People on the ground the key in Vietnam live cattle trade game

Austrex chief operating officer James Leftwich at the Australian Lot Feeders Association BeefEx conference in Queensland last week.
Austrex chief operating officer James Leftwich at the Australian Lot Feeders Association BeefEx conference in Queensland last week.

HAVING people on the ground and understanding the culture we are operating in will be key to Australia’s ability to tap into the potential of Vietnam’s fast-growing feedlot industry, according to one of our leading live cattle exporters.

Australian Rural Exports, or Austrex, is a pioneer of the live trade business and exports 260,000 head per year, the majority feeder cattle, to all the major markets Australia has access to plus around 60,000 dairy breeders, mostly to China.

Chief operating officer James Leftwich spoke about the opportunities for partnering feedlot operations in Vietnam at this year’s Australian Lot Feeders Association BeefEx conference.

Vietnam’s low cost of grain coupled with high demand for the product was fuelling the big growth in feedlotting, and the huge increase in the past three years of live cattle shipped from Australia, he said.

“In those years, bamboo and rope facilities have been transformed by enormous investment in steel and concrete,” Mr Leftwich said.

“The ability of the Vietnamese to build quickly is unsurpassed - feedlot sheds go up in four weeks.”

While Australia’s customers in Vietnam will have more and more alternatives out of South America in coming years, given the forecast big lifts in cattle production in that region, we have significant advantages and it’s not just in freight, according to Mr Leftwich.

“We have a good understanding of our neighbour’s culture and political systems where South America is largely disconnected,” he said.

That understanding needed to be fostered, particularly in relation to the challenges of implementing ESCAS (Exporter Supply Chain Accreditation System) in Vietnam and tackling highly publicised animal welfare issues.

Mr Leftwich said Vietnam had far more shining lights in this space that had gone unreported.

“The one percent of rogue operators who get the air time are not representative of the mainstream trade,” he said.  

Traditional ideas around livestock production were strong but where science was indicating better ways of doing things, having staff on the ground was vital to facilitating change, Mr Leftwich said.

One of the biggest challenges with ESCAS was feedlotters not wanting to nominate where they would sell to, he said.

“They obviously want to maintain all options for selling,” he said.

“Going in with an iron fist won’t work. Instead, we need people involved in their businesses, working alongside our customers in animal handling, livestock selection, nutrition -  really involved in this emerging industry.”

Livestock exporters had to go above and beyond in that regard, he said.

Austrex has ten people in Vietnam and has also opted to make additional investments in areas such as the supply of abattoir packs which include penetrative bolts, scanners and mobile phones.

CCTV was also installed to allow the company to determine where additional training was needed as well meet regulatory obligations.

In Vietnam, and many of Australia’s live trade markets, the feedlot sector was being challenged by a multitude of factors alongside animal welfare issues, Mr Leftwich said.

These include strong competition and supply from other proteins, beef from other origins, managing disease risks and capacity building.

He sees the three key changes to how live trade exporters operate being media attention and social input into animal welfare, the growing population in Asia and exposure to the likes of currency fluctuations and government policies.

The way Austrex manages that risk is by operating in many markets and knowing its customers well.