The world's big beef exporters, including Australia, are breathing a sigh of relief at changes to international animal health rules whereby cases of atypical mad cow disease no longer have to be reported.
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However, in the short-term there could be flow-on effects that hit Australian beef exports hard, given the big volumes of Brazilian beef locked out of China due to an atypical case.
Atypical cases of bovine spongiform encephalopathy occur spontaneously in cattle populations at a very low rate and have no significant impact on animal or human health.
Yet where they have occurred, trade ramifications have taken massive tolls on affected countries.
Australia has often benefited from its competitors being locked out of markets but cattle industry leaders here have long warned an atypical case could just as easily occur on our soil, and the reaction from key customers such as China, South Korea and Japan might be crippling.
The World Organisation for Animal Health last month removed atypical cases from the list of diseases requiring compulsory worldwide notification, a move welcomed as sensible by beef countries across the board.
Meat market analyst Simon Quilty, Global AgriTrends, made the point, however, that could mean China opens its doors very soon to as much as 70,000 tonnes of Brazilian beef that has been sitting on Chinese wharves since late March, unable to enter due to the reporting of an atypical case in the South American country.
"To date, we have seen no movement out of China on recognising the WOAH announcement, but if it does react that would compound the situation of stockpiled imported beef sitting in Chinese freezers," Mr Quilty said.
The China Beef Stock Index suggests the volumes currently in cold stores are at 3 to 3.5 times the average imported beef volumes held in store in 2021, he said.
Most of it is from Brazil, Argentina and Uruguay.
A slowing economy combined with skyrocketing COVID infections has meant beef demand in China has fallen off a cliff in the past six months.
"Companies that finance beef importers in China are now telling them to move that stock as it ages. As such, the spot market has been flooded with heavily discounted product," Mr Quilty explained.
"This is a big negative for Australian exporters. Not only is China one of our four largest markets but it takes cuts that don't find a home in other large markets like the United States."
Mr Quilty said beef exporting was extremely challenging for Australian businesses at the moment.
Only one of our major markets - the US - was firing on all cylinders and it was quickly becoming our 'great white hope', he said.
Economic downturns had also taken a big toll on beef demand in Japan and South Korea.
"Ideally we need two out of four markets firing to hold beef prices where they are at today," Mr Quilty said.
"The high beef stocks in Asia will take the balance of this year to clean up and return to some normality - on the proviso their economies don't deteriorate any further."
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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
