Do We Export Beef to China
Photo: Markus Winckler
South Africa's current beefiness product offering to the Chinese market is about every bit awkward equally a cow on rollerblades. This is the opinion of Dr Dong Wang, director of China Marketing Solutions, who spoke at the LRF Aldam Stockman School in the Free State in October.
Wang, who was born in Red china but now lives in Australia, has been actively involved in meat importation into China since that state allowed such imports.
His message to South Africa's beefiness manufacture is that if information technology wants to concenter the attention of consumers in Red china, it has to streamline and ameliorate its consign strategy. And the first step to this is to sympathize the target market.
The Chinese meat market
Co-ordinate to Wang, meat consumption in Prc is skyrocketing, and this includes beefiness, although information technology comprises a relatively small share of the market.
"China'southward meat consumption is dominated by pork," says Wang. "Poultry, beef and lamb business relationship for less than ten% each."
For decades later the Chinese Communist Revolution of 1949, inhabitants of the country were forbidden to slaughter cattle for beef consumption as there was a lack of labour, and cattle were useful for agronomical production, Wang explains.
"The beef available for consumption came from [draught] animals, so their muscles were tough." Consequently, beefiness is usually tenderised, cut upwards, and consumed in a traditional stew.
In recent years, hotpots have also become popular. Likewise known as soup-food or steamboat, hotpot is a flavoursome broth traditionally served inside a large metal pot. The goop is brought to the boil and left simmering for the elapsing of the meal.
"A third popular beef cooking way is barbeque, which has spilled over from Western cuisine," says Wang.
Mainland china's ain meat production
Mainland china's beef production has non been able to keep up with growing demand to the same extent every bit pork and poultry have.
"In the final 20 years, China's pork production has increased by 20 million tons," says Wang. "Poultry production has increased by x million tons. The [increase in lamb production] was tiny and the beef increase was even smaller."
This is due to a number of reasons. First, China does non have a good cow-to-dogie ratio.
"Therefore, the country doesn't have many young animals available for fattening."
Second, Chinese farmers take amend farming alternatives than beef cattle. "It takes a long time to raise cattle, and results aren't really comparable with pork or poultry," says Wang, referring to the animals' feed-to-meat conversion ratio.
"With pork and poultry, feed goes in and meat comes out. These unproblematic economics are driving the production increase in pork and poultry."
Another reason that Chinese farmers are non drawn to cattle production is the fact that Chinese consumption of beef is highly seasonal.
"Consumption is concentrated in wintertime, and specially before the Chinese New year's day, which occurs effectually February. Beef prices ordinarily peak annually effectually Feb and drib off during the summertime months. From July to Baronial, they choice up again," says Wang, adding that this trend has a commercial implication for anybody trying to export to China.
Frozen vs fresh meat
China is the world's largest beef importer.In 2020, it imported ii,ane 1000000 tons of beef, 23% of its beef requirement.
"Nosotros're running out of countries that tin can consign to China. I think Mainland china will bulldoze the global beef price in the foreseeable hereafter," says Wang.
Chinese beefiness imports are divided into two segments, frozen and fresh, with the 2 segments coming from "different sets of countries". Most frozen beef (40%) is imported from Brazil, followed by Argentina (23%) and then Uruguay (eleven%).
Wang says the reason for this is simply that "the South Americans have cheaper beef available".
Lygia Pimentel, CEO of Brazilian consulting business firm Agrifatto, agrees that Brazil'southward beefiness exports largely rely on this unique selling point.
"On boilerplate, Brazil's meat is xiv% cheaper than the global average toll of exported meat," says Pimental, adding that the state exports 26% of its meat to 109 countries and is the biggest exporter of the article.
Too being cheap, Brazil also has an fantabulous illness-prevention record.
"We haven't had an outbreak of foot-and-mouth disease [FMD] since 2005. Then, nosotros have our diseases under control at the moment."
Australia
Australia, another serious contender, has taken an entirely different approach to meat exports: it targets the loftier-quality end of the spectrum.
"70 per cent of Communist china'southward fresh beefiness imports come from Commonwealth of australia," says Wang. "It's mainly flown into the country."
One of the reasons Australian beefiness is preferred by Red china's high-income earners is that the country exports considerable quantities of Wagyu.
"They're also able to produce a lot of grain-fed animals," says Wang, adding that the Chinese savour beef from American and Canadian animals that have been rounded off in a feedlot for 230 days. "This produces highly marbled beefiness that'due south sought after in the high-end food service sector."
Jason Strong, managing director of Meat and Livestock Australia (MLA), says that Australia's meat export strategy is an overarching, x-year strategy focusing on producers, customers, livestock, surroundings, markets and systems.
"Our objective is to double the value of Australian ruby meat sales. To do this, our product must run across or exceed consumer needs and the focus must be on the area where nosotros take a competitive reward."
Commonwealth of australia has identified this advantage as the quality and attributes of its product. These include animal health and welfare, and ecology credentials.
Funding is crucial to obtain the goals that the industry has set itself, and at that place is currently a levy of AU$5 (R57,09) per head of cattle. The levy is allocated differently, however, in the case of grass- and grain-fed animals.
For grass-fed animals, information technology is distributed every bit follows: AU$0,92 (R10,50) for research and evolution, AU$3,66 (R41,79) for marketing, AU$0,13 (R1,48) for Animal Health Commonwealth of australia and AU$0,29 (R3,31) for the National Residue Survey.
For grain-fed animals, it is AU$ane,50 (R17,13) for enquiry and evolution, AU$three,08 (R35,17) for marketing, AU$0,xiii (R1,48) for Animal Wellness Commonwealth of australia and AU$0,29 (R3,31) for the National Residue Survey.
"Nosotros've recently [learnt] that Chinese consumers are placing a higher priority on [food] health [and] safe, quality and origins, all areas of Australian meat'south strengths," says Strong.
Market research has shown Potent'due south team that this is true for 75% of all Chinese consumers. MLA conducted a Communist china COVID-19 impact survey that showed the post-obit
to be the top ten considerations when purchasing beef: safety; the fact that information technology helps boost the body's immune system; quality; the country of origin; certified organic; easy to buy; freshness; balanced nutrition; no antibiotics; and no added hormones.
The problem with local beef exports
South Africa has been exporting beef to Prc since the Chinese government gave 3 abattoirs the light-green light to do then in February 2017. In 2018, a full of half dozen 800t were exported, says Wang.
"That's almost 300 containers, and about one% of the total beef import into China."
An FMD outbreak in Southward Africa resulted in a Chinese importation ban between March and July 2018. Although local farmers are bemoaning the loss of their FMD-free status, they should be concerned about more than just this, Wang cautions.
"The typical beef product offer from South Africa is quite awkward," he says. "Typically, beef is rounded off for 120 days around the age of xviii months. This is a weird value, because the beef cannot become to the high end of the food retail segment. Chinese consumers wait at least 180 days of finishing."
This meat, explains Wang, too cannot become to retailers, equally South Africa's low consign book cannot guarantee supply consistency.
"And so, a higher export book would be needed if South Africa'south beef is to exist properly branded and marketed in China."
Lower prices
Currently, most of Due south Africa'southward beef exported to China is sold to the food service sector, says Wang.
"Information technology tin't be sold to the high end, so it ends upwards in the lower stop, typically in the south-western parts of Cathay. And we need to remember that the lower cease of the nutrient service sector cannot pay much for beef."
An example of the prices received for South African beef in China tin can be seen in the table to a higher place. Co-ordinate to Wang, all South African sales look similar to this.
He adds that Due south Africa needs to decide what its competitive advantage is.
"Is information technology quality, to produce high-end beef, or is information technology to dominate the loftier stop of the food service sector? Or is information technology a cost reward? My feeling is that South Africa falls into the middle, and that'south an bad-mannered position. A clear strategy is required.
"I don't remember there'southward a clear market segment that Due south Africa tin penetrate so that a make tin can be established, whether information technology'due south the retailers or the high stop of the food service sector."
Besides defining a clear vision and aiming for a ascent in export volumes, Wang says that exporters need to consider whether they desire to export all parts of the carcass or not.
Email Dr Dong Wang on [email protected], or visit mla.com.au or agrifatto.com.br
Source: https://www.farmersweekly.co.za/agri-business/agribusinesses/what-sa-still-needs-to-learn-about-exporting-beef-to-china/
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