Live Export of Cattle Industry in Australia-Samples for Students

Question: Write a Business report on the live export of cattle industry in Australia. Answer: Introduction The following report is based on the live export of cattle in Australia. Australia was the largest exporter of beef in the year 2015. However a severe draught in the country ion the following year drastically reduced its beef production and naturally resulted in the fall of exports. The production of beef in the island continent is now divided into two different seasons where the first period experiences a massive expansion of the stocks of animals whereas the other period experiences just the opposite picture. Target Market The Australian cattle production is one of the largest in the world and the country exports beef and cattle to a number of different countries of the world. Indonesia is the largest importer of Australian cattle which accounts to more than 50% of the total export. Vietnam and China are the other largest importers with Vietnams share lying to more than 20% and China approximate 5%. Other country that imports cattle from Australia includes Malaysia, Israel, Philippines, Russia and many other Asian countries (Ryan, 2017). Sources of Market Intelligence The beef market of the world is an extensive one as beef is consumed by almost all the countries in the world. Australia was the leading beef exporter in the world in the year 2015 but as mentioned earlier the severe draught in the successive year led to a sharp decline in the amount of exports (Wiedemann et al. 2015). The fall in the production in Australia was taken as an advantage by other countries and Brazil and India overtook the island continent in the year 2016 to be the first and the second largest producers and exporters of beef across the world. A recent survey in Australia has shown that domestic consumption accounts for only one third of the beef production and the rest two thirds accounts for exports. The USA is the largest buyer of the high quality Australian beef in the year 2015 (Kahn Cottle, 2014). Apart from this Indonesia forms the largest part of exports in Asia and new countries like Japan, Korea and China have also emerged into the scene. Networking Opportunities Networking opportunities for the production of cattle and beef is organized by the cattle and beef exporter groups. Some of the networking opportunities include; Different Industry awareness events that includes the likes of the field days, paddock walks or an annual stage conference Training and mentoring programs for proper networking Online portal development for cattle Regulatory commission for keeping a strict vigil on the industry Statistics As mentioned earlier the mentioned country was the largest exporter of cattle and beef in the year 2015-16 but drastic change in the environmental conditions made it tough for them to hold their positions. In the year 2014 the country exported around 1,294,036 cattle head along with beef and earned a sum total of more than a$1290 billion. Indonesia was the largest importer of Australian cattle followed by Vietnam, Japan, South Korea and China. The cattle and beef are generally exported from Darwin port and Townsville ports (Kahn Cottle, 2014). Main Trade Fairs on Cattle Some of the main cattle trade fairs and cattle display fairs are namely; China cattle conference held on a yearly basis. ABARES Outlook 2017 conference Collaboration and Analysis of current markets Market Growth Rate Thought the domestic as well as the international market for beef and cattle production and export has been increasing gradually because of the rise in the population, the production of Australia has fallen drastically (Ryan, 2017). This has happened due to the severe draught that occurred just after the 2015-16 session.. The result of the draught was severe due to the uncertainty of the rainfall and many other different factors. The uneven distribution of rainfall has been shown below. Figure 1-: Graph showing uneven distribution of Rainfall in Australia. Source- (Higgins et al. 2015) Market Profitability As mentioned earlier the slaughtering as well as the companies involved in exporting beef and cattle to other countries of the world earn huge amount of revenue from such transactions. The rise in the demand for beef and cattle has acted as a catalyst for the profitability of the organizations (Higgins et al. 2015). New Regulatory Requirements There is a constant debate that goes on over the humanity of the Australian live exports and the adequacy of the industrys regulations by the organization. The decision of the Australian Government to totally stop the live export of the cattle to Indonesia emphasized the concern for the island continent. According to, Wiedemann et al., (2015) the Government was confused over the fact on whether to totally ban the live exports industry or to step up the vigil on the animal welfare standards. The federal government of Australia introduced two bills in the parliament in order to limit or totally ban the aforesaid industry. This act was later made into legislation in the view of imposing stricter rules and regulations in the industry. Economics of the Australian Live Export Industry Australia has the largest amount of live exports in the world. In the year 2003 it accounted for about ten percent of the total exports in the global market. The island continent is the largest supplier of sheep and sheep meat to the Middle East as accounting to almost 95% of the imports of the Middle East countries. The large size and the enormous trade involved in the export of the particular industry clearly indicate the employment to a large number of different people. Reports suggest that more than 13,000 jobs are concentrated just only in the Northern Territory of Australia. This figure suggests that the industry employs a large number of populations either directly or indirectly. Distribution Channels The distribution channels of the Australian Cattle and Beef has been shown in the table below; Figure 2-: Distribution Channels of Beef and Cattle in Australia Source-(Wiedemann et al. 2015) Key Success Factors The quality of the livestock along with the slaughtering cattle is much high compared to that of the other countries (Perren, 2017). The enormous size of 28 million herds is more than enough to make the country the undisputed leaders in the world of cattle and beef. Quality is the largest determinant ion case of the huge popularity of Australian cattle. Trends and Developments and their Impacts The livestock supply in the world is expected to rise with the rise in the population. Indonesia is believed to be withholding the largest importers for livestock (Higgins et al. 2016). Australia will remain the largest country that will be regaining its position as the largest distributor of cattle and beef. The large scale decline in the supply of meat has made it difficult for Indonesia to maintain its imports but it will not affect the country from staying robust in the beef and cattle imports. Legal, Ethical and Environmental Constraints Trade barriers like different taxes of the host countries and other different regulations may lead to the fall in the export size of the Australian meat and livestock. The dishonest approaches by many exporters or the importers can also lead to decline in the industry (Wiedemann et al. 2015). On the other hand environmental constraints involve the situations like draughts which has disturbed the production of the industry. Some of the key facts about the beef and cattle industry of Australia are as follows; Herd Size of cattle in Australia- 28 million head The percentage of cattle exported to other countries- 60% Beef Exports accounts to around $5 billion Live Exports of around $600 million Producers 40,000 Figure 2: World and Australian Livestock Exports Source: (Wiedemann et al. 2015) Australian Beef Production The availability of a large area of green and abundant pastures across the length and breadth of the island continent makes it possible for the business persons to produce beef in the green pastures only. However most of the beef and veal produced from the cattle are done mainly to satisfy the needs of other Asian countries where beef is in huge demand, especially the countries like Indonesia, Malaysia and other similar countries. The main competitive advantage of Australia is the availability of a vast area of green pastures that ensures the production of more amount of meat in the country (Perren, 2017). New Target Market Apart from the traditional markets of Asia the Australian meat and cattle exporters must also consider other new markets that have the potential to outclass the old markets. This includes the likes of the Middle East Countries and North African market. These markets have a huge demand for sheep and cattle. In the Middle East, Saudi Arabia stands out to be a strong market as the industry present there is not keen to reopen themselves as they were closed due to some regulatory concerns in the system. A number of reports that were formulated shown that the Saudi Arabian market has a huge potential to be one of the topmost destinations of cattle exports by Australia. The Saudi Arabians import around 8 million live stocks among sheep, goats and camels (Ryan, 2017). But North Africa provides a much greater opportunity as the meat consumed in these parts of Africa has lacked quality and has been the reasons for a number of different diseases in the country. SWOT Analysis The SWOT Analysis of the Australian Cattle and beef industry will provide the readers with a clear insight into the current and future trends of the following industry. The main focus will be on the strength and weaknesses of the industry in the present situation. The strengths and weaknesses of the industry are as follows; STRENGTHS WEAKNESSESSS Clean and Greener product Availability of lush green pastures across the country Major exporter of the world Volatile competitive markets around the world Concentration of the processing capacity Variation in the climate OPPORTUNITIES THREATS Managing the risk involved in the production Increased demand from Asian as well as contemporary markets Scientific methods of production Increase in the growth of the other countries with more scientific production Risk of cattle diseases Abrupt changes in the climate Self sustainability of potential importers Other Environmental Issues The environmental issues are one of the major concerns that need to be addressed by the firms producing the cattle and the beef. The draught situation in Australia during the recent times led to the increase in the number of cattle that were not fit for any use. Culls amounted to around 9.9 million in the year 2014 which was a serious issue and led to the decrease in the number of exports by Australia (Moore et al. 2015). Trade Barriers The broader protection barriers include the likes of the rise in the quotas, increase in the tariffs and taxes to protect the domestic market (Wiedemann et al. 2015). This also include different food and safety legislation and standards as well as national standards and safety procedures elaborated in the national bodies that may have a huge impact on the livestock export market of the globe. Legal, Ethical and environmental constraints The Australian cattle and Beef Exporters must comply with all the different rules and regulations of the country as well as the country of export to ensure a smooth business. They must also implement the best possible methods to negotiate with the business of different traditions and different cultures (Moore et al. 2015). Cultural differences must be well addressed so that the business does not face any complexity in the long run. Analysis of International Market Trademarks, Patents and Standards Accreditation Trademarks and patents are one of the main security measures that must be taken by the organizations while exporting beef to foreign countries. The trade marking of the business and obtaining the patent of the business helps it to be secured from other business houses carrying out the same business. Trade marking in business ventures helps in the formation of a brand that helps to establish the brand in a much organized way. Cooperative Ventures The cooperative business ventures help the organization to provide the people with beef and cattle at very low prices ensuring the highest quality of the items. According to, (Wiedemann et al. 2015) these ventures help both the business to fluctuate as well as help quality meat to be available at a low price. Strategic Alliances Strategic alliance with a foreign firm in the host country will help to gain a strategic foot hold in the market of the host country. Strategic Alliance is followed by most of the retailers and the exporters in overseas countries to flourish their trade. According to, (Kahn Cottle, 2014) strategic alliance has to be completed by the companies in accordance with the different form of rules and regulations of the host country. Recommendation of 3 forecasting Techniques The industry must plan a new way to get out of the crisis and can possibly breed new animals or think of importing some other slaughtering breeds from other countries The industry should focus on China as the new destination as the demand for meat has been rising gradually in the country A robust and experienced beef producing and slaughtering agreement must be in place to avoid any future shortages Proper breeding techniques Scientific and well maintained techniques of keeping the cattle healthy Conclusion The export market for the Australian beef industry has always been very lucrative in nature and thus it has been the very best in the industry. The recent fall in production due to an ongoing draught has been quite problematic for the industry and thus the government needs to implement a number of strategies to counter the threats posed by outside sources. The industry should now focus on some emerging new markets to double their profits. The main focus country of the industry can be China as it has increased its imports from Australia since some year due to the rise in the demand of beef and livestock. However Australia must maintain its production capacity and standards to meet the demands of the industry. References Higgins, A. J., McFallan, S., Laredo, L. A., Prestwidge, D. (2016). Cost of transport infrastructure and regulatory constraints in Australian cattle supply chains. Final Report to MLA. Higgins, A., McFallan, S., Laredo, L., Prestwidge, D., Stone, P. (2015). TRANSITA model for simulating infrastructure and policy interventions in agriculture logistics: application to the northern Australia beef industry.Computers and Electronics in Agriculture,114, 32-42. Kahn, L., Cottle, D. (Eds.). (2014).Beef cattle production and trade. Csiro Publishing. Moore, S. J., Madin, B., Norman, G., Perkins, N. R. (2015). Risk factors for mortality in cattle during live export from Australia by sea.Australian veterinary journal,93(10), 339-348. Perren, R. (2017).Taste, trade and technology: the development of the international meat industry since 1840. Routledge. Rees, C., Mullumby, J. (2017). Trends in Australian meat consumption.Agricultural Commodities,7(3), 82. Ryan, E. (2017). A Tale of Three Cities: A Comparative Analysis of Newspaper Coverage of the 2011 Live Cattle Export Suspension.GEOView: Online Undergraduate Review of Geography and Environmental Studies. Wiedemann, S. G., Yan, M. J., Murphy, C. M. (2016). Resource use and environmental impacts from Australian export lamb production: a life cycle assessment.Animal Production Science,56(7), 1070-1080. Wiedemann, S., McGahan, E., Murphy, C., Yan, M. J., Henry, B., Thoma, G., Ledgard, S. (2015). Environmental impacts and resource use of Australian beef and lamb exported to the USA determined using life cycle assessment.Journal of Cleaner Production,94, 67-75.