littleproud and the Turnbull Government have done here today is perhaps set up the circumstances where we may see (a repeat of) the 2011 situation.”