Live ex to Indonesia fragile
Well, competition with the meat trade is one thing…..but the live ex trade to Indonesia is looking to be problematic all round in 2017: having to import breeders with feeders, price of Aus cattle in an already depleted herd….effects of changing cattle weights on local industry stability…exporters having to run at losses to keep their ships running…..and potentially other issues looming.
Live ex has never been a level playing field and has always been a high risk investment. No doubt we will all be expected to empty our pockets to support the next industry crisis for Aussie live-ex farmers ……or just perhaps, they could start being innovative and strategic to reduce the north’s dependence on this high risk trade….risk to farmers (who have a say) and their animals (which don't).
Remember all that stuff about Indonesia needing protein ....and Australia being so kind and benevolent by providing our live cattle to be slaughtered any which way, just so we could help out with nutrition for our neighbours?
Well, now they are getting their protein from meat…imported from India. Go figure. What a surprise…..meat apparently is just fine for the Indonesians protein requirements….and Australia could have been capitalising on the meat export market rather than pursuing some archaic trade that inflicted so much suffering on our animals. Not that the live ex trade is in any way in competition with the chilled meat trade....
And more on Wellard woes
After putting a couple of its ships on the market, Wellard is now selling its Beaufort River Meats business. According to The West Australian “The sale is the latest attempt by Wellard to improve its position after a horror past year.” The company, which was valued on the Australian Securities Exchange at $556 million when it listed a year ago, is now worth about $80 million. Investors have apparently “fled the stock” following profit downgrades, which were triggered by mechanical problems in Wellard’s carriers, shipping delays and high cattle prices.
2017 and….Wellard still in trouble. The West Australian reported "After a disastrous 2016, Wellard announced on the year’s first day of ASX trading that it was again in breach of its debt covenants"….and again working to have the breach waived.
How distressing for the shareholders….but....live export is an inherently risky business.....so an inherently risky investment.
Well no-one ever expected that exported dairy cows would be well looked after in China (or other countries). And unlike slaughter animals, there is no supply chain assurance. ESCAS for all its problems, at least provides some “protection” for Australian animals. Our breeders and dairy animals have the rest of their lives to deal with the consequences of export.
And, surprise, surprise, its not just an animal welfare problem. With at least 56 Chinese dairy farms reportedly having 10000 or more cattle, giant piles of black manure tower over surrounding fields, while rancid-smelling effluent from thousands of cows spills onto the land of nearby farmers. And its not just manure….its the rubbish, the injections, the syringes….
Estimates say that just 3,500 cows can produce 100,000 tonnes of fluid waste and effluent a year. Chinese farms are required to process it into fertiliser, but regulations are often flouted. Farms in NZ, one of the leaders in dairy mega-farms, rarely exceed 3000 cows…and the NZers have the experience to deal with the environmental, biosecurity and welfare issues that arise. China do not……so humans and animals suffer.
In late December, Tianjin Port, the major port for Australian live-ex cattle, suspended all operations due to an air pollution red alert issued by the city government. Port authorities had to stop all loading and discharging of bulk cargoes, and heavy port congestion and berthing delays were expected for bulk cargo vessels.
So what if that ship, loaded with Australian cattle gets caught up in this problem? Could be a case of foul air, no food AND no vet… …..yep that's right, these voyages are no longer routinely accompanied by a veterinarian because only voyages >10 days to the Middle East have a veterinarian under current policy.
Chinese pollution is not likely to be a problem that is going to go away…..just another inherent risk in this inherently risky business.