China has opened its doors to big tonnages of Brazilian beef that has been sitting on its wharves since the South American country confirmed an isolated atypical case of Bovine Spongiform Encephalopathy in February.
The move will exacerbate the situation of already over-flowing meat freezers in China, with volumes currently in stores in China at as much as 3.5 times the average imported beef volumes held in store in 2021.
A slowing economy combined with skyrocketing COVID infections has meant beef demand in China has fallen off a cliff in the past six months.
This situation is having a big impact on the prices Australian beef exporters are able to secure.
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China's decision to release the stock of Brazilian beef that was already in shipment when the trade was suspended due to the atypical BSE case will mean at least 40,000 tonnes of frozen beef, worth around 2.5 billion Brazilian Real, will now flow quickly into its markets.
The decision comes on the back of changes to international animal health rules whereby cases of atypical BSE no longer have to be reported.
The Chinese decision has been welcomed with open arms in Brazil, where government ministers have declared it will "warm up the Brazilian economy."
From Australia's perspective, analysts say the emphasis is now very much on the United States, with the hope that herd rebuilding there starts to strip product from the global market quickly.
Indeed, reports coming from US cattle industry media are that beef markets are undergoing a sharp transition with sharply higher prices and these conditions are expected to impact international trade of US beef.
Respected commentator Derrell Peel, of Oklahoma State University, wrote in Drovers that US beef exports in the latest data, from May, were down 19.9 per cent year-on-year.
In particular, US shipments to Japan - one of Australia's most valuable markets - were down 36.4pc.
At the same time, for the January to May period, beef imports to the US from Australia were up 23.9pc, Mr Peel reported.
Australia is currently the fifth largest beef import source.
US beef production has a big influence on the fortunes of Australian exporters, with that country being both a key competitor - particularly in high-value Asian markets - and a key customer.
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
