Australia set to beef up meat exports to China

Changing appetites and growing wealth across Asia have led to a booming demand for Australia's high-quality beef, prompting farmers to try and cash in. In the past three years, Australian cattle prices have doubled to A$6 per kg.
Changing appetites and growing wealth across Asia have led to a booming demand for Australia's high-quality beef, prompting farmers to try and cash in. In the past three years, Australian cattle prices have doubled to A$6 per kg.PHOTO: HALIA

Demand for high-quality beef leads to rush to snap up farmland

From his 2,500ha farm in eastern Australia, Mr Landon Hodgkinson has long been supplying beef to a high-end butcher in Sydney. But he is planning to send beef farther afield soon - to China.

Mr Hodgkinson, 47, an eighth- generation farmer who lives with his wife and daughter on the property near the town of Yass in New South Wales, has about 500 to 600 head of cattle. Each is worth about A$1,500 (S$1,534) and weighs about 560kg, which can be converted into roughly 240kg of meat and bone.

During a recent work trip to China, he became convinced of the growing demand for high-quality meat, which he now plans to meet.

"It would take about 28 days to go from our farm to (China) via sea freight," he told The Straits Times.

"Demand is growing. People in China are concerned about contamination and traceability. The main thing for us is making sure you have the quality product ready to go."

Proudly describing his herd of well-fed British breed cattle, Mr Hodgkinson added: "If they go into China, I will be very happy."

His experience is being played out across Australia, which is experiencing a so-called "beef boom".

  • 94k Amount of beef and veal in tonnes imported by China last year.

    8k Amount of beef and veal in tonnes imported by China in 2011.

Changing appetites and growing wealth across Asia have led to an increased demand for Australia's high-quality beef, prompting farmers to try and cash in. In the past three years, Australian cattle prices have doubled to over A$6 per kg.

The biggest importers of Australian beef last year were Japan, the United States, South Korea and China, with Singapore in ninth place. Last year, China imported 94,000 tonnes of beef and veal, compared with just 8,000 tonnes in 2011.

According to the Cattle Council of Australia, which represents beef cattle producers, the past 18 months have been a boon for farmers as many drought-hit farms finally received rainfall. "These have been some of the best couple of years for prices in a long time," the council's president, Mr Howard Smith, told The Straits Times. "Because of the drought, we had to sell a lot of cattle, which led to lower prices. Now there are new markets across Asia. It has helped us no end."

The boom has led to a rush to buy up large ranches across the country.

Chinese investors have bought up hundreds of millions of dollars worth of property, with Australian mining magnates such as Ms Gina Rinehart and Mr Andrew Forrest increasingly looking at the cattle business.

Ms Rinehart, labelled Australia's "cattle queen", is reportedly planning to eventually ship 800,000 head of cattle a year to southern China in a deal with China's New Hope Group that would roughly double Australia's total number of annual live cattle exports, a trade now worth A$2 billion a year.

The move comes after Ms Rinehart partnered Shanghai CRED Real Estate Stock last year to buy the S. Kidman & Co cattle empire. Its ranches cover 101,000 sq km with up to 185,000 cattle.

Her total landholding now includes about 300,000 cattle and she is reportedly planning to start mass live exports in 2019.

A spokesman for her company, Hancock Resources, told The West Australian newspaper early last month that the live export proposal was in early negotiations and would not start before 2019.

The plan has come under criticism, including from Mr Forrest, who said Australia should slaughter its cattle at home and then export the processed meat. The live export plan would be "the worst thing possible", he told The Australian. "I thought when people invested in the cattle industry, it would be for the purpose of creating jobs in Australia, not sending them, the cattle and the value-adding profits, offshore."

Analysts have also noted that Australia's beef sector may struggle to keep up with the growing demand.

Since 2013, national cattle stocks have dropped almost 10 per cent to 26.8 million this year, partly due to drought. But improved rainfall is now expected to increase the national herd to 28.2 million by 2019.

For Mr Hodgkinson, the rising prices and improved rainfall have helped him and fellow farmers grow their herds and invest in much-needed equipment. He said the prospects for his farm were "probably the best they have ever been". "It is the first time we are getting the money that we deserve for the work we are putting in," he said.

A version of this article appeared in the print edition of The Straits Times on June 03, 2017, with the headline 'Australia set to beef up meat exports to China'. Print Edition | Subscribe