Australian beef producers benefit from China's new measures

A new front in the battle for global beef markets is emerging from the pacific, with Australian producers benefiting this week from the launch of a series of measures from China.

In the past few months Australian beef exports have carved massive inroads into lucrative Chinese markets, with the news that November shipping alone surged the total amount of beef sent to the country in 2011 followed by a top level deal that will augment Australia's already formidable Asian foothold.

According to the latest figures from the Australian Bureau of Resource Economics and Sciences (ABARES), Australian beef shipments to China in the first quarter of this year totaled 29, 000 tons, against just 2,000 tons for the same period last year.

In what is being described here as an historic agreement, the Australian Prime Minister Julia Gillard and Premier Li Keqiang met in Beijing last week, establishing a new diplomatic architecture that will see Australian and Chinese foreign ministers in annual consultations as well as annual formal discussions between the Australian treasurer and trade minister with the chairman of the Chinese National Development and Reform Commission (NDRC).

Consequently, Australia's Trade Minister Craig Emerson, after his first meeting with the NDRC, Tuesday armed with official accreditation for 28 Australian cold store facilities allowing for the aggregation of beef stock solely for the Chinese market.

The deal not only cuts Australian producers costs by consolidating oversize shipments of meat but the improvement in storage facilities for shipping is perfectly timed -- as Chinese imports of Australian beef overwhelm even the most bullish expectations.

According to official figures released this week, while 2011 saw Australia export 7,754 tons of shipped weight beef to China -- up almost 40 per cent year-on-year, in 2012, Chinese imports of Australian beef surged almost 250 per cent to 27,300 tons.

Touting the NDRC deal, Dr Emerson described China as the next playground for Australia's ambitious front-line beef producers.

"China is a rapidly growing market for Australian beef producers. This agreement creates game-changing efficiencies for beef processors around the country." Dr Emerson told reporters.

Australia's Agriculture Minister Joe Ludwig, a proponent of engaging with Chinese partners called the deal a win for Australia and the reputation it has sought as a producer of exportable food security.

"This arrangement is a testament to the high-quality of Australian beef, as well as our reputation as a high-quality exporter."

However, Meat and Livestock Australia (MLA) chief economist Tim McRae said Australian officials and beef producers needed to be wary of premature victory laps.

"I'd be a bit cautious to call it just on a few big months. You 'd probably want to see that sustained for another half a year to really be confident it could be a substantial market, like Russia was there for a while," Mr McRae said.