The West

AACo looks to Chinese  beef  market
AACo looks to Chinese beef market

The nation's biggest cattle producer, Australian Agricultural Company, is looking towards the growing market for meat in China as it reduces dependence upon Indonesia as a market for live exports of cattle.

AACo chief executive David Farley said the consumption of meat among Chinese was very low, but like the rest of the developing world, China was keen to move up the food chain and eat more red meat.

Mr Farley said AACo was already starting to experiment with sending frozen, quartered carcasses to China and also looking at sending live cattle to southeast China.

"It's low numbers at the moment, but it's starting to look extremely attractive," Mr Farley said today.

"I sense that by 2013, China will be a real market for live cattle from Australia."

Mr Farley said sending frozen quartered carcasses to China was cheaper than sending boned meat because the frozen carcasses required a lot less processing by more expensive workers in Australia.

He said AACo needed to ensure that the processing facilities in China for live cattle were of a standard that AACo would find satisfactory, and, more importantly, that the animals would be processed properly.

"A lot of the abattoirs will be new state-of-the-art abattoirs when we go into them."

Mr Farley said AACo did not wish to see a repeat of exported live cattle being subjected to cruelty in some overseas abattoirs.

The Australian government temporarily banned live exports to Indonesia in June 2011 after the ABC's Four Corners program broadcast footage showing cattle being mistreated by workers at Indonesian abattoirs.

The majority of AACo 80,085 live cattle exports in calendar 2011 went to Indonesia, but in the last six or seven months, AACo exported live cattle to seven countries, reducing dependence upon Indonesia.

Mr Farley said there was still resentment in Indonesia over the ban, which had disrupted Indonesia's food supply chain during an important part of their religious cycle.

"There's still a lot of diplomacy to be done," he said.

AACo on Wednesday unveiled a first half loss of $4.1 million for the six months to June 30, a major improvement on the $12.57 million loss it booked in the prior corresponding period.

Profit from continuing operations before finance costs and tax lifted to $4.4 million from $2.4 million.

The company said rainfall in March and April had ensured more than sufficient pasture to put herds across all properties in very good condition and help the cattle gain weight.

But cattle sales had been delayed to take advantage of the good pasture.

AACo said cattle prices had eased since December but were expected to firm in the second half of the year.

During the first half, cattle sales rose 13.7 per cent to $12.5 million, and herd numbers lifted 6.1 per cent 38,821 head.

Shares in AACo were one cent higher at $1.13 at 10.30am.

The West Australian

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