FARMERS within the Victorian temporary blue-tongue virus zone could be shut out of the lucrative Chinese dairy export heifer market for up to two years, a major exporter has warned.
The Federal Department of Agriculture and Water Resources confirmed the Chinese Government had been invited to visit Australia to discuss the matter but noted “trade negotiations are complex and can take time”.
Landmark International general manager Andy Ingle said although the temporary BTV zone was removed in December, this hadn’t been recognised by China and he feared it could be up to two years before the major trading partner returned to purchasing cattle from this region.
“The industry and those who understand the Chinese warned from the moment this took place that this sort of thing was highly likely to happen,” he said.
“The temporary zone might be gone, but the Chinese don’t recognise it and as far as our market goes that means it remains in place.”
Last October farms within 100km of Echuca were placed into a temporary BTV zone following positive results to BTV testing in cattle destined for export. Previously Victoria and southern NSW were classified as “BTV-free” and could export to countries which where “BTV sensitive” such as China.
The temporary zone was lifted in December.
Australia’s dairy cattle export was worth $101 million last year with China taking 68 per cent of the total 51,969 exported. The next largest market was Pakistan at 13 per cent of dairy cattle exports.
Mr Ingle said he understood the Australian Government had recently sent two letters to the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China about this issue with no response. He believed this demonstrated China wanted to wait two years before purchasing cattle from this region, which was general practice after the identification of BTV.
An Australian Department of Agriculture and Water Resources spokesman said negotiations were continuing with China, so it was not appropriate to comment.
Initially the BTV zone didn’t impact the supply of Holstein heifers as Landmark had adequate numbers to fill export orders to China, but Mr Ingle said it was being felt now.
“(Our supply) is spread equally (across Victoria) and taking one region out, at the end of the day, it’s a huge impact on supply,” he said.
“We are seeing it tightening now and are very worried and cautious.”
“Importers understand about the temporary zone and the impact it is having, but a full shipment of dairy cattle is around 4000 cattle so you source 5500-6000 cattle. With a number of exporters in the market at any one time, the numbers for supply are not available with a third of supply cut off.”
Mr Ingle said Australian cattle were “well sought after” and he was confident buyers would return. While there were other export destinations for heifers, Mr Ingle said China was by far the major importer and “no market could take that place”.
Landmark said it wanted a full review of how “(Australia) got to this position” with the BTV response.
Scott Lord, manager of Dairy Livestock Services, which sources export heifers, said there had been flow-on effects from the BTV temporary zone, including impacting other cattle markets.
“It has certainly reduced turnover opportunities,” he said.
“A large percentage of dairy farmers in that (area) use selling export heifers to supplement cashflow, reduce debt and they sell young cattle to replace them with in-milk or those about to calve.”
Mr Lord said dairy farmers from that region looking to sell young or unjoined dairy heifers and wanting to get a “similar sum of money” would need to increase the weight or age and sell into the restocker market.
Newbridge dairy farmer Jon Holland, Holloddon Holsteins, farms within 10km of the temporary BTV zone. Selling export heifers is part of his business model and he says he may lose $30,000 to $50,000.
“I’m normally selling at between nine to 12 months and I used to get $1500 per head,” he said. “Now the major income stream will be the local market and that can’t match that sort of money.”
Mr Holland said the next best option would be to sell those heifers at two years old for $1800-$2000, but demand and price would be determined by the volatile market impacted by season.
“I have a small farm and small dairy. I can’t just increase numbers like that, I’ll be at the mercy of the market,” he said.
“I say the local market is volatile at the moment; what will it be like in 12 months when all these heifers hit the market?”
By: SIMONE SMITH
Source: The Weekly Times