Operating environment
Producers across Australia experienced variable seasonal conditions and the arrival of an El Niño event in 2023, with southern NSW, western Victoria, all of SA and most of southern WA missing out on vital Autumn rain in 2024. This contributed to lower livestock prices with challenging meat trading conditions and higher livestock turn-off.
An increase in livestock numbers and turn-off produced higher lamb, mutton and beef production, but also softer livestock prices. As the flock and herd numbers are forecast to ease over the coming three years, slaughter increases are set to lead to record Australian meat production. The outlook however is positive, with demand set to outstrip supply in some key markets. While carcase weights have eased slightly this year, they are still at relatively historic highs. The slight drop in carcase weight is offset by the bigger jump in slaughter numbers and an increasing proportion of beef production coming from feedlots.
The past financial year has presented our industry with both challenges and opportunities.
The red meat industry has faced labour shortages, particularly in the feedlot and processing sectors as well as on-farm. Feedback and insights have indicated that the Pacific Australia Labour Mobility (PALM) Scheme has been a success for the processing sector, providing greater access to staff and helping meet labour requirements following the increase in lamb slaughter in 2023 (10% or 2 million above the previous record set in 2016).
Widespread local and international cost-of-living pressures have significantly impacted consumption across most foodservice sectors, with the latest Australian Bureau of Statistics data showing a 3% drop in Australian foodservice spending year-on-year. A rise in retail (grocery) channel spend and a shift towards eating at home – with dining out saved for special occasions – has contributed to strong consumer demand for red meat products which embody both quality and value for money.
Looking abroad, keeping our product competitive and diversifying our export markets have fortified our international market access strategy. The entry into force of the Australia-United Kingdom Free Trade Agreement has put our industry in a strong position to further build on a strong and growing export market. We currently export around 70% of our beef, 65% of our lamb, 99% of our mutton and 92% of our goatmeat production.
Closer to home, ongoing industry investment in genetics and better management strategies have led to improved productivity, especially in delivering a more fertile herd and flock along with optimising production through the adoption of R&D.
Our Adoption team has ensured MLA’s research investments have been translated into a wide range of on-farm practical training and awareness raising activities, with producers able to access a multitude of tools, resources and information relevant to their businesses.
MLA will continue to invest in R&D and innovations that reduce emissions, increase soil carbon, and drive productivity to deliver long-term sustainability. MLA’s investments align directly to the CN30 roadmap, which is aligned to the red meat industry strategic plan, Red Meat 2030.
Market report
There is no denying that the past financial year was difficult for the red-meat industry. Livestock producers experienced price falls across all species and all categories of animals by between 30–75%. The sudden and sharp decline in prices ended in September and October of 2023. Encouragingly, since then, livestock prices have increased and returned to long-term averages.
MLA’s beef and lamb marketing campaigns have played a vital role in keeping red meat in the baskets of shoppers, despite the cost-of-living pressures faced by consumers.
The decrease in prices across 2023 was the result of the national herd sitting at a nine-year high, and the national flock being at its largest since 2007. These high national inventory levels resulted in a large supply of processor ready animals. In addition to the supply factors, forecasts of an El Niño in 2023 impacted producer sentiment and reduced the appetite for producers to increase their stock numbers.
Going forward, the herd and flock are expected to enter periods of destocking – with production and slaughter expected to remain high. Record lamb and beef production volumes are expected for 2025, coinciding with a protein deficit in the USA. This will provide a great opportunity for Australian red meat in the global market.
MLA responded to industry’s requests for increased pricing information and data, launching three new indicators.
In November 2023, we launched the Online Young Cattle Indicator (OYCI) and Online Lamb Indicator (OLI). These two indicators were industry firsts and not only provide breed-specific pricing but also give pricing visibility to the rapidly growing online sales channel. More recently at Beef Australia 2024, MLA launched the National Young Cattle Indicator (NYCI) – a new indicator more reflective of Australia’s restocker cattle market.
2024 has reinforced that Australian red meat producers are resilient. As we head into 2025, there are positive signs that the market is improving and there is much to be positive about. In the year ahead all eyes will be on the USA as its rebuild and protein deficit provide global opportunities for all proteins.
Board business
The 2023 Annual General Meeting (AGM) held in November saw both the re-election of Russell Lethbridge to the MLA Board and the welcoming of Lucinda Hogan as a new director. Lucinda takes the place of outgoing director Andrew Michael, to whom I extend my thanks for his six years of service to MLA.
A high priority for the Board is direct engagement with our stakeholders. In addition to the 350 attendees at the MLA Updates and AGM in Bendigo, we also enjoyed meeting with many of you at Beef Australia in Rockhampton. We were grateful for the opportunity to speak to many MLA members during this amazing, week-long event.
We also had the privilege of visiting Mort and Co’s Grassdale feedlot with the Board of the Australian Lot Feeders Association. As with many in our industry, the Grassdale team’s commitment to animal welfare, health and performance, and team management is incredible. It was also a welcome sight to witness sustainability and R&D investments in action.
In May 2024, the Board completed the recruitment process for a new Managing Director following the departure of Jason Strong in December 2023. We are pleased to welcome Michael Crowley to the role while also acknowledging Jason Strong’s significant contribution during his tenure as Managing Director. Michael has hit the ground running and shown a clear vision to guide MLA into the future.
This will be my last MLA report as Chairman and I would like to conclude by saying that it has been an absolute honour to work with the rest of the Board, the management and the broader MLA team on behalf of all levy payers. I’ve been fortunate to have served as a non-executive Director since 2014 and more recently, since 2019, as the Chairman of MLA. The passion and enthusiasm shared by those working in our great industry has made these tasks not only rewarding, but a pleasure.