China’s Beef Bombshell: Aussie Producers Bracing for ‘Catastrophic’ 55% Tariff Blow
- Australian wagyu and Angus beef producers are facing a devastating 55% tariff on exports to China, sparking fears of a catastrophic impact on the industry
- The tariff, which came into effect on January 1, is expected to squeeze prime beef out of China and into other markets, where prices are likely to plummet
- Producers are warning of a ‘rush to the door’ as big processors flood the Chinese market with cheap cuts, leaving high-end products struggling to compete
- Analysts predict Australian beef prices could drop in the second half of the year as global competition grows, with 600,000 tonnes of beef needing to find a new home
Australian cattle farmers producing wagyu and Angus beef are bracing for a challenging year ahead, as China’s 55% tariff on beef exports exceeding the 205,000-tonne quota threatens to decimate the industry.
NSW Hunter Valley Angus producer Robert Mackenzie said the tariff would have a ‘detrimental affect’ on his industry, warning that big processors would flood the market with cheap cuts, leaving high-end products struggling to compete.
‘There would be no way that you’d be selling any product into China once that tariff comes into play, so it’ll be a little bit of a mess,’ he said.
Mr Mackenzie’s company, Macka’s Australian Black Angus Beef, exports 26 tonnes of produce to China a month, but he fears the tariff will force him to reallocate his products to other markets, where prices are likely to be lower.
‘Naturally, when we reach out to those other potential customers, they’ll straight away know that the tariff has taken effect on Australian produce and they’ll play a little bit of hardball,’ he said.
Professor Ben Lyons, from the University of Southern Queensland’s Rural Economies Centre of Excellence, said the Chinese beef industry was in decline, with rural workers drifting to cities for higher wages.
‘It’s another chapter in a long saga of dealing with China as an export country and a regime that looks to control its agrifood and geopolitical aspirations,’ he said.
Garry Edwards, chair of Cattle Australia, said the tariff would make it harder for Australia to shift its high-end cuts, warning that Chinese consumers would ultimately suffer.
‘They’re really doing themselves a disservice because if they don’t get it from us, they’re not going to get it from any other country around the world,’ he said.
Meat analyst Simon Quilty, from Global AgriTrends, said Australian prices could drop in the second half of the year as other major beef exporters look for new markets.
‘That’s 600,000 tonnes globally that needs to find a new home, so you are now competing with more beef because others are impacted in the same way,’ he said.