![Patrick Underwood, manager of Elders' North Australian Cattle Company and Wayne Collier, LiveCorp industry capability manager at Livexforum 16. Patrick Underwood, manager of Elders' North Australian Cattle Company and Wayne Collier, LiveCorp industry capability manager at Livexforum 16.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/351c03af-c9ba-43a8-8c2a-05e27f267a33.jpg/r0_15_3264_2452_w1200_h678_fmax.jpg)
SHORT supply of cattle and rigorous protocols is keeping the live trade of slaughter and feeder cattle to China grounded at the moment but exporters certainly have the market firmly in their sights.
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Both those issues are building in costs that is effectively making doing business with China in this space unviable to Australian exporters at present.
Since the signing of the feeder and slaughter cattle health protocol in July last year, touted to pave the way for up to a million head a year to go to China, just three trial air consignments of cattle have been sent.
Prominent live exporters including Frontier International, Wellards and Elders have indicated the wheels were likely to start moving a bit quicker on the trade within the next eight to 12 months.
Speaking at the live export industry’s national conference, Livexforum 2016, in Canberra last week, representatives from those operators outlined the challenges of turning market access and compliance into trade.
They explained the extensive efforts required to meet quarantine requirements for the China slaughter market, much of it above and beyond that of other livestock export markets.
Ashley James, operations manager Frontier International, put the figure at $160 a head to hit protocol for China slaughter.
“Supply is the hardest part of putting it all together at the moment but definitely the quarantine requirements is a big issue affecting the ability to of exporters to be competitive in this market,” he said.
“Everyone wants to see China work though.”
![Ashley James, operations manager Frontier International, at Livexforum 2016. Ashley James, operations manager Frontier International, at Livexforum 2016.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/63f4e2ee-3521-419a-bbfc-60884f85200c.jpg/r679_378_2448_2732_w1200_h678_fmax.jpg)
The Chinese slaughter market was for high 400 to 500 kilogram, hormone growth promotant-free, pregnancy tested empty cattle sourced from the bluetongue virus (BTV) free zone, Mr James said.
“With further negotiation we may find a way around the BTV requirement but at the moment China slaughter is a southern business,” he said.
Farm of origin residency of three months is required and the quarantine period is seven days but the yards have to be free for an additional seven days prior.
That means exporters are paying for 14 days for yards only employed for half that time.
Other requirements include thorough truck washing, animals put through foot baths, dust mitigation plans and third party veterinarian daily inspections.
“It all comes at a huge cost and the preparation is heavily scrutinized by Chinese vets,” Mr James said.
Elders North Australian Cattle Company manager Patrick Underwood said in comparison Indonesia and Vietnam asked for one clear day in quarantine.
“Good trust exists and so there is not the oversight there,” he said.
Mr Underwood said traditionally when Australia started a live export arrangement with a country it began with slaughter cattle then moved quickly to feeders.
A nuance with China would be when sea shipments kick off, cattle will need to be processed quickly, within 14 days.
Every additional instance of handling increases the chance of bruising.
On the trial airfreight consignments, Elders was able to negotiate an extension, so there may be some potential for flexibility on that front but it was an issue exporters had to factor in, Mr Underwood said.
Setting up a consignment with China took a minimum of 12 months, closer to two years, Mr James said.
“It’s not just a case of walking into the country, meeting someone, signing a contract and putting a boat on the sea,” he said.
At the moment, the lack of supply was prohibitive and it was only when the Australian cattle market started to turn, and prices came off the boil, that the China trade would move, the exporters said.
“To not fill your ship is a big cost,” Mr Underwood said.
On the ESCAS (Exporter Supply Chain Assurance System) front, exporters said things were ‘constantly evolving’.
Wellard’s general manager for South East Asia Bernie Brosnan said exporters were reviewing control standards all the time to determine which were more efficient and cost effective.
Wellards currently allocated $6/head to ESCAS costs - in 2014-15 that equalled $1.98m, he said.