In the face of biosecurity risks and logistical challenges, Australia's red meat processors enhanced their reputation for quality and supply reliability, nationally and globally, during the Covid pandemic, according to an AMPC-funded report from BIS Oxford Economics.
Impact of Covid-19 on the red meat processing industry, published in March, made a number of findings that indicate a strong and resilient sector. The report found that while the broader industry took an estimated 3% hit to national revenue during the most severe period of Covid impact (April to September 2020), processors performed well. On the ground, they demonstrated skill and flexibility in managing logistical and workforce disruptions to maintain supplies to domestic and international markets.
Australia’s competitive edge
With an early hard lockdown, New Zealand's meat processing industry's performance remained steady. However, major international competitors such as the United States and Argentina struggled to manage pandemic-related disruptions to supply, significantly impacting export quality, quantity and revenue.
Restocking was a problem shared by all countries, including Australia. Still, our competitors faced more significant challenges to supply due to longer lockdowns, workforce instability, and reduced international trade as buyers became concerned about hygiene standards.
Managing domestic supply in many cases proved to be just as tricky. The BIS report noted that, "…at one point, the Wendy's food chain in the US, which prides itself on using American beef, ran out of beef in nearly 20% of its stores due to the pandemic's impacts on red meat supplies."
Australia’s post-Covid export opportunity
Our international competitors' challenges highlight the potential for Australia to focus on more actively promoting its strengths in the global market. The growth opportunity lies in diversifying export opportunities to capitalise on the reputation we've developed as a safe and reliable supplier of quality red meat products.
In 2019, China accounted for 28.5% of Australia's red meat exports. Since then, both Covid and trade tensions have impacted that market. The processor sector recognises the potential for capitalising on its performance during the pandemic to explore opportunities for expansion into markets in India and South-East Asia. It may also be possible to take advantage of recent changes to demand in the post-Brexit UK and the EU.
Safety, biosecurity and managing risk
The Australian sector achieved remarkable success in maintaining its operations in domestic and export supply in the face of pandemic challenges.
Acting quickly to establish appropriate health and safety measures across the industry and working with related sectors to minimise biosecurity risks while addressing the workforce challenges was no small ask.
As a result, the industry has established itself internationally as a reliable supplier of safe, quality products, even under the most challenging circumstances. The opportunities are significant. However, more work is necessary to establish practices and relationships to ensure that the industry remains prepared to handle any future challenges.
The key to ongoing success in each area is a collaborative relationship across the industry and strong communication between industry and government.
