FMD would hit WA’s sheepmeat and wool trades hardest: analyst Matt Dalgleish

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WA’s sheepmeat and wool trades have the most to lose if foot-and-mouth disease reaches Australia, a leading agricultural analyst says, with the two industries — worth more than $1 billion combined — facing a similar economic fallout.

An FMD outbreak would see Australia’s meat, wool, dairy and live export trades grind to a halt overnight, with a nationwide ban slapped on livestock movements for at least 72 hours.

Thomas Elder Markets analyst Matt Dalgleish said sheepmeat and wool were WA’s most lucrative animal export industries, worth about $533 million and $505m a year, respectively.

Live cattle and boxed beef were next at $302m and $251m, followed by live sheep ($88m), dairy ($56m), pork ($46.5m) and goatmeat ($6m).

Despite the potential for enormous economic damage, Mr Dalgleish said the likelihood of FMD spreading to Australia was still “relatively low”, with Federal authorities recently assessing the risk at 11.6 per cent.

And if the disease did reach Australia but was isolated to a single State, he said other States could potentially resume trade relatively soon if they could convince trade partners it was safe.

“All we have to demonstrate, to the satisfaction of our trading partners, is that we’ve isolated it in a particular area,” Mr Dalgleish said.

“For example, if it was isolated to Far North Queensland and we could demonstrate that . . . we could potentially negotiate with our trade partners and say the state of Queensland is a no go, but everywhere else is OK.

“It would depend upon where the outbreak was, how big it was, how well it was contained, and how well we proved that it was just within that area.

“But it wouldn’t be straight away; it would take some time to demonstrate to those trade partners.”

Camera IconThomas Elder Markets analyst Matt Dalgleish. Credit: Adam Poulsen/Countryman/RegionalHUB

For the State in which FMD was detected, Mr Dalgleish estimated it would be at least nine months before trade could resume.

This was assuming it was a “smallish” outbreak that was swiftly tracked and traced within a specific species, to a specific area, and eradicated without the use of vaccination.

“If it was small and we got on top of it through culling, then we’d maintain the status of being FMD-free without vaccination,” Mr Dalgleish explained.

“That’s what we’d try to achieve.

“Part of the reason Brazil don’t export into Japan and South Korea is they’re classified as FMD-free but with vaccination, so those countries won’t take their stuff.

“It’d be the same for us . . . we’d lose those markets, which are massive.”

Nationally, an FMD outbreak would hit the beef sector hardest, with the industry posting export values of $9.2b over the 2020-21 financial year.

National sheepmeat exports — worth about $3.6b a year — would be next, followed by dairy ($2.6b), wool ($2.4b) and live cattle ($1.5b).

A cow infected with foot-and-mouth disease at a cattle farm in Yogyakarta, Indonesia.
Camera IconA cow infected with foot-and-mouth disease at a cattle farm in Yogyakarta, Indonesia. Credit: Ulet Ifansasti/Getty Images

On a State-by-State basis, Queensland’s cattle sector would be hit harder across the board than any other sector in the country.

“The value of the beef export sector in Queensland sits at around $5.3b, while live cattle comes in at around $343m,” Mr Dalgleish said.

“New South Wales has a bit more of a diverse spread of risk, although still heavily weighted towards the boxed red meat trade.

“The (NSW) beef export trade is valued at $1.7b and sheepmeat exports sit at nearly $1.1b.

“Wool and dairy feature prominently, too, at $466m and $254m respectively.”

Victoria’s $2b dairy export industry was most at risk, followed by boxed beef ($1.5b), sheepmeat ($1.4b) and wool ($1.3b).

South Australia’s $522m sheepmeat trade had the most to lose, with boxed beef ($196m) in second.

Mr Dalgleish said Tasmania’s FMD risk profile was dominated by beef and dairy exports, worth $242m and $164m, while the Northern Territory was “almost exclusively a live cattle affair” with $547m at risk.

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