Its all about ag exports
OPINION: The Public Service in New Zealand between 2017 and 2023 grew rapidly from 48,000 to over 64,000, and this does not include the use of consultants.
Australian export companies are also sourcing heifers from other countries to meet the demand. The supply shortage has led to higher prices but the industry is warning these are not sustainable.
Elders International Group general manager Tony Dage says demand for heifers remains strong, particularly from China, and supply continues to be the key challenge. “We continue to source more cattle outside Australia to meet demand and this diversification of procurement will continue.”
New Zealand, Uruguay and the US are the main procurement areas outside south-east Australia; Russia, Pakistan and Turkey follow China as core customers.
Elders International Trading will trade about 70,000 dairy and beef breeding animals across the globe this year – about 40% more than last year. “We will move about 40,000 Holstein/Friesian cattle this year,” Dage says.
The price received by farmers has been increasing over the past two years. Recent dairy orders bound for China out of Portland, Victoria, have averaged A$1400 per head for Holstein cattle. China wants unmated heifers and the market ranges from 8-17 months old and 200-400kg live weight.
However, Dage warns current prices are not sustainable.
“Cattle pricing will, in my opinion, need to adjust back to levels that encourage our offshore customers to stay committed to us. We are getting resistance from offshore customers now and we need to be sensible to ensure the volumes continue and the market is sustainable.”
Elders International Trading is predicting the core Chinese market will remain solid over the next few years “assuming we see some of our costs of procurement reduce,” Dage says.
The Chinese Government is focused on pedigree and biosecurity. Dairy consumption in China is expected to double over the next decade as the country aims to be 80% self sufficient in food and agriculture. China is massively expanding its agricultural production, including subsidies for new farms and support for importing genetics to boost production.
Dairy Australia manager strategy and knowledge Joanne Bills says China accounts for at least 70% of Australia’s heifer export market and has increased its proportion of the market by nearly 10% over the past year.
China is building up its internal capacity and at this stage its production system is based on Friesian genetics, she says.
Elders International Trading says it is also receiving strong enquiries from new markets.
