China live cattle trade gathers momentum
Northern shipment arrives in China after ten-day voyage
THE first shipment of live northern Australian slaughter cattle to China has arrived in Zhejiang province after a successful ten-day voyage from Townsville.
The consignment of 1600 crossbred cattle, put together by the North Australian Cattle Company (NACC) on the Bison Express, has been labelled a significant step forward for the live trade business which is facing some big challenges in traditional markets.
The doors to the China live feeder and slaughter market opened with the striking of export agreements in 2015 alongside the Australia-China Free Trade Agreement.
NACC’s managing director Patrick Underwood said there was increasing demand for Australian cattle in China but the industry was a new one and so importers were starting cautiously.
“Live cattle from Australia are a very expensive proposition so the final product will be required to fetch a premium,” he said.
“This means that very good care must be taken of the animal through the shipping, feedlot and processing stages and of course the cold chain management and distribution.”
Much of this first shipment of northern cattle, which included Santa Gertrudis, Droughtmaster and Brangus, had been pre-sold in gift packs for Chinese New Year.
The Chinese importer supplies meat into the retail sector as well as the local meat markets in Shanghai and this was their first shipment of Australian cattle.
NACC has been at the forefront of the China live slaughter trade, sending southern-sourced mainly Angus cattle out of Portland early last year.
Additional conditions on the export of cattle sourced from Australia’s bluetongue zone in the north made this initial shipment from Townsville quite a breakthrough.
While there was a freight saving shipping from the north, the actual delivered price was comprised of a number of factors, Mr Underwood said.
“For example, shipping fodder is significantly cheaper in southern Australia, as is hay, so quarantine costs are higher in northern Australia,” he said.
“Also, there are different factors that affect cattle prices in northern and southern Australia, often weather related.
“We had a reasonably short time frame but the Elders network did an amazing job to source cattle to our specifications.”
Mr Underwood said it was very important to have tag details for every single animal in the consignment 100 per cent correct.
“This sounds easy, given NLIS (National Livestock Identification System) but the paperwork that sits behind each animal must be absolutely complete.”
The forging of this new market has been heralded a major boost for both the live trade sector and Australian beef overall, adding extra buying competition for cattle and creating the sort of diversification needed for long term sustainability.
After the high volumes of live cattle shipped that flowed from Australia’s big drought-induced sell-off earlier this decade, 2018 is forecast to follow last year’s declines.
The effects of tight domestic supply, high cattle prices and uncertainty around import policies would continue to be felt, according to the latest cattle industry projections from key industry body Meat and Livestock Australia, released this week.
Total live cattle exports for 2017 were back 22 per cent to just under 855,000 head and industry leaders say this is likely the “new normal”.
Some minor increases could be on the cards this year and next, depending largely on how policies in customer countries played out, but it was unlikely we’d see those highs reached again for a long time, they said.
Indonesia remains Australia’s biggest market, taking 60pc of our live cattle trade, while Vietnam sits in second place at 19pc, according to MLA figures.
Shipments to Indonesia of feeder and slaughter cattle were last year back 16pc from the previous year.
The prospects here are still rocky, with the Indonesian Government’s recent 5:1 breeder rule in play, live trade operators said.