Shipments of live cattle from Australia to China began in February, opening up a welcome growth area in an industry that has endured shockwaves.
They include a ban on live cattle exports and drought, which have been compounded by declining land values, lack of profitability in the market and rising farm debt.
While Australia’s golden age of agriculture, which coined the phrase “riding on the sheep’s back”, has long given way to other industries like tourism, mining and even education, the potential in the Chinese market excites industry leaders.
In February, two companies began operations exporting livestock with a third to follow between March and June.
While numbers are low with just 150,000 expected to be shipped this year, Farm Online said exporters expected more next year and described it as a “positive event” for the cattle industry.
The new collaboration reflects Chinese interest in quality beef and an increase in consumption.
The Guardian said meat was no longer considered a rare treat in China but a diet staple, thanks to the nation’s burgeoning economic growth.
An average person now eats 63kg of meat a year, up from 13kg in 1982.
This has been matched by an increasing interest in Australian cattle farming and agribusiness, with China becoming the largest source of new foreign investment in agriculture in 2014-15, according to Sydney Morning Herald.
In December last year, Australian mining magnate Gina Rinehart partnered with a Chinese consortium to acquire the massive Kidman cattle empire which has pastoral leases covering 101,000sq km in Western Australia, Queensland, South Australia and the Northern Territory.
Australian Outback Beef is a joint venture company owned by Rinehart’s Hancock Prospecting (67 percent) and Chinese company Shanghai CRED Real Estate Stock (33 percent).
While the 185,000 Kidman cattle have previously been shipped to Japan, the U.S. and Southeast Asia, Shanghai CRED has commissioned a live export shipment.
Rinehart herself recently started sending frozen boxed Wagyu beef to China.
University of Sydney professor Hans Hendrischke co-authored a report in 2016 called Demystifying Chinese Investment in Australia about foreign investment in Australia.
He said one of the reasons Chinese investors come here and why agricultural trade is growing is that there’s a crisis in the food market.
He told the ABC :
People in China don’t trust food security in their own country and the place to go is Australia.”
The development of markets interested in a clean and green image is welcomed by the Australian cattle industry, whose reputation came under fire when the ABC’s Four Corner’s aired the documentary A Bloody Business about the mistreatment of Australian cattle in abattoirs in Indonesia.
The graphic images led to a massive public outcry and the government suspended the AUD1.4 billion (US$1.07 billion) trade, leaving producers with nowhere to send their stock.
The loss of income, farms, jobs and confidence in the market left it reeling.
The Weekly Times said Australian live cattle exports fell 42 percent from 521,002 in 2010 to 278,581 in 2012.
In 2006, Australia also halted the live trade to Egypt for four years over similar allegations, until standards improved.
Reaching the Chinese may not only present a business opportunity in a new market, but also within more acceptable animal welfare standards. China has mechanised plants where aspects of slaughter are more easily controlled than in small scale outlets where the systems are fragmented.
Australian Livestock Exporters’ Council chairman Simon Crean said in a statement the emerging market was “built on the values Australia shares with China around biosecurity, traceability, welfare and an appreciation for high-quality cattle and beef”.
The University of Queensland has been investigating China’s beef industry for more than 20 years, including animal welfare elements.
“The Chinese are very conscious of the fact animal welfare is a big issue in Australia. Both private and government companies are asking extensively about training in animal handling and slaughter,” researcher Dr Scott Waldron told The Land.
While China still has no legislation against animal cruelty, it has a growing animal rights movement which are keen to bring about change.
South China Morning Post had listed recent advances in animal welfare including a 2011 ban on animal performance in zoos and elimination of mandatory animal testing for all cosmetics in 2014.