Australia’s booming breeding heifer export trade to Russia and nearby states is likely to hit 30,000 head this year, as emerging market breeding programs gain further momentum.
The manager of the International Livestock Resources and Information Centre, Christian Duff, told Tuesday’s Angus Australia National Conference that there were strong signs of likely further growth in the trade.
Using statistics generated through the Australian Cattle Genetics Export Agency’s certification process, Mr Duff illustrated how numbers of breeding females consigned had grown in recent years, principally to Russia, but also to second-tier markets like Kazakhstan, Turkey and China.
In 2010, total numbers certified were just 5380 head, before rising five-fold last year to 24,769 head.
So far in 2012, there had been 17,648 head certified for export, and Mr Duff said he was confident, based on discussions with exporters, that total numbers this year would exceed 30,000 head.
Three shipments (each typically around 8000 head capacity) are currently lined up for the August/September period, with the prospect of more later in the year.
He said the explosion in demand for breeding heifers from northern hemisphere customer countries was happening because of each nation’s efforts to build, or in some cases rebuild their beef breeding herd capacity.
Many were fuelled by Government leasing and subsidisation schemes, designed to stimulate the rate of expansion.
The overwhelming volume of trade into Russia is with one company, Miratorg, which is currently that nation’s largest pork producer, controlling a vast vertically-integrated business, and now getting into beef in a big way.
By the end of this year, Miratorg plans to have 16 ‘farms’ in operation, as part of a long-term plan to operate 40 farms mostly south of Moscow. Each will support about 3000 breeders giving a total of about 120,000 breeders by 2014, all imported Angus genetics. The total investment in breeding, lotfeeding and processing amounts to around US$830 million.
“It’s not like they are just starting, they are already a fair way through this process,” Mr Duff said.
Breeding heifers for the Miratorg project are being sourced from both the US and Australia.
The Boomberg news agency recently highlighted that Russia is aiming to produce 85 percent of its beef needs by 2020, up from the current figure of 60pc, being driven primarily by Government subsidisation and leasing schemes.
There is being driven in part by a rapid increase in the number of middle class Russians who have incomes capable of supporting greater beef consumption, Bloomberg reported.
Traditionally, Russia had a large cattle population, but that has been severely degraded during the Stalinist era, and again more recently, as the population ate its way through the breeding herd.
While Russia continues to support a very large dairy cow herd, animals classified as beef breeding cattle were very low, at only around 250,000 head, Bloomberg said.
By 2014 Miratorg aims to produce about 114,000 male calves for slaughter each year, converting to 30,000 tonnes of beef for domestic consumption.
Angus is clearly the breed of choice for the Miratorg project, selected because the cattle “have the capacity to adjust perfectly to the climate.” Many of the breeding areas can get to minus 35C in winter, and the company finds the Angus cattle, both those sourced from Australia as well as the US, can adjust to those temperatures quite easily.
Additionally, the Miratorg company has a stated aim of producing higher quality beef, well suited to Angus genetics.
Management expertise has been ‘imported’ through US and Australian cattlemen with extensive production and lotfeeding experience. One US staffmember suggested that the Miratorg project would be without parallel in terms of the average quality of genetics on hand across such a large commercial enterprise.
Mr Duff also provided a detailed explanation about the need for standards and certification for Australian breeding cattle entering the market, provided through the Australian Cattle Genetics Export Agency.
“Basically they are valued because we need to ensure we are consistently providing quality beef breeding animals to overseas markets that are building their herds. We cannot afford to send cattle that do not meet certain quality criteria, otherwise the markets could close down very quickly,” he said.
The overwhelming factor in this is that the governments working with the development programs needed certification for every animal, including pedigree and quality.
The Australian system represented the world’s first attempt at independent national standards for quality assurance and certification, Mr Duff said. The standards are equipped to certify more than 30 purebred beef breeds.
“Most importantly, the program is independent, and not linked to exporters, and every animal is inspected by an independent ACGEA inspector,” he said.
In 2011, almost all of the breeding cattle leaving Australia for Russia were under the ‘category 2’ component, comprising registered purebred breeding cattle – basically commercial females, by known sires (either single sire or multiple sire groups to a maximum of five). They must also meet structural and type parameters.
Category 1 cattle, very few in number, are basically registered purebred stud breeder cattle with three generations of pedigree information provided on each side.
Last year, rejection rates were very low, typically 0.5 to 2pc of a total shipment, but included animals with feet and leg problems, and type issues.
“But it would only take one or two of those animals to slip through to cause some damage to the market,” Mr Duff said.
Combining shipments from 2011 and those so far in 2012, the overwhelming majority of cattle exported (40,316 head) have been Angus, with smaller numbers of Hereford (2101) and other breeds, including a few Droughtmasters. More than 98 percent were the previously-described ‘category 2’ cattle.
A number of live exporters are active in the trade, including Elders International, Global Exports, Austrex, Landmark and Wellard.
Mr Duff said one of the unknowns was what would happen if the dominant Miratorg company changed its mind over the trade. “Perhaps there are other Miratorgs out there, but that is unknown at this stage,” he said.
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