Australian Agricultural Company expects the beef industry to benefit from the government’s free trade deals with Japan and South Korea.
The federal government’s free trade agreements with Japan and South Korea will benefit Australia’s beef industry over time, the nation’s biggest beef producer says.
Australian Agricultural Company (AACo) chairman Donald McGauchie says AACo hopes to gain exposure to rising incomes in Asia and the associated rise in demand for premium food.
“The federal government’s recently announced free trade agreements with Japan and the Republic of Korea are welcome and will benefit the Australian beef industry over time,” he told AACo’s annual general meeting in Brisbane on Thursday.
Mr McGauchie said the free trade deal with South Korea, signed in February, would help protect Australia’s beef sector from increased competition from the United States.
The US has a slight tariff advantage over Australian beef due to America signing its own free trade deal with South Korea in 2012.
But the Australia-South Korea agreement would ensure that Australian beef prices do not fall further behind, he said.
South Korea is AACo’s largest export beef market, accounting for more than 20 per cent of the company’s annual beef sales.
The Japan-Australia free trade deal, announced in April, would stimulate Australian beef exports by dropping tariffs in the first year by eight per cent on frozen beef and six per cent on chilled beef.
Mr McGauchie also said AACo’s $91 million abattoir under construction near Darwin was on schedule to be commissioned in two months’ time.
Meanwhile, AACo has sold more boxed beef in the first three months of its fiscal year than ever before.
Presentation slides shown to shareholders at the annual meeting revealed it sold 2.6 million kilograms of Wagyu beef in the three months to June 30, up 23.8 per cent on the same period a year earlier.
Sales of shortfed and other boxed beef climbed 70 per cent to 2.9 million kilograms.
Prices for boxed beef also lifted.
AACo said that good grass quality on cattle stations in northern Australia had enabled cattle to be kept for longer so they could gain extra weight, before being transferred to feedlots.
Prices for live-export grassfed cattle had been favourable at the start of AACo’s fiscal year, but market access had been difficult due to import permit delays.
Prices had eased in recent weeks as new permits were released, but AACo had forward-contracted live export sales at good prices.
Shares in AACo were 0.25 cents higher at $1.2625 at 1220 AEST.