1 Personal communication, Bob Hall Darkan Western Australia. 2 Personal communication, Ross Ainsworth, Australasian Livestock Services, Darwin Northern Territory.
Value of the live export industry Page 24 of 64 5.3 Subsequent adjustments 5.3.1 Sheep In the longer term (after 2 years) producers’ responses to cessation of live sheep exports would be subject to the incentives, risks and costs of: Retaining lambs and sheep with the objective of increasing wool production; Retaining lambs and sheep with the objective of increasing lamb and/or mutton production; Diverting supplies to other less affected markets. For example, Western Australia producers would have the option of transporting lambs/sheep to South Australia and/or eastern States for slaughter; and Ceasing lamb/sheep production and diverting land uses, permanently or on rotation, to other livestock and/or crops. None of these options are necessarily mutually exclusive, and it is likely that individual producers would adopt a combination, depending on the location of their operations and weather conditions. It is beyond the scope of this study to evaluate all these factors. However the following points warrant comment: Wool prices are currently low and the outlook for wool prices is not encouraging; The availability of slaughter capacity in Western Australia is a significant potential limitation to the scope to retain lambs and sheep for slaughter in that State. This limitation is prompted by two factors: actual capacity and labour costs inflated by the demands of a buoyant mining sector. Additional slaughtering capacity to cope with increased sheep and lamb numbers would therefore come at a cost which would be borne primarily by producers; There are always opportunities for land use change. Commodity price cycles, land suitability and location would require detailed consideration prior to any decisions; and As at December 2005, lambs and sheep are being transported from Western Australia to eastern States and, although costly, continuation and extension of this option would appear to be the most likely outcome. 5.3.2 Cattle Northern Australian cattle producers would have fewer options than their sheep counterparts in the event of a sudden cessation of live cattle exports and a subsequent drop in prices. The principal options would be to: Transport finished cattle from Northern Territory and northern Queensland by truck to the slaughter facilities in central and southern Queensland and South Australia; For the Kimberley region trucks would take cattle to the southern agricultural areas of WA; Sell cattle to producers in Queensland where they will be finished and eventually slaughtered; or Construct a new slaughtering facility in the Northern Territory/Kimberley region.
Value of the live export industry Page 25 of 64 The options are not mutually exclusive with individual producers likely to adopt a combination of the first two options. The prospects for the construction of a new slaughtering facility are dependent on the price outlook for both manufacturing and high quality beef.
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