AUSTRALIA’S beef industry should advocate strong trade links as the best way to coexist politically in the face of an intensifying risk of hostilities between China and the United States.
Trade analysts have warned it won’t be long before Australian agriculture exporters are forced to “pick a side” but experienced beef industry people say that should be resisted at all costs.
Producer David Crombie, former National Farmers Federation and Meat and Livestock Australia chairman, said Australia could not afford to lose either China or the US as a market for its beef - and as an industry should not be making a choice.
“Strong trade links make political connections better,” he said.
“Free and open trade is what we should be aiming for. It’s right for everyone on many levels and that is what we should be insisting on.”
Mr Crombie agreed with numerous other industry leaders that Australian beef exporters had very successfully diversified, placing them in a much stronger position as the US China cold war unravels than would otherwise be the case.
Brazil, India, Australia and the US dominate global beef supply, he explained.
“These four countries do two thirds of all beef traded and currently we are behind Brazil and India in terms of volumes sent.
“In terms of value, we are positioning ourselves at the quality end of the market because our cost base is high.
“Our industry is extremely reliant on exports so market access and choice of markets is very important.
“We export to over 100 destinations now and I feel beef is in a very strong position in that we do have such a spread.
“But some big markets - the US being one - are very, very important to us. We send a lot of grinding beef to the US but we are developing high quality markets into Japan and Korea and China is fast emerging in this space.
“It’s a natural focus for our beef and it is important to us.”
MLA’s general manager of international markets Michael Finucan said Australian red meat exports were far more diversified than many of its competitors, with not as much reliance on solely the US or China markets.
Australia has the best access to the US market outside North America - Uruguay has some limited access. But the US still only reflected 22 per cent of our export value in 2017. Australian export value to China was 11pc of the 2017 total. It peaked at 13pc in 2013.
In contrast, Brazil’s exports to China were 20pc, Argentina’s 31pc and Uruguay’s 40pc.
“We have seen in 2018 South American exports increasingly become China-centric,” Mr Finucan said.
“While the South Americans would feel the pinch if China’s economy slowed down as a result of a trade war, it’s not likely they would need to choose between the US and China, as they’re not present in the US.
“Interestingly, however, New Zealand may be the most exposed to any potential trade war, with 44pc of its exports destined for the US and 20pc to China in 2017.”