China is not only Australia's largest beef and sheepmeat customer, it is now the cornerstone of the global meat trade.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
With that comes weight and Australian beef exporters are feeling the brunt of that with four major processing plants suspended from supplying China this year.
That development, combined with the ongoing political tensions culminating with this week's intense talk from the Federal Government around military moves to prepare for an expected 'rise of China', has understandably left producers anxious about the future of a market that is contributing strongly to their prosperity.
Throw in the hike on the tariffs slapped on Australian beef arriving in China - even though that was routine as per trade agreements and happened last year with little consequence to volumes going into China - and there is quite a bit of unease.
Global beef market expert Tim Ryan, Meat & Livestock Australia's Singapore-based markets insight manager, says Australia is far less exposed than other key beef suppliers.
China has become a major customer, adding a lot of value to Australian beef exports, he said.
Last year China was Australia's most valuable red meat and offal export market, worth a combined $3.96 billion - up 93 per cent on the year prior. Two thirds of that value was derived from beef exports.
"However, it remains part of a competitive and diversified export portfolio. While continued access is very important, Australia is less reliant on the market than our South American competitors or the likes of New Zealand," Mr Ryan said.
China's 2019 all-time record protein import volume has led to an arguably precarious situation for the likes of Argentina and Uruguay, for example. This year, China has become even more central for some major exporters.
Mr Ryan reports China accounted for 60pc of Brazilian, 77pc of Argentinean and 34pc of New Zealand beef exports during the first five months of 2020. In contrast, China accounted for 22pc of Australia's beef export portfolio in the first half this year.
At the same time, China has been reducing its dependency on any one supplier by granting more countries access and approving export establishments, Mr Ryan said.
By the end of last year, China was importing beef from 26 countries, compared to just 10 in 2014.
"Even in the small but emerging high value chilled beef trade, China has increased the number of approved countries to 10 in 2019, up from just one - Australia - in 2015," he said.
COVID-19 and slower economic conditions aside, major bank analysts are forecasting the protein gap in China left by African swine fever's decimation of pork herds will provide a strong demand force for red meat for the remainder of 2020.
"African swine fever will continue to underpin Chinese demand for Australian sheep and beef exports, as consumers look to substitute pork with alternative protein options," Rabobank's Angus Gildey-Baird said.
Supported by an emerging middle class and supercharged by the spread of AFS, China has emerged as the largest imported beef market over the last few years, Mr Ryan said.
"Following the seasonal post-lunar new year lull and the first wave of COVID-19 disruptions, China pork prices have been rising since late May and the national benchmark indicator was up 88pc year-on-year last week," he said.
Year-to-May China beef imports were up 45pc on the same period last year, at 821,000 tonnes shipping weight.
China imports of Australian beef are up 35pc year-on-year - although figures are yet to reflect the trade slowdown from the four plants recently delisted, Mr Ryan said.
The big volumes led to Australia triggering the beef safeguard under the China-Australia Free Trade Agreement this week, which will cause the applied tariff to increase from 4.8pc to 12pc through the remainder of 2020.
The recent rise in COVID-19 cases out of Beijing is of some concern for meat demand in China, however Mr Ryan said imports remained strong through the initial wave across the country and subsequent lockdowns.
Fundamental meat shortages in China have so far overridden any demand shocks from COVID-19, he said.
MLA's managing director Jason Strong said the diversification of Australian beef markets and the favourable market access conditions Australia had forged have been critical to our ability to mitigate trade risk.
Still, demand for Australian sheep and cattle is increasingly driven by overseas forces instead of domestic, which is why the global economy and access to markets is integral to the health of the industry, according to Mr Ryan.
"Heightened trade risk for beef at the moment is a combination of some countries pushing back against the rules-based order that underpins trade and the rising US-China tensions," he said.
"As a relatively small player in the geo-political landscape, Australia relies on rules-based trade and the certainty it provides to underpin our exports.
"Institutions like the World Trade Organisation, as well as the many free trade agreements we've signed, have allowed Australia to expand our global export footprint and build a portfolio of customers around the world."
Start the day with all the big news in agriculture! Click here to sign up to receive our daily Farmonline.