Chinese covet cattle stations

Matthew Cranston
The Australian Financial Review, 27 October 2014

China’s ravenous demand for Australian beef could soon lead to some major cattle station purchases, with one of several Chinese importers, Snow Dragon Group, looking to buy land.

Snow Dragon, owned by the Xuelong Industrial Group based in Dalian in northern China, has been importing about $7 million worth of high-grade chilled Angus beef from Australia every year for the last three years.

It is one of many that have seen the dollar value of Australian beef and veal exports to China surge 3273 per cent in the past five years, according to Meat and Livestock Australia.

Snow Dragon director of quality management Chen Hong, who oversees a 10,000-head feedlot in Dalian, said the company wanted to rapidly expand and “co-operate in a closer way” with Australia.

“Because supply is less than demand we had to start importing beef from Australia,” Mr Chen said through an interpreter. “We hope we can import more beef from Australia.

“We have a plan to purchase farmland in Australia soon. The details are to be decided by the board.”

The company’s move to buy farmland for breeding cattle fits in with a renewed drive by Chinese-based companies to invest in Australian agriculture.

A spokesman for trade for the Development and Reform Commission of the Dalian Government said the central government had encouraged Chinese companies to invest overseas.

“Many enterprises from Dalian have began to invest in other countries, including Australia.

“The forms of investment include purchasing farms, including cotton planting and livestock, [as well as] animal husbandry,” the spokesman said.

Already this year several Chinese-based companies have entered the Australian farmland market. Yiang Xiang Assets bought barrister Allan Myers’ Elizabeth Downs station in the Northern Territory, while Shanghai-based Orient Agriculture bought the cotton farm Undabri in southern Queensland.

Snow Dragon representatives would not give details on where or precisely when it would make its move, but with surging growth in demand for beef in China the company’s investment is likely to come soon.

Australia now accounts for 53 per cent of China’s total beef imports and ANZ director of agribusiness research Michael Whitehead has forecast that our beef exports to China could skyrocket to $130 billion by 2030.

Agricultural Minister Barnaby Joyce visited northern China in September, ahead of the finalisation of a free trade deal that will have Australia’s beef and cattle exports, and the Chinese restrictions on them, high on the list of negotiation items.

Matthew Cranston was in China for the China Australia Journalist Exchange 2014.