A leading exporter of southern cattle to China says the trade has fallen away considerably this year and may not recover until 2025 at the earliest.

Image: SAILS

China has been a consistently reliable import market for dairy and beef breeding heifers from Southern Australia for several years, typically buying between 100,000 and 160,000 cattle per year.

However, only 38,000 cattle have been shipped so far this year, and almost all of those cattle were contracted in orders written last year.

Very little new contractual activity had occurred this year, Southern Australian International Livestock Services (SAILS) managing director Andy Ingle told Beef Central this week

Mr Ingle said the company has been forced to reduce staff numbers by four full time people due to the lack of trade activity and poor outlook for the rest of the year.

The lacklustre market conditions have removed a long-running and premium market for southern dairy heifers, with the lack of sales causing prices to drop substantially compared to where they stood last year.

Mr Ingle said it is understood one exporter has recently bought dairy heifers to fill a small export contract to China with prices believed to be in the $950 per head vicinity.

That compares to prices as high as $2600 per head this time last year.

It comes at a time when southern cattle producers are enduring one of their toughest seasons in memory, with dry winter conditions following a delayed autumn break and frosts.

At the same time there has been a 25 percent drop in heavy dairy cow prices according to MLA’s market indicator since the start of this year.

Mr Ingle said some dairy farmers would likely now be taking the opportunity to sell older cows which are still saleable and replace them with more of the younger heifers that are currently available and more affordable than they have been in previous years. However, dry conditions and the need to buy-in feed was also limiting such opportunities.

Mr Ingle attributed the downturn to a lack of demand for milk products in China due to tight economic conditions and an improvement in domestic supply.

“There is evidence that cattle there through genetic improvement and overall farming practice improvement on a per head basis are producing up to 20 per cent more than they have been over a five to 10 year period,” he said.

“That has also bought a lot more milk to the market.”

Export figures released this week by the Department of Agriculture show that 6677 cattle were exported from Portland to China in May.

Mr Ingle said that was a shipment SAILS undertook but one which was contracted back in late 2023.

“That was the last of our backed-up shipments, and there’s been little to no new contractual activity really across the market in 2024.

“In my view is that is going to continue throughout at least 2024, and could be well into 2025 on the market signs that we are receiving.”

Asked if there were alternative markets available, Mr Ingle said some cattle were going to South East Asian nations such as Indonesia and the Philippines but “only in small numbers”.

Earlier articles

Northern live export update: Vietnam demand boosts May trade 19 June 2024

Cattle export surge to China masks tough trading conditions 20 Feb 2024