Air freight pipelines kept open a saviour for beef exporters

Air freight pipelines kept open a saviour for beef exporters

Beef
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Freight assistance mechanism extended until September

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AUSTRALIA'S beef exporters are poised to be in a strong position coming out of COVID-19, having maintained a presence in many valuable global markets thanks to air freight pipelines staying open.

Key to that has been cargo-only freighters flying into Australia, made possible by the Federal Government's International Freight Assistance Mechanism, which has just been extended until the end of September.

It's a move welcomed with open arms by farming leaders, particularly those in the high end and chilled red meat export game.

Since its inception in March last year at the height of coronavirus panic, meat exports via the mechanism, known as IFAM, have included 40,000 tonnes of sheep meat, 27,000 tonnes of beef, 9,000 tonnes of pork, with 340,000 tonnes total volume of produce valued at $4.9 billion.

Queensland-based Stockyard Beef, which has a stable of some of the country's most awarded beef brands that go to 20 different countries, says without freighters servicing Australian ports, the challenge would have been too great for many red meat exporters.

"The IFAM program, and its extension, is providing enormous benefits on several levels," Stockyard's Lachie Hart explained.

"It has enabled exorbitantly expensive freight costs to come down to a level that is at least sustainable for the exporter.

"When the world went into lockdown, our freight costs immediately jumped 800 per cent.

"Secondly, it has also enabled the airfreight sector to be viable. Had exporters been forced to pull out, carriers would no longer have flown into Australian airports at all.

"And once we get past COVID, it would likely have taken enormous lengths of time before those carriers would return."

As it stands, many agricultural sectors are now poised to capitalise quickly once backsides return to plane seats in more meaningful numbers, thus subsidising the cost of cargo underneath.

Stockyard Beef's Lachie Hart.

Stockyard Beef's Lachie Hart.

Peak red meat processor group the Australian Meat Industry Council said the extension of the IFAM, announced by the Morrison Government on Friday, provided the whole Australian red meat supply chain, including exporters, processors, lot feeders and farmers with a 'shot in the arm' at a critical time for the industry whilst it faces a range of key issues including worker shortages, a slow start to exports for 2021 and lack of livestock supply.

"The extension of IFAM provides ongoing recognition of the importance of airfreight supply chains in delivering highly valuable, and perishable, protein to international markets," chief executive officer Patrick Hutchinson said.

The National Farmers' Federation said the extension was nothing short of a critical life-line for ag commodities heavily reliant on international airfreight to get to market.

Sectors such as seafood, high-value horticulture and chilled meat were primarily reliant on air freight and the extension provided breathing space, chief executive officer Tony Mahar said.

Evolving

Mr Hart said sea freight was out of the question for many of Stockyard's important markets, including high-value cuts into Europe, the Middle East and the United States.

"In Middle Eastern markets, for example, product has a 70-day shelf life and 50 days would be taken up on the sea, which simply puts too much risk and pressure on distributors," he said.

"It is still a daily challenge for our logistics teams to find space and there is a lot of competition for what is available not just within the chilled meat sector but with other commodities.

"However, without the mechanism that challenge would have been far too great."

Mr Hart said demand for high quality Australian beef had not dampened but there had been massive disruptions.

"Food service is always very quickly impacted with any lockdown," he said.

"Last March, in the space of ten days, all our food services markets globally shut down. We had to very quickly find a new home for about 15 to 20pc of our carcase."

Stockyard set up online channels and moved product into retail.

Today, those channels are going from strength to strength and as restaurants and the food service trade comes back, Stockyard has a far stronger, more diverse and more resilient market portfolio.

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The story Air freight pipelines kept open a saviour for beef exporters first appeared on Farm Online.

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