Transcript

3 Baron-Hay Court, South Perth Western Australia 6151Telephone: +61 (0)8 9368 3333 Fax: +61 (0)8 9474 2405Email: enquiries@dpird.wa.gov.au

In the audio are:

Alice Ritchie, Red Meat Value Chain Officer, Agriculture Victoria

Kate Pritchett, Research Officer, Department of Primary Industries and Regional Development

Dale Miles, Supply Chain Manager, V & V Walsh

Transcript

Alice:My name is Alice Ritchie; I'm a red meat value chain development officer with Agriculture Victoria.

Kate: My name is Kate Pritchett; I am an industry analyst for the livestock industries with the Department of Primary Industries and Regional Development in WA.

Dale:I'm Dale Miles; I’m the supply chain manager with V&V Walsh meat processors and exporters, based in Bunbury.

Alice:Hi Kate, being a visitor from Victoria I was wondering if you could tell me a little bit about some of the recent trends or recent figures coming out from the WA sheep industry.

Kate: Well luckily we've just had the ABS released their preliminary estimates for 2016/17, they put their WA sheep flock at about thirteen point seven million, so it is a slight decline on last year, which was thirteen point nine but it has been holding reasonably steady for about five years or so now so we're hoping that continues or grows if possible.

Alice: Okay fair enough, and so those numbers they're saying are a little bit lower than I suppose in previous years?

Kate: Yeah well there has been a big decline over the last twenty five odd years. Back in nineteen ninety we were at thirty eight million so it has been quite a big decline but then at the same time the WA flock has completely changed structure along the way so it is still quite a very viable industry, it's not as dire as what it sounds, but there has been a decline.

Alice: Fair enough, and so Dale I suppose within the meat processing sector in WA are you seeing a similar decrease in numbers?

Dale:We are, we're finding that supply during certain times of the year is becoming a challenge for us and we're having to adapt our business around that and we certainly have a close look at the numbers coming out of the department, particularly given the dwindling flock numbers in WA so we pay particular attention on stock movements into other exporting markets, live export, looking at seasonal influences and what the potential rebuild capacity of the flock numbers you know could potentially be in the near future for WA.

Alice: Yeah I think that's definitely an issue that's affecting the rest of Australia as well so you're not alone in that space. I am quite interested in the live export side of things because being from the East Coast that's not something we do so much of. What can you tell me about live export, how's it going?

Kate: Well it's pretty big in WA and we make up almost 90 percent of the country’s live exports, and they go out of Fremantle. The numbers have declined but they have been steady-ish, they're probably about thirty percent of our total turnoff. They do still make really quite a big contribution economically though the value of live exports is up around two hundred million dollars per year so it is still quite remarkable, it's more than mutton and almost as much as lamb so it is still a big industry despite the fact that it has declined a little bit.

Alice: Absolutely, and so I suppose looking into the future with hopefully a bit of a rebuild phase coming up across the whole state is that going to impact things into the future do we think is it going to cause issues for the processing industry as people maybe hold back their ewe lambs or maybe try and build up their flocks a bit more on farm?

Dale: I don't think it'll pose any issues, if anything it's going to be, you know, a positive, you know we would only hope that given the current red meat prices and commodity prices that there's an incentive out there for producers to grow numbers and I think the processing sector can quite adequately I suppose maintain operational levels that we are at the moment whilst that rebuild takes place. Our message is very loud and clear to producers - we've got expanding export markets, our businesses underpinned by very strong domestic markets and whilst red meat and wool prices are where they are - it's an opportune time for producers to look at diversified, you know, on-farm production between livestock and cropping.

Alice: Yep so it's really sheep is back in the game in Western Australia in that sense.

Kate: I would say so, yeah. Lots of exciting things are here, 50% of livestock comes out of sheep, so it’s where the value is.

Alice: Yeah absolutely, you mentioned some seasonal conditions before. Do the Department in Western Australia really keep track on what those seasonal forecasts are and try and provide information around that to producers into industry?

Kate: Around weather and climate?

Alice: I suppose weather and climate and how that might impact on businesses.

Kate: Yeah they do keep a fairly strong eye on that. I'm not sure if you're aware but last year we had a fairly dry season so they ran a lot of seminars and stuff to try and stay ahead of it and to help producers plan for it and all that sort of stuff, so it does play a fairly big part.

Alice: Yeah absolutely, well I've definitely heard about last year's awful spring, so I suppose based a link to that are there any really clear sort of problems or challenges that need to be faced by the Western Australian industry in the next 12 months, two years whatever it is?

Kate: I would say trying to maybe balance our turnoff and our marking rates a little bit more. At the moment we're still turning off slightly more than what we're marking each year, which is why the flock has been coming down slowly. And things like trying to stem maybe the flow of stock East because we have been losing over the last two years quite a lot kind of thing transferred to the Eastern states.

Alice: Those horrible Eastern states! Dale, can you think of a key issue or something, a challenge to be overcome in in the next couple of years?

Dale: I suppose whilst that flock rebuild is taking place, a key impact for us as a processor who is in the market 52 weeks of the year is trying to manage the supply across the year, across 12 months of the year so we've been doing a lot of work looking at strategically trying to manage supply and have a more even supply across the 12 months particularly looking at store lamb procurement and looking at longer term supply options with contracted feedlotters, and in that way I think we were able to at least look at some easing of supply pressure using strategically feed lots across the region and particularly during those summer and autumn months when off- farm supplies are at a low point and I think also some of the work that the department have been undertaking, looking at out of season supply options for producers and how that impacts their business and what options they may look at for out of season lamb supplies, and the department has been doing a fair bit of work in that space too.

Alice: Yeah fantastic, I suppose I've just got one more question for both of you - is there anything that's really exciting or something you're really looking forward to as part of the sheep industry in WA at the moment?

Dale: Yeah I think for me, you know from a processing perspective I think it's encouraging to see the number of young people getting back into livestock production and in the same vein also some of the older generation looking at adapting technology and innovation on farm and how that's driving management decisions at a processing level. V&V Walsh continue to open up export and grow our export markets and we are able to do so because we're underpinned by a very strong domestic markets so the I think that the near horizon for sheep produces in WA bodes well. The strength of commodity prices is strong and I think I think that translated through to at production level. I think there's a resurgence in in the uptake of sheep producers.

Alice: Yeah it's very exciting. Kate, from your perspective?

Kate:Event wise, I think the Katanning Research Facility field day will be really good; it will be showcasing all the new and up-and-coming research going on in the industry.

Alice: Just put that in my calendar!

Kate:You should come back for that one! But I also think it's quite an exciting time to be in sheep, there's really, you know, the confidence levels and the enthusiasm in the industry is quite high based on the strong prices that people are receiving from both sheep meat and wool and I think if people capitalise on that it'll be a really good year for the industry, the seasonal conditions holding up.

Alice: Fingers and toes crossed.

Kate:Exactly, but yes even talking to some of the older producers that can be quite negative sometimes, even they've said that comparing that what they were doing in the 80s now they're cutting even or doing better than what they wear at that time, even taking into account the cost of inflation and things like that so I think it is a really exciting time at the moment.

Alice:Yeah that's fantastic I have certainly heard over the course of my short trip in Western Australia as part of the Sheep Industry Business Innovation program that producers and the whole industry are pretty excited to be where they are right now. It's a very good spot to be in. That's all, thank you.

Kate:Thank you.

Dale:Thanks.

End of transcript