The COVID-19 pandemic in 2019-21 induced widespread disruptions throughout many trade sectors globally, and Australia’s beef trade was no exception.
Regardless of agriculture being designated as a vital service, beef producers confronted a number of challenges, together with provide chain disruptions, dramatic declines in meals service demand, and rising costs.
A report written by Joshua Aboah and others revealed lately within the CSIRO Journal of Animal Manufacturing Science focusses on the outcomes and impacts of the pandemic on Australia’s beef producers, with a specific emphasis on regional variations, cattle costs, and the general resilience of the provision chain.
The examine used annual information on beef cattle bought, bought, transferred off-farm and transferred onto farms sourced from the database of the Australian Bureau of Agricultural and Useful resource Economics and Sciences, plus MLA database data.
The calendar years between 2014 and 2019 have been regarded for the needs of the examine because the pre-COVID interval, and the COVID interval was 2020 to 2022.
Impacts on beef producers
One of many key findings of the examine was that nationwide beef cattle commerce remained comparatively steady throughout the COVID pandemic.
There have been no important adjustments within the proportion of cattle bought throughout Australia, nevertheless regional variations have been famous. In Tasmania and New South Wales, cattle purchases elevated by 1.4pc and three.6pc, respectively. Western Australia, alternatively, noticed a 3.8pc decline in cattle purchases, notably within the WA Central and Southern Wheat Belt and WA Southwest Coastal areas.
For beef producers, this means that whereas market demand remained sturdy in some areas, others noticed a downturn in buying and selling exercise. Producers in areas with declining purchases needed to adapt to diminished demand, doubtlessly dealing with extra challenges in managing cattle gross sales and motion.
Beef producers skilled a major rise in cattle costs throughout the COVID pandemic. Processor cattle costs elevated throughout totally different weight classes, with mild cattle lower than 200kg seeing an 11.3pc value rise, the 280–330 kg class experiencing a 7.4pc rise, and the 330-400kg class rising by 12.9pc.
These value will increase mirrored larger demand on the processing stage, regardless of disruptions in components of the provision chain.
On the retail stage, beef costs surged by 29pc nationwide. For producers, this was a constructive consequence as they have been capable of command larger costs for his or her cattle.
Nonetheless, the rise in costs additionally mirrored important disruptions downstream, notably in processing and slaughtering actions, which led to produce shortages.
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Processing impacts
One of many main bottlenecks throughout the pandemic was in cattle slaughtering. Whereas farm-level commerce remained steady, a considerable lower in cattle slaughter throughout the nation was recorded. This affected all the provide chain, decreasing the supply of beef and contributing to cost inflation at each the processor and retail ranges, the report mentioned.
Beef producers have been not directly affected by these disruptions. Though they benefited from rising cattle costs, in addition they confronted potential delays in shifting cattle to slaughter, affecting their means to satisfy the upper demand constantly.
The surge in cattle costs was largely pushed by adjustments in shopper behaviour throughout the pandemic. Panic shopping for and elevated demand for purple meat put stress on the provision chain. Moreover, labour shortages at processing crops and abattoirs created additional provide constraints, driving costs upward.
For beef producers, the elevated demand and value surge created alternatives to promote cattle at larger costs. Nonetheless, the labour shortages and processing delays meant that not all producers may absolutely capitalise on the demand spike, with some seemingly dealing with delays in getting their cattle processed.
Regional Variations in Cattle Motion
The Northern Territory, which has the nation’s largest common farm herd measurement, noticed elevated cattle actions and commerce throughout the pandemic. Notably, the NTy didn’t implement lockdown measures, permitting the stream of cattle to proceed comparatively uninterrupted.
In distinction, Victoria, which confronted the longest lockdown, skilled decreases in cattle transfers each onto and off farms. Regardless of these challenges, Victoria’s cattle gross sales and purchases elevated throughout the pandemic, highlighting the area’s capability to adapt to shifting market situations.
For beef producers in areas just like the Northern Territory, the pandemic had much less of an impression on day by day operations, they usually have been capable of proceed buying and selling cattle. In areas with stricter lockdowns, equivalent to Victoria, producers needed to navigate disruptions in cattle actions however have been nonetheless capable of capitalize on elevated gross sales.
One other measure applied throughout the COVID interval was the demarcation of biosecurity bubbles – managed zones designated to forestall the entry and unfold of potential illnesses (on this case COVID). In line with Steele et al. (2021), the implementation of biosecurity bubbles and the facilitation of free motion for animal transport staff ensured the immediate switch of animals to abattoirs.
As well as, the usage of on-line bidding as an alternative choice to saleyard actions by livestock trade representatives and the extension of visas for agricultural staff throughout the COVID interval could have contributed to the normalcy of buying and selling actions.
In response to elevated retail costs, customers’ buying behaviour modified throughout the COVID interval, with studies of meals insecurity and elevated purchases of unhealthy meals (Grieger et al. 2022). Vo et al. (2023) additional highlighted important short-term disruptions in consumption behaviour throughout the COVID interval, adopted by a return to pre-COVID ranges when restrictions have been lifted. When rising shopper demand places stress on provide from the manufacturing sector, the value will increase and triggers a change within the provide patterns. Thus, the demand and value dynamics could have posed a moderating impact on farm-level beef cattle commerce selections, the report mentioned.
The Australian authorities’s containment of the COVID-19 pandemic through the lockdown, border closure, and social distance restrictions resulted within the unintended consequence of labour shortages, which in flip impacted the labour price. The findings of this examine corroborate the reported enhance within the value of lean meat throughout the COVID interval (Lee et al. 2021) resulting from elevated demand. Therefore, the elevated demand was considerably fascinating from the processor and retailer views.
Resilience of the Provide Chain
The resilience of Australia’s beef provide chain was a major consequence of the pandemic. Regardless of preliminary considerations, the meat trade remained largely steady on the farm stage.
Key insurance policies, such because the creation of biosecurity bubbles and the facilitation of transport for animal staff, helped be certain that cattle actions continued, and farm operations have been maintained.
For beef producers, these insurance policies have been important in stopping main disruptions, the report mentioned. The federal government’s assist measures allowed producers to maintain working, albeit with some changes, serving to them navigate the challenges posed by the pandemic.
General, the COVID pandemic had blended outcomes for beef producers in Australia.
Whereas provide chain disruptions created challenges, notably in processing and slaughtering, the surge in cattle costs supplied alternatives for larger revenues.
Regional variations in cattle actions and commerce mirrored the various impacts of restrictions and lockdowns, however total, the trade demonstrated resilience. The pandemic highlighted the significance of insurance policies geared toward sustaining provide chain continuity, which allowed Australia’s beef producers to adapt and thrive regardless of unprecedented international challenges, the report authors mentioned.
Click this link to learn the complete report.
Alastair Rayner is the Common Supervisor of Extension & Operations with Cibo Labs and Principal of RaynerAg. Alastair has over 28 years’ expertise advising beef producers & graziers throughout Australia. He might be contacted right here or by means of his web site www.raynerag.com.au
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