8 August 2014
Andrew Norris
Stock Journal
NORTHERN Australia could soon capitalise on a much needed opportunity to diversify its live cattle export markets.
China has 20 per cent of the world’s population, but only 8pc of the arable land, says former chief executive officer of Sanger Australia, Richard Rains, who sees this as a major limitation for the Asian powerhouse to meet its growing protein demand.
“I was there earlier in the year and the abattoirs are struggling absolutely; they’re lucky to be at 30pc of capacity,” he said.
“If I was a gambling man I would say they will look to import slaughter cattle from Australia in the not-too-distant future.
“It will have to happen because they’ve just got to be able to feed their people and they can’t do it with what they’ve got at home.”
China had already begun sourcing large volumes of beef from Australia, which jumped from just below 8000 tonnes (shipped weight) in 2011-12 to 160,440t for 2013-14, according to Meat and Livestock Australia (MLA) figures.
Mr Rains, who was also a guest speaker at last week’s Yulgilbar Station field day at Baryulgil, said China’s emerging taste for Australian beef occurred at a most important time, coinciding with the drought across northern Australia, which “absolutely saved our bacon”.
“If it wasn’t for China we would have been getting much different prices for our meat,” he said.
However, he predicted this was just the start.
With China’s processors operating at 30pc capacity he anticipated demand would emerge to import stock for slaughter to maintain throughput in its processing plants.
“Having just been to China and seen the cattle available in their domestic market, most of the domestic cattle they love are actually bulls so they like a lean product for the majority of the market,” he said.
“The majority of the population who are coming into that middle class who can now afford to eat beef would be more than happy with the type of cattle we’re sending out of northern Australia into Indonesia.”
Before Australia could capitalise, he said a hurdle to overcome was China’s ban on cattle from bluetongue risk areas.
China sees northern Australia as a risk for this disease.
“We have sent breeder beef and dairy cattle out of southern Australia,” he said.
“It might be a year or two down the track before (northern) live cattle make their way to China because the Chinese wheel turns slowly when it comes to such things.”
However, as China had a beef consumption deficit of one million tonnes a year – equivalent to what Australia exports to the world annually – so the demand in China was enormous, Mr Rains said.
This is why, he said, it was critical for northern Australia in particular to prove to China blue tongue was not an issue in our cattle.
“If you draw a line from Perth to Townsville, there is not an export abattoir north of that line (besides the Australian Agricultural Company’s plant that should be operating as soon as next month).
“To date there is an enormous number of cattle north of that line and the transport bill to get them to an abattoir is just enormous.”
Mr Rains said he would be watching the AACo’s abattoir closely to gauge the potential for more export processors in northern Australia.
He said it’s possible there will be the opportunity not just to export live cattle to China, but more processed beef could also find a market there.
“I think all the reasons the other plants in the north have failed have dissipated,” he said.
“They’ve all gone and there’s every reason why the AACo plant should succeed, regardless of the number of cattle that go out live, because as I understand, that Darwin plant will process older cows and those cows probably shouldn’t be going on a boat for live export.”
Courtesy of the Stock Journal