THE thriving live cattle trade is about to descend on southern Australia in a colossal way, heralded by the launch of the world’s largest and fastest purpose-built livestock carrier - a state-of-the art, nine-deck masterpiece owned by progressive Australian exporters Wellard Limited.
The awe-inspiring M/V Ocean Shearer, capable of carrying 20,000 head of cattle and worth US$90m, set sail off China last week following a ceremonious naming, dominated by talk of the lucrative doors about to be opened for producers of British breed cattle in Australia.
The Shearer’s first trip will be to Brazil to collect a shipment of lightweight bulls destined for Turkey, however Portland, Victoria, will be her longer-term base.
Following approvals last year of a live cattle trade to China, Wellard expects the Shearer to deliver at least two shipments of Australian cattle before the end of 2016.
While Elders has sent two plane shipments of live Angus cattle to China, a lack of infrastructure in the Asian economic hub has so far held back the business.
Chinese biosecurity regulations mean that all Australian live cattle can only be kept and processed in new feedlots and meatworks purpose-built for the trade and located no more than 50 kilometres from the coast.
In a joint venture with Chinese-owned company Fulida, Wellards is building two feedlots - 6000 head to start with but increasing to 15,000 - and an abattoir.
The facility, east of Beijing, is expected to be ready by the end of the year, and at least two other Chinese companies are also in the process of constructing similar coastal plants aimed at capitalising on the opportunity to bring in Australian live cattle.
The feedlots will initially fit the size of Wellard vessels the Ocean Swagman and Ocean Outback but the expansion will see the Shearer kick in.
Wellard chief executive officer Mauro Balzarini said his company’s investment in China and the Shearer ‘shows our confidence in the live trade industry to all stakeholders in Australia and around the world.’
“Live export has never been the mainstay in Australia but that is changing,” he said.
“In the next 12 months, China will start to take serious numbers - it will reach 700,000 to 1 million head very quickly.
“Forecasts are that China will eventually consume the same amount of beef per capita as Australia and given it has 1.3 billion people, that one million head from Australia will be a drop in the ocean.”
Wellards expects to be looking for mostly feeder cattle, 12-14 months, and British breeds.
Live cattle to China must also be free from blue-tongue disease.
Whether or not southern Australia is ready remains to be determined.
Mr Balzarini acknowledged ‘big promises have been made to southern Australian producers in the past that have not eventuated.’
His experience was that ‘you have to buy from Australian producers three times before they will consider the market as serious.’
Wellard’s chief operating officer Scot Braithwaite said the company purchased and shipped 7000 head of European cattle from Portland two years ago for Vietnam and ‘the industry down there has been very keen since for us to return.’
How will it affect the processing game in Australia?
Mr Balzarini says there is ‘space for everyone’.
However, to his mind, it may be just the domestic market that is left to Australian processors.
The simple fact was the cost of doing business in Australia was prohibitive, he said.
The cost of building the feedlots and abattoir in China was a seventh of what would be needed to do the same in Australia, he said.
Other industries had been through the process - beef was certainly not the first to send factory business offshore.
“The Australian beef industry needs to take advantage of live export, not fight it,” Mr Balzarini said.
“We are bringing to the industry new markets. We can sell your product at a better price, why not take advantage of that?
“Live export is the future for Australian beef - Wellard has invested more in the past decade on vessels than any processor has spent on an abattoir in Australia.”
Mr Braithwaite estimated 40 per cent of producers in Queensland would be unviable this season without live export.
Setting new benchmarks
NEW benchmarks in economies of scale, voyage flexibility and animal welfare have been set with the launch of Wellard’s M/V Ocean Shearer.
Built by the state-owned Chinese Ocean Shipping Company - the first livestock carrier completed by COSCO - the vessel was handed over in Dalian, China.
The Shearer, the fifth of the Wellard fleet, started with a sketch by hand from chief executive officer Mauro Balzarini.
One of his key purposes was to take ventilation to a new level.
More than 100 fans are onboard, with a 320 PAT (pen air turnover) refreshing air continuously where livestock are housed.
“The ventilation system is top class. We put most of our attention to this because it is so important to the comfort of cattle,” Mr Balzarini said.
“An enormous amount of intellectual property went into the design. Every pen has water, fodder and an air outlet.
“The easier we make it for the stockmen, the better the management of livestock on board will be.”
The size of the vessel was selected in order to meet the needs of the biggest markets Wellards ships to but not too big as to lose efficiency.
“We can allow the Shearer to sail not fully loaded and still be profitable,” Mr Balzarini said.
“Even at 20 to 30 per cent, it can be profitable if we have the right cargo.”
The longer the voyage the more efficient the ship becomes, he said.
At times, space on the Shearer will be leased to other exporters but typically it will carry only Wellard stock.
It will be manned by a crew from Croatia and the Philippines.
The Shearer will be able to supply cattle from Australia to northern China in 15 days.
The size and speed of the Shearer provides both flexibility and efficiencies as markets expand and distances increase.
“The beauty of our model is its flexibility,” Mr Balzarini said.
“If MLA says there are no more cattle in Australia, we go elsewhere.”
This year, the Shearer is expected to ship 100,000-plus from South America, which will be 25 to 30 per cent of its business.
Wellard is one of the top five largest exporters in South America.
The Shearer is far from the end of the Wellard story: already a sixth vessel is under construction in Croatia. The 12,500 square metre Kelpie is expected to be complete next year.
Dimensions of the Shearer
Length: 189.3 metres
Breadth: 31 metres
Gross tonnage: 36,028 tonnes
Livestock area: 23,500 square metres
Number of decks: 9
Draft: 8.85 metres
Freshwater capacity: 350 tonnes
Freshwater production: 800 tonnes/day from five reverse osmosis units
Fodder capacity: 3000 tonnes
Ventilation: Velocity greater than 0.5 metres/second across all pen areas. Greater than 100 air changes per hour.
Speed: 18 knots
Shan Goodwin travelled to China as a guest of Wellards.