China has eclipsed the United States as the world's biggest beef importer but Australia is barely treading water in the market while some of our biggest rivals are kicking major goals.
That's the view of Wangaratta-based meat broker, trader and consultant, Simon Quilty, who said China had officially taken the US's crown last August as the world's dominant player in the international beef trade.
"We think that is unlikely to change," he said. "Ten years ago the first question every meat trader asked when they walked into the office was 'what is the US market doing today'?" he said. Now they were asking the same question about China.
He said China was now setting the world market for the lean end of the trade. More bull and cow beef which once would have been shipped to the US for hamburger mince was now being sent to China as value-added boneless cuts.
China's appetite for imported beef had grown throughout last year, a trend which had been been given an extra push by an outbreak of African swine flu in the world's biggest pork producer, Mr Quilty said.
Reports indicate almost one million pigs have been slaughtered while domestic demand for Chinese pork has fallen in response to the outbreak.
"Swine fever has been another catalyst to lift demand for beef in China."
Mr Quilty expected China to lift its direct beef imports by 21pc to around 1.3 million tonnes (shipped weight) in 2019.
He said China unofficially had been the largest importer of beef for the past six years when the so-called "grey" trade into the country via Vietnam and Hong Kong was taken into account.
About mid last year Chinese authorities began clamping down on the "grey" trade where cheap meat including buffalo from India is smuggled into the country, bypassing the duties and health and safety requirements placed on legitimate imports.
This crackdown had also helped lift imports cheaper bull and cow cuts, including NZ dairy beef, which were affordable for the lower tier of China's swelling middle class.
Mr Quilty said China had been gearing up for higher beef imports by approving 269 beef plants globally to export to China from 17 different countries.
Last December Brazil had apparently received approval for an extra 78 new meat establishments to export into China including 22 beef plants, he said.
However, Mr Quilty said he had been told 16 Australian plants had been waiting two years for export approval.
"I believe the Australian meat and livestock industry is being dogged by federal politics as Australia's China relations remain strained. As long as this continues it creates doubt in this trade and prevents Australia reaching its full potential in this market.
"Conversely, other countries are increasing their export footprint in China unfortunately at Australia's expense."
Meanwhile, the importance of the Chinese market for the local beef industry was highlighted in latest MLA export figures.
Beef exports for February climbed to almost 95,000 tonnes on the back of higher grassfed cattle slaughter and a weak Aussie dollar.
MLA said shipments were up 11pc compared with the same month last year.
It said demand had been led by China – the third largest destination in February and just shy of volumes to the US – which recorded a 65pc lift on 2018 levels at just over 19,000 tonnes.