Jet set: Cattle fly out for China

This afternoon's history-making flight also delivers a fresh definition of flying cattle-class from Australia to China on a 747 jumbo jet, he said.

“The way prices are going at the moment, the cattle will be travelling above deck at the pointy end of the plane in first class and the passengers will be in the cargo section below,” the Federal Agriculture and Water Resources Minister told Fairfax Media.

Mr Joyce’s witticism helped launch the first shipment of live slaughter-cattle bound for Chongqing in Southwest China which departed Melbourne’s Tullamarine airport this afternoon.

It’s the first and only export permit granted by his Department under the historical cattle health protocol agreement, signed between the Australian and Chinese governments in July.

Facilitating agents Elders International Trading are treating it as a trial shipment and will undertake an extensive supply chain review with the two governments, once completed.

The 747-400 cargo plane is carrying about 150 steers - principally Angus and Angus-cross - during the 12 hour journey to Chongqing, in Southwest China.

The steers weigh about 480 to 600 kilograms each and were acquired over the past fortnight direct from Albury and Holbrook farms, in southern NSW and properties in northern Victoria.

After the Chinese government countersigned the highly anticipated Australian feeder and slaughter cattle import health protocol, Mr Joyce forecast the new market would start off slowly but could reach one million head per year in a decade.

This week, he said the first air-shipment of cattle under the new agreement indicated Australian agriculture was once again operating in another Asian market with “immense growth potential”.

“Protein is a premium product and there’s a global deficit of it,” he said.

“This new market gives people on the land the capacity to say to their bank, to the people who want to buy their place, to their sons and daughters, that there’s a big future in the beef market and good sustainable returns over the long-term.

“We’ve always fought for better returns to the farmgate and we’re delivering better returns to the farmgate.

“The China story will be one of the big ones over the next decade but it will sit there with the story of Vietnam, the story of Indonesia, the story of Malaysia, the story of Saudi Arabia, the story of our Pacific neighbours and the story of Japan and Korea.

“Australian beef is a premium product and the premium article and it’s the product our customers knock you over to get to.”

Elders International general manager Cameron Hall told Fairfax Media China’s preference was to buy young black steers from Australia and the prices they’re paying aligns with those in Southern Australia’s strong slaughter cattle market.

Mr Hall said the exported cattle would be processed by one of China's largest beef producers, Chongqing Hondo Agriculture Group, which established a purpose built quarantine facility, after the health protocol agreement was ratified mid-year.

He said the quarantine facilities can hold up to 700 head which would provide a supply chain capable of receiving Australian on a regular basis.

“Since the announcement of the approved protocol we have worked closely with the importer, Hondo, to prepare in readiness for their receival of livestock,” he said.

“That has included inspection of the facilities, continued communication around the requirements of Exporter Supply Chain Assurance System (ESCAS) and ensuring those regulations can be met and exceeded.

“(Elders) takes this responsibility very seriously as a means of initiating the ongoing and potentially quite significant trade in feeder and slaughter cattle between Australia and China.”

Under the agreement, slaughter cattle must be processed within 14 days of arrival in China after being held in quarantine for three days, with the quarantine facility and abattoir both approved under ESCAS.

Mr Hall said the first shipment also involved additional supply chain conditions, including daily inspections of cattle during the quarantine period.

“There is cautiousness around the initial introduction of Australian slaughter cattle into China to ensure the health requirements are fully met and that there is no danger to the domestic herd,” he said.

“The trade of feeder and slaughter cattle will develop from this point on and will become an important trade for Australian exporters and producers – but it won’t be a trade that overnight suddenly demands hundreds of thousands of cattle.”

The shipment also comes with federal parliament due to vote on ratification of the China-Australia Free Trade Agreement (ChAFTA) in coming weeks which will aim to fully eliminate tariffs of 12 to 25 per cent on boxed and frozen beef, in four to nine years.

ChAFTA will also cut all tariffs on live animal exports within four years, including the 10pc tariff on live cattle – but pure-bred breeding cattle already enter China duty free.

Australian agricultural exports to China, the nation’s biggest market, were valued at about $9 billion last year with beef exports hitting 128,000 tonnes and worth $655 million.

China was also Australia’s second largest market for live animals last year worth $254m comprising about 118,000 head of breeder/dairy cattle valued at $206m.

With global population forecast to grow by more than 2 billion over the next 35 years, ABARES predicts China will account for 43 per cent of all growth worldwide in agricultural demand to 2050.

The OECD says beef will also be China’s fastest-growing import sector as food producing resources like arable land and water diminish.

Mr Joyce said Australian beef was vital to supplying China’s growing food demand as the nation’s middle class population rapidly expands and refines its taste for protein.

“Once people have money they don’t want to wear a plastic tie they want to wear a wool or silk tie,” he said.

“Once they’ve got a bit of money they don’t want to eat peanuts or lettuce – if they want to make a statement they eat beef and that means you have arrived.

“And the bigger and more substantial the cut, the more it represents your position in society.”

Mr Joyce said he would be returning to China this year to hold further meetings and agricultural trade talks, with his counterpart Minister Zhi Shuping.

Elders chief executive Mark Allison acknowledged the milestone, recognising the ongoing efforts of Australian and Chinese authorities and industry bodies to increase market opportunities for Australian producers.

“The opening of feeder and slaughter markets will drive competition and demand for Australian cattle, creating new opportunities for exporters and producers alike,” he said.

“As Asia’s demand for red meat increases, our ability to foster positive trade relationships with China and remain internationally competitive is vital for Australia’s agricultural industry.”

Australian Livestock Exporters’ Council (ALEC) chief executive Alison Penfold sad a lot of work went into negotiating the health protocol with China and staff at the Department’s Animal Biosecurity and Live Animal Exports division, embassy officials and staff in Meat & Livestock Australia and LiveCorp’s Live Export Program all needed to be thanked.

“This first shipment is testament to the resolve of industry to pursue the China market backed by significant interest from commercial parties in China,” she said.

“I congratulate Elders for getting out of the starting gate first.

“I think the shipment is a signpost of good things to come, including the expansion of Australia’s ability to supply red meat products to meet growing Chinese demand."