AUSTRALIAN beef should steer a steady course as far as China is concerned because despite the challenges of trade tensions, increasing competition and short cattle supply, it's still a market with huge long-term potential.
That was the advice from Meat & Livestock Australia's regional manager for China Joe Zhu during a recent webinar on red meat marketing.
"Our industry is not a speedboat and meat is a long-term business," Mr Zhu said.
There was tremendous goodwill in China towards Australian beef, lamb and goat products that had been built over decades.
Coupled with the fact China remains the largest meat consumer in the world and will likely continue to consume even more, it was a market that simply holds too much promise to turn our backs on.
But key to success there would be a long-term, relationship-building approach, Mr Zhu said.
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Growing demand
Increased meat consumption in China was the result of rising incomes in the emerging middle class and beef and lamb consumption was growing faster than pork and poultry, Mr Zhu reported.
"China's natural resources does not support the domestic production of cattle and sheep to keep up with such demand growth," he said.
"Therefore red meat imports have been rapidly growing, at 20 to 30 per cent year-on-year. Even this year, despite COVID hurdles, beef imports are up by 10pc and sheep meat by 30pc."
Mr Zhu explained Australian meat exports to China started to take off in 2012. Australia has had a market access advantage for most of the time since, and its products fit with consumer demands beautifully.
Despite the pandemic disruptions, and the fact a number of Australian plants are now suspended from supplying China, it is still the largest red meat market for Australia.
Export volumes of beef to China have this year, however, been consistently low relative to recent years. The average monthly shipment during 2021 has been 12,086 tonnes shipping weight, compared to more than 16,000t last year and 25,000t in 2019.
Correspondingly, China's market share has fallen from 20pc last year to 16pc in 2021, MLA's latest cattle projections said.
"Australia has enjoyed a privileged position over the past decade with two of our largest competitors, the United States and Japan, not having access," Mr Zhu said.
"Now the US has regained access and quickly expanded their footprint. That is likely to continue. There is no doubt the US will take more and more market share.
"However, that will displace their share to other markets and Australia has a diverse export portfolio and will be able to capture those resulting opportunities."
And the opportunity in China for Australian beef and lamb was still promising, even against a backdrop of greater competition.
"Most importantly, Chinese consumers love Australian product," Mr Zhu said.
The way forward, he believes, would be in a focus on telling our provenance story and leveraging the strength of our already strong brand equity and the Chinese consumer preference for Australian product.
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Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
