Calls for beef to 'ditch China' are simplistic

Calls for beef to 'ditch China' are simplistic

Beef
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Why red meat exporters can't 'pick friends and favourites'

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THERE is no argument a diversified export footprint goes a long way to allowing Australian beef to ride out a year like 2020 when a global health crisis has wreaked havoc and geopolitical tensions with its largest customer are at boiling point.

However, calls for the red meat industry, and agriculture in general, to 'ditch China' because the world's largest importer of meat has become too difficult to deal with are simplistic, say industry leaders.

"There's a misnomer that we've lost our minds and thrown everything to China," chief executive officer of the Australian Meat Industry Council Patrick Hutchinson told a beef industry webinar this morning.

"We are an inverse manufacturer. We take a whole and create parts and sell those different parts to over 100 countries - aortas into China, goats testicles into the Caribbean. A range of different products go all over the world."

What happened in 2017, when Australia's trade agreement with China kicked into gear, was the economic superpower decided it wanted to pay above-the-odds for all parts, Mr Hutchinson explained.

That gave exporters the opportunity to happily maintain a strong level of pricing back to producers - and keep in mind Australia has the world's most expensive cattle at the moment, he said.

"Effectively, we have diverted product to China because they are willing to pay," Mr Hutchinson said.

While the red meat processing sector was constantly vocal about trade not being collateral damage during relationship issues, it did happen.

Twenty years ago, Mr Hutchinson said, Australia was staring down the barrel of United States' attempts to impose stringent and heavy tariffs on our lamb to protect its own own industry.

"Geopolitically, we're supposed to be brothers in arms with the US. On a trade basis though, we don't get to pick favourites and friends," he said.

"This year is the 50th anniversary of containerised meat exports out of Australia. We know what we're doing.

"And yes, when we become collateral damage, we have the opportunity to go to other markets but it is circumspect and deliberate moves we have to make.

"It's not moving the Queen Mary but it's not turning the tinny around either."

Uncertainty was everywhere at the moment and diversification of markets was serving the red meat industry well, Meat & Livestock Australia's Singapore-based manager of global trade development Tim Ryan said.

Mr Ryan kicked off discussion at the online event hosted by the Australian Beef Sustainability Framework consultative committee by explaining the red meat industry had two main priorities in the market access area.

One was to secure preferential access in over 90 per cent of its red meat export markets - something it has already achieved for beef.

The other was to reduce the impact of non-tariff barriers (NTBs) by $1b over the next ten years.

It's those NTBs that are behind China's explanations for the current suspension of five Australia processors from supplying its market - in these cases labeling issues and a claim of the detection of a banned veterinarian drug.

There had been a long-term trend of more and more NTBs impacting the trade, Mr Ryan said.

Access to global markets was increasingly critical to Australia's beef industry, which exports 73pc of its production, he said.

Australia is more exposed to disruptions in export markets than our competitors, many of whom - such as the US and Brazil - have huge domestic markets to fall back on.

Mr Hutchinson said FTAs were great if they coincided with effective management of NTBs.

He provided Malaysia as an example, a country with which Australia has three different FTAs in place.

"Still we are going backwards here because of NTB issues in areas such as religious grounds and Halal," he said.

ALSO READ:Beef market diversification pays big dividends

The story Calls for beef to 'ditch China' are simplistic first appeared on Farm Online.

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