Why Australian beef remains on shelves in China

As Australia's beef trade with China navigates the uncertainty of safeguard tariffs, Meat & Livestock Australia (MLA) is looking beyond short-term market challenges and investing in something more enduring: relationships.

Speaking on a recent On the Ground podcast episode, MLA Greater China Regional Manager Murray Davis outlined how a unique exchange program between Australian and Chinese red meat stakeholders was helping build understanding across both supply chains at a time when trade tensions remained front of mind.

"At these times, increasing mutual understanding and respect and friendship does little harm," Murray said.

The initiative was sparked by China's decision to trigger safeguard measures on Australian beef imports earlier this year. The safeguard imposed a 55% tariff once Australia's quota threshold was exceeded.

Rather than focusing solely on the trade implications, MLA sought an opportunity to strengthen relationships deeper within the industry.

With support from the National Foundation for Australia – China Relations, Chinese representatives spanning the entire supply chain were brought to Australia for an intensive look at local production systems.

The delegation included producers, lot feeders, processors, researchers, government officials and industry representatives who toured Australian cattle and sheep enterprises, feedlots, processing facilities and research organisations.

A return visit saw leaders from organisations including Cattle Australia, Sheep Producers Australia, the Australian Lot Feeders' Association, AMPC, AMIC and MLA travel through China to gain firsthand insight into the country's livestock industry.

The Australian delegation's journey stretched from Beijing through inner Mongolia and into major production regions, exposing participants to everything from village-scale cattle production systems to large processing facilities and government agencies.

For Murray, the value of the exchange was clear.

"There were very, very strong relationships between export sales managers and procurement people on the import side, but beyond that the linkages were quite weak," he said.

The visits revealed strengths on both sides.

Chinese participants were impressed by Australia's genetics, integrity systems, disease-free status and ability to produce both grassfed and grainfed beef using abundant domestic feed resources.

Australian visitors discovered opportunities for learning within China's rapidly evolving livestock sector.

Despite often being viewed primarily as a market, China also demonstrated significant capability in breeding programs, automation and processing technology.

"They're very good on their automation and use of robots in processing," Murray said.

"I think there's definitely some potential for collaboration."

Tariffs reshape trade flows

Relationship-building remains a long-term priority.

The immediate issue facing the industry was safeguard tariffs, which impacts on Australian beef exports to China had been significant.

According to Murray, export volumes were currently running 70–80% below the same period last year.

Frozen beef trade had been particularly affected, although surprisingly, chilled beef had proven more resilient. 

Premium retailers including Costco and Sam's Club continued to stock Australian chilled beef despite higher prices.

The products remained visible on shelves and carry Australian branding to attract consumers willing to pay a premium.

"We haven’t disappeared from the shelves," Murray said.

"There are people there that really do value that Australian product."

Behind the scenes, however, the market was dealing with considerable uncertainty.

Industry participants were reportedly holding large volumes of product in cold storage and bonded warehouses, waiting to see how tariff settings evolved and positioning for a potential influx of trade when quota arrangements reset on 1 January.

Murray believed substantial volumes of Australian beef could enter the Chinese market immediately after the reset.

This would include product currently held in storage, as well as cattle already on feed for future export programs.

"It's the first year this has happened and we've got no precedent really to go on," he said.

Quota negotiations remain uncertain

Another closely watched development is the possibility of Australia accessing unused quota allocations from other exporting nations.

Recent discussions involving Uruguay had attracted industry attention, although Murray cautioned that any potential transfer was likely to involve relatively modest volumes.

While several countries including the United States, New Zealand and Argentina have significant unused quotas available, any agreement would require support from both participating countries and Chinese authorities.

"The whole purpose of the safeguards mechanism was to reduce imports," Murray said.

For now, industry participants remain in a holding pattern as negotiations continue behind closed doors.

Showcasing Australian beef in China

Despite market headwinds, MLA's marketing activity in China continues at full pace.

Two major events will dominate the calendar throughout the remainder of the year.

The first is the China International Import Expo (CIIE) in Shanghai where MLA and Australian exporters will showcase Australian red meat through tasting events, cutting demonstrations and live-streaming activities.

Shortly afterwards, Food & Hotel China will host MLA's annual Shanghai Butchers Challenge, bringing together 12 teams of butchers to compete in an event designed to highlight the versatility and quality of Australian product.

For Murray, the ongoing engagement reflected a broader reality about doing business in China.

"Nothing is really ever business as usual in China," he said.

Amid changing policies, fluctuating trade flows and ongoing uncertainty, one thing remained constant – the importance of maintaining strong connections between industries on both sides of the relationship.

As Australia's red meat sector works through another complex chapter in the China market those connections may prove just as valuable as any trade agreement.