With market access to China on the improve as dialogue and trade relations are restored after the disruptions of recent years, the Australian Meat Industry Council is looking to ensure they have done everything they can in building on the new goodwill.
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AMIC chief executive officer Pat Hutchinson and AMIC trade and technical affairs general manager Sam Munsie left for China on the weekend. They are looking to re-enforce their trade and political relationships at a commercial level to ensure they are in the best possible position in the future to respond to any trade issues that may arise in this most important of export markets.
They will be meeting with a range of government and industry officials including the China Meat Association and China Chambers of Commerce.
"China still sees Australia as a reliable supplier of red meat," Mr Hutchinson said.
Managing the outcomes and working closely with the government to minimise any misunderstandings and building trust as an honest broker would be crucial to achieving the best outcomes, he said.
Since the middle of 2023, Chinese beef production has been on the increase according to the US Department of Agriculture and together with ongoing beef imports, inventory levels are reportedly high.
The lack of consumer confidence in China at present continues to weigh on meat demand and while Australian beef exports to China to May this year are only 3 per cent below the same time last year, they represent a reduced percentage of total Australian beef exports which are up by 28pc over the same period.
Similarly sheepmeat exports to China are also down slightly over the five months to May while total lamb and mutton exports are up over 20pc.
Australia's zero tariff beef access under the free trade agreement with China will fall this year by close to 24,000 tonnes to just 178,418 tonnes.
This is because Australia overshipped last year by that amount. China has the option to waive the volume safeguard. They applied it last year but the new, more open trading relationship may lead to a more flexible policy in 2024.
The Premier of China Mr Li Qiang visited Australia last week in yet another show of the improving relationship with Australia.
We should not forget, however, that the vagaries of market access in the international red meattrade are ever present and technical market access should never be taken for granted.
Hence the importance of the AMIC visit to China at this crucial time in the development of the trade. The visit also comes after all but two of the eleven meat processing plants suspended by China have had those suspensions lifted, some after almost three years out of the market.
It's also the first time in seven years that such a senior Chinese Government official has visited Australia.
When Li's predecessor as Premier, Li Keqiang visited Australia in 2017, China-Australia relations were at their zenith.
The free trade agreement was in full swing and proposals to expand Australian beef and sheepmeat access to China by up to 16 new plants was on the table.
The media coverage of the decision at the time to also allow all current plants listed for frozen beef and sheepmeat to China to also be listed for chilled meat was lauded as a major breakthrough in technical market access when announced during Li Keqiang's visit.
Ultimately politics intervened and the new plant registrations and expanded chilled access never happened.
The importance of that outcome, especially for beef, has continued to play out ever since.
South America now supplies over 76pc of beef imports into China and has dominated the low priced/lower quality end of the market.
So far, to April this year Australia has represented only 8.4pc of total Chinese beef imports so competing with South America on price is not an option.
Clearly the higher quality and premium chilled sector of this vast market is where Australia has a clear comparative advantage especially on beef and where our product is differentiated from the majority of beef in the market.
But still today, seven years later, only ten or so plants have chilled access to China and an expansion of this list along with the list of new plants are still awaiting technical access issues to be resolved.
As a reality check, China's Commerce Department this week opened an anti-dumping investigation into imported pork from the European Union, in response to tariff-related restrictions by the EU on Chinese electric vehicles.
Trade dynamics can change quickly so organisations like AMIC need to be ever vigilant in building and maintaining the best possible relationships to manage issues of this nature when they occur.
The Department of Agriculture was in China two weeks ago and commercial visits like AMIC's will only help to cement the relationship, the reputation and the reliability.
Local trade
National cattle slaughter fell by almost 11,000 head for the week ending 14 June as the effect of public holidays in most states except Queensland and Western Australia had its impact.
Given a full kill week in all states last week, to June 21, and no logistical issues, slaughter numbers should be back to previous 140,000 head plus levels where labour constraints appear to come into play, even with extra shifts and some weekend kills.
The onset of winter and a greater incidence of frosts has seemed to push more slaughter-ready cattle forward especially as you move further north, putting pressure on processor grids. Southern processors are reportedly still active north of the Queensland border in order to maintain southern slaughter levels.
Strong beef export demand (114,000 tonnes in May) is continuing in June, absorbing the higher production levels as domestic demand waivers.
Cattle slaughter is still over 13pc above the same time last year.
