Sector summary 2014
Food and agriculture – red meat
The trade and investment sectors contained in the sector summary series have been compiled from Australian and
New Zealand Standard Industry Classification (ANZSIC) classes using a value chain approach. This means that
industry classes from ANZSIC have been grouped together to provide estimates of the size of the particular trade
and investment sectors.
Coverage: the farming of cattle and sheep for meat production and associated downstream processing.
Key indicators
Regional employment
Percentage of Tasmanian total
Red meat
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
24%
North
West
30%
North
South
46%
Employment
International Exports
Key statistics at a glance
Indicator
Units
Period
Data
Change from
five years ago
Per cent of
Tasmania
Per cent of
Australia
Gross packed and processed value (a)
Employment (b)
International exports (c)
Incomes (average weekly) (d)
Education (e)
Employment (proportion full/part) (f)
$M
No.
$M
$
No.
Type
2010-11
2011
2012-13
2011
2011
2011
$361
3 419
$139
$706
910
Full-time
NA
-9.4%
NA
15.6%
NA
NA
NA
1.6%
4.6%
80.0%
26.6%
71.0%
NA
1.3%
2.0%
83.2%
36.1%
77.5%
Sources: Australian Bureau of Statistics (ABS) (2012, 2013), Department of Economic Development, Tourism and the Arts (2013), Department of State
Growth (2014), AEC Group
(a) Tasmanian Food and Beverage Industry Scorecard 2010-11, Department of Primary Industries, Water and Environment. Includes beef, sheep and other
livestock.
(b) 2011 ABS Census. AEC Group considers this the most accurate estimate of employment at the detailed four digit ANZSIC level.
(c) Estimates of international exports using ABS data.
(d) 2011 ABS Census. This includes employment and non-employment related income (for example, rents, dividends, interest, child support and government
pensions and allowances). A percentage above 100 per cent of average weekly income suggests workers in this industry earn higher than the average wage.
(e) 2011 ABS Census. Education measured by the number of employees who have completed Year 12 (or equivalent studies). Per cent of Tasmania/Australia
shows the proportion of workers in this sector who have attained this level of education.
(f) 2011 ABS Census data. Per cent of Tasmania/Australia shows the proportion of workers employed in this manner.
Constraints and opportunities
The red meat industries (beef and sheep meat) are major contributors to the Tasmanian agricultural economy, with
around 2 600 farms carrying a total of about 472 000 beef cattle, and around 1 690 farms carrying a total of about
2.4 million sheep in 2011-121.
In 2011-12, the value of the red meat produced from Tasmanian herds was approximately $240 million at the farm
gate and $335 million processed2. The sector accounts for around 25 per cent of the total annual value of
agricultural production (excluding non-food products)3. Beef production dominates the red meat industry,
accounting for approximately 64 per cent of total farm-gate value, while lamb and mutton accounts for the
remaining 36 per cent4.
During the past 15 years, Tasmania’s beef cattle herd has remained relatively stable at around 500 000, while sheep
numbers have declined dramatically from around 3.8 million in 1997-98 to around 2.4 million in 2011-12. Slaughter
statistics show that in 2012-13, 201 306 cattle, 264 056 mutton sheep, and 598 017 lambs were processed in
Tasmania, representing significant increases for each product category5. In 2011-12, no Tasmanian beef cattle, but
almost 400 000 sheep were slaughtered interstate6. Some weaner cattle do leave the state.
The red meat processing sector is dominated by two large export-accredited businesses. JBS Australia, which
operates abattoirs at Longford and Devonport, and Greenhams based at Smithton, account for approximately 90
per cent of red meat processed in the state. Following the closure of the JBS Australia-owned abattoir on King
Island in September 2012, approximately 35 000 head of cattle per year7 are shipped from King Island to the two
major mainland Tasmanian processors. Cressy-based processor Tasmanian Quality Meats (TQM) focuses on sheep
and bobby calf processing and is Tier 1 (limited) export licence accredited.
Approximately half of processed Tasmanian beef is exported overseas. Japan is Tasmania’s most important beef
market, followed by the United States8. Increased export demand for light lambs, primarily to the Middle East, has
reduced supply of heavy lambs available and increased domestic price pressure for both products.
Like many of the state’s food production industries, the red meat sector is small by Australian standards and
insignificant by international standards. Tasmania’s point of difference relative to other jurisdictions is linked to
‘clean and green’ factors, including:





1
A ban on hormone growth promotants and a moratorium on genetically modified organisms (GMOs)
Low-cost, high-quality, primarily pasture-based production
Relative disease freedom
The development of differentiated brands and products based on a quality proposition, in domestic and
international markets
Strong animal welfare standards
ABS, Agricultural Commodities, Australia, 2011-12, Cat No 7121.0, 2013.
DPIPWE, Tasmanian Livestock Industry At A Glance, 2011-12, (unpublished report), p. 1
3
Department of Primary Industries, Parks, Water and Environment, Tasmanian Food and Beverage Industry Scorecard 2010-11.
4
DPIPWE, Tasmanian Livestock Industry At A Glance, 2011-12, (unpublished report), p. 1
5
Tasmanian Country, Friday July 5 2013, page 11.
6
DPIPWE, Tasmanian Livestock Industry At A Glance, 2011-12, (unpublished report), p. 2
7
TIA, personal communication, Peter Ball, 28 October 2013
8
DPIPWE, Tasmanian Livestock Industry At A Glance, 2011-12, (unpublished report), p. 1; Department of Economic Development, Tourism and the Arts
2011-12 Export Statistics, (Taken from ABS export data).
2
2
Constraints and opportunities
Constraints

The processing sector is constrained by its relatively small size and the age of waste management
infrastructure at its processing plants (although recent expansion at Greenhams and proposed upgrades to
waste infrastructure servicing Swifts’ Longford plant will help address this issue).

The industry’s lack of scale (particularly in the processing sector) is exacerbated by seasonality of supply
and the fact that significant numbers of livestock (sheep) are transported to the mainland for processing.

Infrastructure – costs of, and any reduction in, port access or sea freight services to the mainland.

Limited competition within the local processing industry and retail supermarkets impacts negatively on
farmers’ bargaining positions.

Assuring brand and product integrity, and defining what constitutes Tasmanian meat. Currently any meat
slaughtered in Tasmania can be branded Tasmanian, even if it was bred and grown elsewhere. Consumers
are not always able to identify Tasmanian-grown product9.

Managing generational change and lack of succession planning for some enterprises.

Access to a reliable and stable workforce is an issue for abattoirs and producers.

Potentially higher returns from competing uses of land, such as dairy, can make sustainable grazing a less
profitable option (although dairy enterprises require greater capital investment and more intensive
management).

Negative consumer perceptions and stricter regulations around animal husbandry (for example, sheep
mulesing), vertebrate pest management (for example, grazing native animals) and the environmental impact
of red meat production (water use and greenhouse gas emissions) may potentially impact on enterprise
profitability.

Industry advises that grazing native animals are significantly reducing available feed on many farms.

Rising input costs and the relatively-high Australian dollar impact on competitiveness, particularly in export
markets.

Regulation and ‘red tape’ are perceived as barriers to development and a constraint to business. This may
include regulation, tax arrangements and administrative processes as well as other issues such as variable
planning schemes.
Opportunities

9
Tasmania’s relative pest and disease-free status, sustainable pasture-based production systems, GMO
moratorium, hormone growth promotants ban and a high-quality, differentiated product has the potential
to gain greater recognition in higher-value markets and a price premium with strategic marketing particularly as paddock-to-plate product tracing and systems develop. These attributes are central to the
branding of Tasmanian beef in Japan and are gaining increasing recognition domestically, for example in 2011
Coles adopted a national policy to only stock hormone growth promotants-free beef.
In 2012 in separate proceedings the ACCC successfully prosecuted two Victorian meat retailers for falsely claiming or implying that meat sourced from
Victoria was from King Island. < http://www.ausfoodnews.com.au/tag/federal-court >
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
Continued investment in branding (whether generic ‘Tasmanian’ branding or individual companies and
products), quality assurance systems (such as Meat Standards Australia grading) and traceability have the
potential to support price premiums and provide a buffer against commodity market volatility.

Developing improved farming practices and raising productivity. Potential improvements include betteradapted pasture species, more efficient use of pasture, aligning farm systems to processor and market
requirements and better integration of meat production and irrigated cropping.

Growing demand from established markets in the Middle East (lamb) and newer markets such as China
(beef and lamb) with Meat and Livestock Australia expecting beef exports to hit a record 1 million tonnes
in 2012/201310.

Increasing demand for sustainably-produced food (both globally and domestically) and shifting consumer
preferences for regionally-identifiable food.

In response to increasing demand for grass-fed beef, development of a national ‘grass fed’ standard and a
module to verify best practice environmental stewardship.

Investment in irrigation schemes may provide increased red meat opportunities in sustainable crop
rotations and dedicated red meat production systems.
Strategy summary
Red meat production is highly fragmented with many smaller farms and enterprises rearing animals as part of
cropping rotations as well as dedicated cattle and sheep enterprises operating on a larger scale. The red meat
industry is developing an overarching industry development plan.
Discussion
Pest and disease freedom is one of the keystones of the Tasmanian (and Australian) red meat brand, underpinning
access to international markets. Maintaining biosecurity (through risk-based assessment and effective response
plans and capability) is fundamental to the viability of the industry. Dedicated government resources (State and
Commonwealth Government) are required to maintain the situation.
Greater emphasis on branding can leverage Tasmania’s environmental advantages and HGP/GMO bans, improving
market access and potentially improving returns for producers and processors. Industry players advise that
Tasmanian-branded meat is gaining increased recognition in the domestic markets (provided retailers and labels
make consumers aware of its Tasmanian origin) but has little currency overseas.
The red meat industry is exposed to global markets and the dominant domestic retailers, and producers are
expected to more-closely meet the needs of supply chain customers and the final consumer. By better
understanding how effective value chains work, who the end customer is and what their requirements are,
producers can improve their competitiveness and sustainability.
In paddocks close to bushland, native animals consume significant quantities of pasture, and while this is an ongoing
problem for producers, an integrated package of measures can be effective, if properly implemented. Government
has undertaken considerable research and awareness raising which could be implemented and demonstrated
through existing whole farm, enterprise or pasture management programs. Changes to export regulations by the
Commonwealth government may create greater export opportunities for native animal meat and furs.
10
Meat and Livestock Australia, 15 August 2013, < http://www.mla.com.au/Prices-and-markets/Market-news/2012-13-Australian-beef-export-valuesover-5-billion >
4
Tasmanian Government strategy
The Tasmanian Government, through its Cultivating Prosperity: A 2050 Vision for Agriculture policy, is putting the
State's primary industries on the path to achieving a ten-fold increase in the value of the sector by 2050.
The Tasmanian Government’s strategies include:

Maintain a risk-based approach to biosecurity and have effective plans in place for dealing with worst-case
scenarios (such as Foot and Mouth Disease, Ovine Johne’s Disease or Bovine Spongiform Encephalopathy
outbreak), either in Tasmania or on mainland Australia. The Tasmanian Government announced the
formation of Biosecurity Tasmania in May 2014. Biosecurity Tasmania is a single Government unit with
expanded biosecurity responsibilities covering primary industries and the environment. Biosecurity
Tasmania is involved across the biosecurity spectrum from pre-border to post-border, policy and
legislation, risk assessment, research, diagnostics and response.

A ‘Target 120’ program was established to assist King Island cattle producers to transition from supplying a
local abattoir to supplying processors remote from the Island through two initiatives. These are a transport
assistance payment of $30 per beast transported from the Island for processing, and support to undertake a
business analysis and develop strategies that will assist them achieve long-term sustainable production and
financial viability.

Continue to develop programs and initiatives aimed at improving productivity and profitability. Relevant
programs, such as ‘Making More from Sheep’, ‘Sheep Connect’ and ‘More Beef from Pastures’ are run by
the Tasmanian Institute of Agriculture (TIA) and other service providers.

Support brand and market development through high-level branding, marketing strategy and export
marketing programs. The development of a national ‘grass fed standard’ and best practice environmental
standards will benefit Tasmanian producers. Export marketing programs and initiatives run by the
department will support the efforts of individual processors.

Development of second-tranche Irrigation Tasmania irrigation schemes in Tasmania will help to increase
production of red meat across the state.

Maintain the Tasmanian Freight Equalisation Scheme. Under the Scheme, goods (including livestock)
produced or manufactured in Tasmania and shipped for permanent use or sale on mainland Australia are
eligible for assistance with freight costs. The scheme supports producers seeking to access mainland animal
markets, enhances competition for Tasmanian animals and improves the bargaining position of farmers with
limited market channels within Tasmania.
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