Australian cattle farmers producing wagyu and Angus beef are bracing for impact as China implements a 55 percent tariff on beef exceeding a 205,000-tonne quota, effective January 1.
China’s New Beef Tariffs
China’s global trade restrictions come after claims from domestic farmers that beef imports were negatively affecting their profitability.
Robert Mackenzie, an Angus producer in NSW’s Hunter Valley, said the tariff would significantly harm his industry. “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.
Macka’s Australian Black Angus Beef, Mackenzie’s company, currently exports 26 tonnes of produce to China each month.
Mackenzie expressed concern that large processors would flood the Chinese market with lower-value cuts, utilizing the 205,000-tonne quota. He noted that high-end products, like chilled beef, Angus, and wagyu, currently comprise only 20 percent of that annual quota.
Once the quota is filled, expected around June or July, producers will need to find alternative markets for their products. “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,” Mackenzie said.
Mackenzie urged the federal government to collaborate with industry peak bodies to establish a fair quota access system, potentially allocating quota based on past export volumes. He warned that without such a system, there would be a rush to export to China before the tariff takes full effect, leading to stockpiling.
Impact on Australian Producers
Professor Ben Lyons, from the University of Southern Queensland’s Rural Economies Centre of Excellence, described the Chinese beef industry as complex, noting a decline in rural workers and an increase in larger herd sizes.
“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,” Lyons said.
Trump Tariffs Partly to Blame
Garry Edwards explained that China is dealing with a beef oversupply due to South American exporters being locked out of the US market following tariffs imposed by former US President Donald Trump.
“They’ve diverted massive volumes of beef and put it into China at very moderate pricing, which has obviously had an impact on that market,” Edwards said.
He believes Australia should not have been affected by the new tariffs, consistently supplying high-quality beef at competitive prices.
Razorback Ranch in NSW, which exports full-blood wagyu heifers to China, has seen trade slow in the past two years, according to owner Nick Togias. While the direct impact of the tariffs is currently unclear, Togias emphasized the continued strong global demand for Australian wagyu.
Simon Stahl, CEO of Casino Food Company, said his company would be significantly affected, with approximately 20 to 25 percent of its business, or around $100 million in gross value, tied to the Chinese market.
Stahl acknowledged that diverting exports to other markets would likely result in lower prices, negatively impacting both processors and farmers.
Price Cuts Expected
Meat analyst Simon Quilty, from Global AgriTrends, predicted Australian beef prices could decline in the latter half of the year as other major exporters seek 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.
Garry Edwards, chair of Cattle Australia, stated that while lower-cost products might find new homes in markets like the US or Southeast Asia, higher-end cuts would be more difficult to sell.
Edwards also suggested that Chinese consumers would ultimately bear the cost. “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. “Ultimately, what they’re going to do is push the price up domestically in their country for the high-quality marble beef that they buy from Australia.”
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