HOPES are now very high that China may overturn bans on Australian beef processors quickly as it looks to fill the massive gap in meat supply that will be left from Brazil being forced out of the market due to a case of mad cow disease.
All the necessary paperwork has long been supplied by the eight Australian abattoirs that remain suspended for various reasons, ranging from COVID-19 infections to labelling issues, so Chinese authorities certainly have in place all the information they require to sign off on allowing shipments to start again.
All eyes are on how China will react to the confirmed case of Bovine Spongiform Encephalopathy in an animal in Brazil, given its heavy reliance on the South American beef giant for its food needs.
China is the main destination for Brazilian beef exports and, likewise, protein from Brazil is the main source of supply for Chinese consumers.
Analysts say both countries will be keen to keep the time the trade is out of action to a minimum.
The latest information out of Brazil is that a meeting has occurred between the Minister of Agriculture and Livestock, Carlos Favaro and the Chinese ambassador to Brazil, Zhu Qingqiao, where all clarifications on the work being carried out for monitoring of the BSE case was provided.
Brazil immediately stopped its exports to China on confirmation of the case this week, which is in accordance with the health protocol established between the two countries.
Mr Favaro referred to the beef trade with China as being the 'greatest commercial relationship' and said all information would be forthcoming in a bid to secure 'a more agile adoption of the necessary measures by the governments'.
"The government of Brazil places great value on respect for partner countries. We want to continue guaranteeing the supply of high quality products and we are aware of our obligations and duties, doing so with total transparency, determination and agility," he said.
The test sample that confirmed BSE in a 9-year-old bull, raised on pasture on a small property in Para, has now been sent for analysis to the reference laboratory of the World Organisation for Animal Health, in Alberta, Canada, where it is expected to be confirmed as an atypical case.
This is different from the classical BSE linked to Creutzfeldt-Jakob disease in people. Humans have not contracted the disease from an atypical case, although that does not mean it is impossible.
An atypical case also means the animal did not contract the disease via contaminated meat-and-bone meal, which would have been a sign there are practices in place in a country posing the danger of mad cow disease.
Most analysts seem to think if the case is confirmed as atypical, the ban on shipments to China will last a very short time.
Australian Meat Industry Council chief executive Patrick Hutchinson acknowledged the devastation the event had caused to Brazilian beef counterparts.
"It is terrible news for their industry and farmers and we hope they can sort it out quickly," he said.
Would Australia be able to meet demand for greatly expanded volumes to China?
"If we saw the temporary suspensions lifted and we could operate at our capacity, we would be able to supply significantly more but it won't be a simple case of access suddenly occurs and away we go," Mr Hutchinson said.
While more cattle supply in Australia is certainly coming on board, exporters are hamstrung in their ability to process cattle by a severe shortage of labour. Further, demand for Australian beef is strong in many markets - we ship to more than a hundred - and the abattoirs who have been suspended from China have forged new relationships.
"Markets will dictate what happens," Mr Hutchinson said.
"We sent 172,000 tonnes of beef to China last year (compared to Brazil sending 1.24 million tonnes) so the opportunity to increase that is definitely there.
"But we also compete with Brazil in the US and in ASEAN, so if Brazil can not supply them, what we ship where will come down to market forces."
However, on a high-value cuts basis, China has always been very competitive with other markets, Mr Hutchinson confirmed.
"In fact on a commodity basis, it is also as competitive, if not more, as the US and ASEAN.
"That is the reason why, just before our cattle supply started to tighten up, we sent 30 per cent of our beef to China in 2019."
Australian beef exporters were optimistic before the Brazil BSE case that movement on the suspensions might be coming soon, on the back of an easing of other import restrictions, such as coal and live lobsters.
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
