Australia is well placed to export high-value premium-grade meats. U.S. beef exports to China are hitting record highs, thanks to those picky Chinese eaters. The live export market lull continues. Angus demand for Australian grain-fed beef is red hot. Orders are flooding in as the trade picture changes, particularly because of the current trade war between China and the United States. This year, Australia occupied center stage with its beef industry as the feature country at SIAL Shanghai. It’s one of the world’s largest food trade shows.
Murray Davis, the regional manager for Meat and Livestock Australia, sits in Shanghai. He’s at pains to point out the fundamentals behind Australia’s beef trade with China are solid. He expects that notwithstanding the challenges economic headwinds pose, the market will continue to be strong. “There are some economic headwinds here, in that consumer sentiment is a little bit subdued, the stock market is down, property prices are down, but it still remains a 200,000-tonne-a-year [beef] market for us,” Davis stated.
A Booming Market for Grain-Fed Beef
Orders for Australian grain-fed beef are rolling in as well. This trend illustrates the increasing demand of Chinese consumers for higher-quality meat products. As trade barriers have shrank the U.S. influence in this market, Australia has rushed to fill the void. SIAL Shanghai trade show offered an opportunity to Australian producers to engage directly with buyers and distributors.
Davis also noted Australia’s growing brand awareness in the China market. “Australia is absolutely centre stage [here in China] and we are dominating the premium end of the beef market,” he remarked. This new position, in addition to raising Australia’s international profile, will help improve Australia’s competitive advantage as consumers around the world continue changing their preferences.
The world, and especially Asia, has gone nuts about the demand for Australian beef. This increase can be attributed to less competition from the US, which historically was a major player in the Chinese beef market. The U.S. pavilion at the SIAL Shanghai trade show was noticeably quiet, reflecting the challenges faced by American exporters amidst ongoing trade disputes.
Positive Financial Outcomes Amid Global Uncertainty
The Australian Agricultural Company (AACo), which is Australia’s largest beef producer. Just last week, they announced record earnings—quite an accomplishment considering the global challenges that are affecting every industry, including vehicle manufacturing. David Harris, Chief Executive of AACo, admitted China had yet to become a key buyer of their premium brands. He noted that their exports to China are critical to supporting high volumes in their other markets.
As Harris said, “Business has been great with the US. He pointed to the company’s continued push into U.S. markets, even in the context of an incredibly competitive environment. He added, “There is no doubting there’s been lots of conversations between importers, distributors, customers and ourselves in relation to the tariff.”
In her answers, Harris underscored that AACo does not rely almost exclusively on China. It is the sheer amount of beef that Australia has been exporting to China that underpins their global business. “We’re not over-leveraged into China, but because it moves volumes of beef out of other markets, that certainly helps us in other global markets,” he stated.
Shifting Dynamics in Global Trade
Australia’s beef industry continues to prosper in the Chinese market. At the same time, U.S.-China trade and technology disputes are reshaping the competitive landscape globally. Almost all the U.S. exhibitors at SIAL Shanghai chose to not have Americans there. Such a decision would signal a dangerous withdrawal from this promising market.
Davis’s observations from the trade show underscore Australia’s advantageous position. “Our pavilion at SIAL, we had 300 square metres of space and we were swamped with buyers the whole time,” he remarked, signifying a strong interest in Australian beef products.
The dynamic relationship between economic factors and evolving consumer tastes underscores Australia’s competitive advantage within this essential market. As the demand for premium-grade meats increases, Australia is poised to meet the changing tastes of Chinese consumers.
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