WESTERN Australia’s sheep industry is concerned it has been denied market access options to the Middle East by the Australian Government’s refusal to allow Qatar Airways more flights into major airports.
The Guardian has quoted Transport Minister Catherine King as saying the government’s refusal of a Qatar Civil Aviation Authority request for additional services took into account “all national interest considerations.”
The Federal Government decision has come as confidence in the WA sheep industry plummets due to the planned phaseout of the live sheep trade by sea and lower saleyard prices complicated by processor capacity issues.
WA meat processors have told Sheep Central that more Qatar Airlines flights into Perth would allow more air freight exports throughout the Middle East. Currently WA airfreight exporters are limited to QA flight per day, and to 4-5 metric tonnes per exporter split between three exporters. Airfreight with other airlines is more expensive.
Sheep Central was told Middle East-based airlines shipping airfreight with passenger flights out of Australia are able to indirectly supply most ME markets, including Qatar, Kuwait, Saudi Arabia, Jordan and the United Arab Emirates – all also live sheep export markets for Australia.
Middle East market demand for airfreight products has dropped off during the Northern Summer and the loss of government subsidies has affected trade, but there is always a battle for airfreight space out of Australia, Sheep Central was told.
Episode3 market analyst Matt Dalgleish said getting boxed lamb into the Middle East in the bagged carcase market has historically relied heavily on passenger flights.
“So they are wanting to phase out live sheep and provide options, part of the solution is improved market access for boxed is an ideal one — this is exactly part of the solution.
“It’s not the whole solution, but the bag trade takes those lighter Merino carcases, so it is almost a direct substitute for the type of animals that go out in live export.”
Mr Dalgleish said improved airfreight market is even more vital with the current oversupply of lambs on the Australian market. He said airfreight is part of the solution to providing marketing options to WA farmers facing the live sheep phaseout.
“Instead of encouraging and trying to rebuild the WA flock … they (the Federal Government) haven’t even clarified why it (the Qatar Airways) is in the national interest, it just seems strange.”
An Episode3 comparison of total airfreight volumes, sheep meat airfreight volumes and air passenger numbers to MENA highlights that increased air passenger traffic is required in order to build capacity to ship increased airfreight.
“We should be encouraging this airfreight option for turnoff to assist WA growers, particularly for the “bag lamb” market,” Mr Dalgleish said.
WAFarmers Livestock Council president Geoff Pearson said airfreight of lighter lamb carcases is an alternative to live export, especially during the current Northern Summer moratorium on live sheep shipments to the Middle East in the lead-up to a potential phaseout of the trade by the Federal Government.
“It is concerning if we have less of those airfreight lambs going.
“This is the time we need it the most.”
Lack of kill space not markets is the issue
Pastoralists and Graziers’ Association of WA livestock Committee chair Chris Patmore said the Western Australian sheep industry’s problem at the moment is not a lack of market, but a lack of processing capacity.
“They can sell as much as is slaughtered, but the processing capacity is where we are restricted.
“At this stage, until they can get the processing problem fixed, I don’t think there is much point in finding new markets.”
Mr Patmore said there was a kill space waiting period of “several months” for lambs and a few weeks in WA.
“At the moment, they are not taking any future bookings, and they haven’t taken and future bookings for a couple of months because they are fully booked up for 3-4 months ahead.”
He said new season lambs were hitting the market and it had been estimated that at 1 June, there were 1.4-1.5 million old lambs and sheep on hand, that were not expected to still be on farms.
Prices in saleyards have crashed – at least half to two thirds less than prices last year — due to limited processor competition and direct sales from farms, he said. Poor seasonal conditions in some areas meant many producers were buying feed to keep sheep and lambs alive.
“So we are in a pickle.
“What would help a lot would be if the phaseout of live sheep exports was knocked on the head,” Mr Patmore said.
“It would give producers more confidence to spend some money on their sheep and carry them, but at the moment, producers are trying to bail out of sheep left right and centre, because the confidence has been knocked out of the industry.”
However, one exporter, while recognizing the current killspace, labour availability and skillset constraints on WA abattoir throughputs, said “the more access to airfreight the better” for exports of boxed chilled sheep meat and beef into the Middle East.
“It’s become a very proven mode of moving product very quickly.”
Sheep Central contacted Transport Minister Catherine King, Minister for Agriculture Fisheries and Forestry Murray Watt, WA Premier Roger Cook, Qatar Airways and The Guardian for comment.