January 6, 2011

 

Australian floods to hamper beef production, exports 

 

 

Extensive flooding in Australia's Queensland will limit the output of the second biggest global beef exporter in the coming months, the director and manager of Corporate and Regulatory Affairs at Swift Australia said Wednesday (Jan 5).

 

Major destinations for Australian beef exports, which account for two-thirds of national beef production, include Japan, the US, South Korea, Russia and many other Asian nations, including China, in an annual trade worth around AUD5 billion (US$4.98 billion).

 

Large areas of Queensland, which accounts for 45% of the country's beef exports, have been inundated in the past several weeks, after a La Nina climate pattern in the Pacific basin delivered the wettest second half on record across Australia, according to the government's Bureau of Meteorology, which predicts more heavy rains in southern areas of the state in coming days.

 

"Queensland is the powerhouse of beef production" in Australia, with 40% of the national herd, so the floods will have a significant impact on the industry and implications for export beef processing, director John Berry said.

 

In Australia, Swift operates 11 meat processing plants and six feedlots along the eastern seaboard, including several plants in Queensland, including one in northern Rockhampton city, which is also known as the beef capital of Australia, population 75,000, much of which is now under water.

 

The rainfall and flooding has caused some stock losses, but the main challenge is limited capacity to muster cattle on properties. With damage to roads – many of which aren't sealed – and bridges, transport of the beasts to slaughterhouses is hindered as is subsequent transport of the processed beef in boxes and containers to the state's export port at Brisbane, he said.

 

The Australian meat processing sector usually shuts down around Christmas for several weeks of plant maintenance and worker holidays, so January is typically is a slow month for beef production and exports from Australia.

 

Swift's Dinmore plant west of Brisbane, Australia's biggest abattoir – with almost 2,300 workers and a processing capacity of 3,400 cattle a day – re-opens tomorrow, but on a one-shift-a-day basis due to the flooding, Berry said.

 

Swift's plant in Rockhampton had been scheduled to resume slaughtering on Jan. 18, but that is now a "day-by-day proposition, given the likely shortages of both workers and cattle. With a large percentage of Central Queensland under water and a large percentage of beef cattle sourced from the area, that means a slow start for the processing sector," he said.

 

Queensland Farmers' Federation Chief Executive Dan Galligan said "the floods are still moving through some of the rivers, and the area of damage is covering an area the size of several European countries."

 

With some areas still bracing for the impact of the floods, it will be weeks before their true cost is known and before farmers can get onto their farms to assess what has occurred, while in many areas, new river heights have been set, so farmers are worried about what they might find, he said.