RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
Senator «MILNE» -Thank you. Actually I wanted to follow on from the point that Senator Heffernan was making, but in a different context. There are two things in relation to beef and sheep production. The first is the ongoing impacts of climate change as we see it now. Previously you could run animals on large tracks of land but you will not be able to because of the changes in climate, rainfall et cetera. Notwithstanding changed agricultural practices and so on, the reality seems to be that that is the way it is going to go in large areas. Secondly, there is now a very strong cultural belief that one way to reduce your greenhouse gas emissions as an individual is to eat one less meal of red meat every week. So you are up against what is now a global trend for people to eat less red meat.
Given that that is the case, what work are you doing to try and look at ways in which you can increase the value to the producer or send it up to a niche market so that you get a return notwithstanding less volume but higher prices? For people who continue to eat meat and choose to do so, they will pay more in the same way as they do with a range of other commodities that used to be bulk commodities that have now gone in to high-niche commodities.
Mr Palmer -I will have a crack at that. For the first part, Senator, and a couple of your assertions, there are no plans that I am aware of for the industry to retract from its current positions. Some 43 per cent of the Australian agricultural land mass run cattle. The Australian cattle industry at the moment requires about 330-odd million hectares of land to conduct itself and the industry has no plans to retreat from those numbers. We are a very significant player on the export and domestic market and we have earned that position, and we are not going to relinquish it any time soon. Secondly, you made a comment about one less meal a week. I am aware of a group, Senator, I think that you are a part of-
Senator «MILNE» -No, I am not, actually.
Mr Palmer -Sorry, the media has you as part of it.
Mr Palmer-We continue to promote along government guidelines that a red meat meal three to four times a week is required for a nutritionally balanced diet. We continue to promote those findings and we work in step with government in those dietary guidelines. In terms of improving the quality of the product, over the last decade the industry has invested significantly in various grading programs, one being Meat Standards Australia. We are on track this year to grade over a million cattle in any one year for the domestic and, now, the international market.
MSA has had some tremendous results in improving quality. Farmers now know fully that they are a part of the food industry and what they do on farm has an absolute and direct bearing on how well that animal eats subsequently. So on-farm production tools and meat grading in plants are important. We have a group called the Red Meat Networking Club, which is about 1,600 butchers throughout Australia, all of whom have got on to the program and are doing secondary cuts, new products, new ranges, new value adding, as you say, trying to lift the value and lift the offer in both the domestic and the international marketplace. So there is plenty being done.
But just to go back to the very first point, we are acutely aware of this whole competition for land and resources and for the Australian beef industry and, for that matter, the Australian sheep industry, to continue to be a world-renowned exporting country. Combined, we produce over six billion meals a year and that is the business we are in, and we need the sort of acreages that I talked about. We do not have any plans to retract or retreat.
Senator «MILNE» -That is the point that I want to make, though. It is not that you would be planning to retreat, but the climate is changing. The rainfall is changing. There are areas where you would previously have run beef cattle which will no longer be suitable for running beef cattle. They may be able to still run some, but it will not be near the stocking rates that have previously been the case. So there will have to be a shift in where that occurs or a change in agricultural practices. It is not about a proactive decision to retreat; it is about adaptive management to climate realities.
Mr Palmer-The herd is shifting. Let us just take cattle for a moment. The herd has shifted. In the last four or five years, something in excess of two million cattle have moved from the south to the north. So that is a function. The sheep industry has changed dramatically. A decade or 15 years ago, there might have been 150 or 160 million sheep, today there is less than 80 million, yet we are producing record tonnage of lamb. We have a meat-sheep business that has evolved through market forces, and climate change may have had something to do with that.
But certainly in beef production the cattle herd, in some part-two or three million head-have shifted from the south to the north. That is probably, we think, in response to two aspects. One is drought in the south and more predictable seasons of late in the north, and cost of production in the north gives them the better genetics; the grading program I talked about before; the complementarities with feedlots et cetera. The north now presents a very nice nursery for breeding and raising young cattle to be turned off on Central Australia or southern feed yards. So it is a cost of production story.