Processors stick to business in wake of China suspensions

Processors stick to business in wake of China suspensions

ON WITH THE JOB: Northern Co-operative Meat Company chief executive officer Simon Stahl says it's business as usual in Casino.

ON WITH THE JOB: Northern Co-operative Meat Company chief executive officer Simon Stahl says it's business as usual in Casino.


Economists blame geopolitical tensions.


THE four big beef processors suspended from accessing the Chinese market appear to be taking a pragmatic 'stick to business' approach amid inflammatory calls from wider society for Australian agriculture to wipe its hands of China.

Chief executive officer of the Northern Co-operative Meat Company at Casino in northern NSW, Simon Stahl, said his organisation would address the technical issues raised and was not blaming anyone.

"Our focus now is getting on with business. Perhaps later we can assess what when wrong here and what might be able to be done to prevent this happening in the future," he said.

Along with three Queensland export plants, Kilcoy Global Foods' abattoir and two JBS Australia facilities - Dinmore and Beef City - the NCMC was told it was suspended from sending shipments to China from yesterday.

The four abattoirs are key Australian suppliers to China's lucrative chilled beef market.

Economists say the move by China is absolutely in retaliation to Australia's push for an inquiry into the origin of the devastating coronavirus.


They say it will be difficult for Australia's beef industry to treat it as a trade problem - the solution will come via government negotiations.

However, none of the processors involved are talking politics. Rather they appear to be working to understand and correct the technical issues.

Mr Stahl said coronavirus, and ensuring communities were safe, remained the number one issue.

He was confident his business would find other markets to bridge the gap.

"It is never ideal to be out of any market however our job is to make sure we have diversity," he said.

"There is no cause for panic. At the end of the day, the world over-enjoys our beef and nothing will change in that respect."

It remains unclear precisely on what grounds the plants have been suspended, however labeling and China's requirement for beef to be hormone growth promotant free have been touted.

Labeling was behind China's suspension of six Australian plants three years ago.

Analysts, and the processing sector's peak advocacy group, point out while suspensions are never desirable, Australia has had to deal with issues 'of this nature' before.

China's demand for Australian beef has not taken a backward step this year, despite coronavirus disruptions, and shipments were tracking 10 per cent above year-ago levels.


Analysts point out China remains desperately short of animal protein in the wake of African swine fever wiping out half of its domestic pig production.

Resource economist at CQUniversity Professor John Rolfe said China had been a fast-growing beef market in recent years and had put a floor in Australian, and indeed world, cattle prices.

The drop in protein supply from ASF had coincided with increasing wealth pushing demand for beef higher to see China lift its imports of meat dramatically, Pro Rolfe said.

Australia had benefited but competitors like Brazil and even New Zealand had probably benefited more, he said.

"In terms of normal supply and demand forces, we would expect China to continue to want to import Australian beef in high volumes throughout 2020," he said.

He believes the suspensions are in relation to geopolitical tensions and go hand-in-hand with hefty barley tariffs headed Australia's way from China.

"The issue for our beef industry is how do companies and producers have any influence on this sort of thing. Only high level government-to-government negotiations will be what sorts it out," Prof Rolfe said.

He says the Australian Government is likely to be very proactive - free trade has been a signature achievement and beef processing was well recognised for its contribution to Australia's economy and in particular regional areas.

Prof Rolfe pointed out the suspensions create lost opportunities on both sides and Chinese importers would be hit hard too.

"It is important for our beef industry to reiterate China is a valuable trading partner," he said.

"This is not a beef industry problem but a broader relationship issue."


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