CHINA’S recently announced beef import restrictions will put pressure on Australia’s market, but global protein demand would mean a “soft landing” for producers, the first Southern Beef and Lamb School in Wagga Wagga was told yesterday.
In January, China’s Ministry of Commerce imposed a series of Safeguard limits on major beef exporters for the next three years, affecting several countries, including Australia.
Teys’ Ethan Mooney addressing yesterday’s feeder steer school in Wagga
Australia will this year be subjected to a Safeguard TRQ of 205,000 tonnes, representing about 75 percent of the 2025 total exported volume. The out-of-quota tariff rate on Australian and other imported beef for the next three years will be 55pc.
Teys Australia’s livestock strategic operations manager Ethan Mooney told the school he did not want to sugar-coat the impact of the over quota tariff on Australia.
“There is absolutely going to be changes to the market dynamics,” he said, with Australia anticipated to fill its China quota limit by May.
Mr Mooney said China is a very large market for Australia’s grassfed and grainfed beef and “there is going to be pressure if you look at it individually.”
But he said there continues to be a protein shortage in the world.
“We’ve got America is going through a herd liquidation, with their lowest herd since 1952.
“They’re producing less beef, they have access issues within China as well, quite a number of their sites are yet to be relisted and not looking likely that they are with the political situation.”
“So we see, yes, there will shifts in market dynamics, but will it be as pronounced if we didn’t have the geopolitical situation we do now, no, it would be much much more pronounced.
“So it will be a soft landing because of the demand out of the US, it will be a soft landing because of the demand coming out of South East Asia,” he said.
He said Australia had the ability to market certain products into America, including grass-fed HGP-free beef, while still maintaining access for grain-fed product. America and Canada are now among the major importers of Australia’s grain-fed beef, because of the herd liquidation, Mr Mooney said.
“So it’s (about) capitalising on those market opportunities.”
Mr Mooney said there had also been a huge herd reduction in the United Kingdom, 3pc year-on-year for the last 10 years, while the human population was increasing with a disproportionate rate of increase in beef consumers.
He urged producers to talk to the Department of Agriculture Forestry and Fisheries and to Teys about EU Cattle Accreditation Scheme.
“And South-East Asia continues to be a dominant grass-fed business where demand is set to continue.
“Australia produces wonderful wonderful beef at high marble score and at a very low number of days on feed.”
Mr Mooney focussed his presentation on the outlook for Australian beef and what supply chain success looks like.
He said market access is the single largest driver of value to processors and producers.
Teys also wanted to optimise value from objective carcase measurement and producers needed to get comfortable about value-based marketing, which will be “a journey,” he said.
“In order to get to value-based marketing, we need to get comfortable with what are the carcase measurement tools that give the information back to producers to say ‘these are the dollars that are on the table, this is where we need to be go and invest in certain genetics that have certain red meat and lean meat yield increases.”
Mr Mooney is part of a Teys committee to identify the main objective carcase measurement tools from an eating quality and yield grade perspective, to advise producers and lead into “the continued story for value-based marketing.”
On whether producers should look at EU accreditation, Mr Mooney said the indications are that there is going to be growth in the EU and UK markets for Australian producers, especially for HGP-free product. He said some parts of the Australia-EU FTA require some EUCAS accreditation.
“We see there is growth, and there is definitely upside potential in the UK and the EU because of what we producing – HGP-free.”
But on whether Australian producers needed to do anything different to improve their market access potential, he said everyone needed to make decisions that are right for their country.
“I always go back to having the right cattle for country.”
“We all need to be doing what is right for our area,” he said and
“Teys isn’t in a position to tell you what you should or shouldn’t do, what we should be able to do is to give you the opportunities to take the data and take the insights to say this is what we can offer if you work out which one (market option) is most appropriate for your business.
“We see HGPs as an absolute necessity for certain parts of Australia, because the cattle and the cattle for that country are required to use that.
“We have branded beef intake programs that are very particular happy to have HGPs in them and they play a necessary role in being able to produce efficient and more beef,” he said.
He said HGPs have a wonderful sustainability story because they enable production of more kilograms of beef in a shorter period of time.
Mr Mooney said red meat – lamb and beef – are still a luxury items and Teys aimed to optimise value for every part of the carcase, market access drove sustainability of market price.
“And what drives sustainability is profitable growth for all involved in that market chain.
“One of the ways that that we do that is to optimise our branded programs.”
There’s a lot of sense in what is said here. I particularly like the comment on keeping the right kind of cattle for the country you have. There will be a shift if China buys 800 000 tons less out of Brazil and Australia, I think it will be an interesting last 6 months of the year.