Australia creates $2 billion agribusiness opportunity with China trade deal

Following a string of free trade agreements with key partners in the Asia-Pacific region, the Australian government has more good news for beef producers: Another deal with China.

Specifically, the agreement opens the door for Australia to become the first live cattle exporter to the Asian country, with Agricultural Minister Barnaby Joyce saying the transactions could amount to $2 billion over the next ten years.

The cattle will be exported for slaughter in China, responding to the nation's growing market for meat. For their part, exporters will need to adhere to specific requirements for preparing their shipments. In particular, the cattle must not have any hormonal growth promotants (HGP), can't be pregnant and need to have resided on the farm of origin for at least three months.

"I was very pleased today to sign the agreement of health conditions for trade of Australian feeder and slaughter cattle to China - now it's over to my counterpart, Minister Zhi Shuping, to sign on the dotted line and finalise the agreement between our two nations," Minister Joyce said.

"Over the past five years we've had a significant trade in breeder cattle with China, primarily for dairy heifers. Now, I'm pleased to announce we are a step closer to the commencement in trade in live slaughter and feeder cattle to China.

These conditions address some of China's concerns, which initially held back the deal from progressing. Now, Chinese and Australian animal health experts are working on finalising the agreements on certification requirements for the exported cattle. From there, the industry can begin laying the groundwork for commercial and Exporter Supply Chain Assurance Scheme arrangements necessary to begin trading.

This deal is even more important considering exporters recently received disappointing news that Indonesia would import far less live cattle than previously expected, reducing from 200,000 to 50,000, the Australian Financial Review reported.

While new deal with China could help to mitigate the losses from the Indonesian market, farmers and agribusinesses always need to be able to respond to fluctuations and risks in their operations. From acquiring the necessary farm insurance to keeping an eye on emerging opportunities, maximising agility and resources will help enterprises increase their stability.