Growth opportunities for the Australian beef industry are almost unlimited as a booming Chinese middle class develops a taste for a more beef-heavy, westernised diet.
That was one of the major take-outs for Chris Clemson from Walgett stock and station agency Clemson Hiscox & Co, who has just returned from a whirlwind 10 day tour to China led by NAB Agribusiness.
“I knew there was growing demand for Wagyu F1 cattle in China and I knew a lot of beef producers in Australia were crossbreeding Wagyu bulls with Angus cows specifically for Asian markets, but the tour opened my eyes to the sheer scale of the demand,” Mr Clemson said.
“Whatever Australia can produce agriculturally in a year, China can consume in one day – which provides some insight into the size of the market.
“Most of the Australian beef we saw over there was around the $40-$60 per kilo mark, and that is for beef cuts we’d pay about $30 per kilo for over here.
“So high prices coupled with almost limitless demand is great for Australian beef exporters.” Mr Clemson says wool seems to be the other sought after commodity.
“There is huge demand for Australian merino wool at the moment and a number of Chinese mills are looking to do joint ventures with Australian companies.
NAB Agribusiness General Manager Khan Horne, who’s been a regular visitor to China and led this most recent tour of 31 customers, says understanding what export markets want and seeing it first hand, are critical to getting the right outcomes, particularly in China.
“The Chinese place a strong focus on face-to-face meetings to build business relationships, and it’s great that more Australian agribusinesses are travelling to all parts of China,’ Mr Horne said.
“Gaining an understanding of how the supply chain works, and your customer’s role in it, can also provide insights on how to value-add, and you can then develop an appropriate business strategy in response.”
In 2016, China purchased $10 billion of exports from Australia’s agriculture, forestry and fisheries industries, up from $5 billion in 2010 and 2011.