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Striving for Internationalization: A Visit of a Working Group of Shandong Animal Husbandry Expo to South Australia
2019-10-21

May 19, 2017

From April 24 to April 28 of 2017, three delegates of Shandong Animal Husbandry Association were invited to South Australia, introducing the group participation of the South Australian delegation in the 32nd Shandong Animal Husbandry Expo. South Australia’s Department of Primary Industries attached great importance to this visit; it arranged vehicles, accompanying persons and interpreters in advance for the delegates. Ms. Li Ye, Deputy Director of the Agriculture, Food and Wine Project, had a business talk with the delegates about the promotion of the Expo in enterprises. Moreover, she spent a whole day accompanying the delegates to visit relevant associations and enterprises.

I. The Associations and Enterprises That the Delegates Visited

1. Animal Husbandry Association of South Australia

Animal Husbandry Association of South Australia was founded in 2013. It was an organization similar to an association. As a division of the Department of Primary Industries of South Australia, it is one of the six self-managed non-profit social organizations in South Australia. Its main responsibilities include spotting the needs of members, providing guidance on production and legal services, and improving the word of mouth and reputation of the products. In addition, it cooperates with the organizations related to the transport of some ranchers and natural resource management to help members solve their worries. These aforesaid activities are funded by government subsidies. The ranchers pay $0.55 in tax for a sheep and $1.5 in tax for a cow. The government sets aside 10% of the animal husbandry tax collected to the association for the daily activities of the association. At present, the association consists of three full-time staff members. Andrew Curtis, who worked for the Agricultural Bureau of South Australia, is in charge of the association. Currently, the association has 3,100 members, which are mainly engaged in the production of beef cattle, sheep and goats. In South Australia, 80% of the livestock products come from the members of this association. The members have 2,500 sheep ranches and 1,520 beef cattle ranches. Most of the association members raise beef cattle and sheep at the same time. The association only involves in live animal breeding and wool production, and does not involve in the meat processing.

2. South Australian Dairyfarmers' Association

    South Australian Dairyfarmers' Association (SADA) was founded in 1936. Its members have 250 dairy farms. There are more than 50 dairy processing enterprises in Adelaide, mainly producing fresh milk and cheese. SADA pasteurized milk that the association started to produce two years ago is sold exclusively to the Chinese market. At present, the pasteurized milk is transported to Shanghai by air and sold to agents in Shanghai at a price of 30 yuan / kg. In Shanghai, it is sold at a price of 65 yuan / kg in Shanghai and its weekly sales volume reaches 4,000 liters. The association consists of three full-time members. Andrew Curtis is in charge of the SADA as well as the Animal Husbandry Association.

3. Balco Australia

Balco Australia was founded in 1990. It mainly produces exported oaten hay. In 1991, it began to export oaten hay to Japan. In 2008, it commenced oaten hay export to China, which marks that it became the first Australian company that exports oaten hay to China. According to the company's CEO Mr. Rob Lawson, the price of oaten hay is divided into five grades according to the indicators of water content, acid detergent fiber, and neutral detergent fiber, which varies from 270 to 335 Australian dollars per ton. At present, its export to China mainly cooperates with Shanghai Yanhua Smartech Group.

Exports of Oaten Hay from Balco Australia to China

Year

Balco

Australia

2008

1,000 tons

1,000 tons

2016

72,000 tons

207,000 tons

2017

50,000 tons

(a decrease because of fire)

240,000 tons

2018

90,000 tons

280,000 tons

4. Johnson’s

Johnson's was founded in 1923. It is a family business and has made it to the fourth generation. Its main business includes the production and sales of oaten hay and feed pellets. It has been cooperating with Cameron Hall and exports live cattle to China, and it is still planning to export beef and mutton to China.

Since 1950s, the company has exported its products to Singapore. In 1962, it established an oat milling facility. In 1976, it established a feed pellet processing plant, which is the first one in Australia. In 1988, it became the first Australian company that exports oaten hay to Japan. In 1995, it established a joint venture with Asahi, a Japanese company (the producer of Asahi Beer). In 2005, it established a hay drying and processing plant. In September of 2016, it established a feed pellets processing plant, which has an annual output of 200,000 tons.

Johnson’s has three factories. Its first plant is located in Kapunda of South Australia; the headquarters of the company. This factory is engaged in the processing of feed pellets and hay. Its products are exported from Port Adelaide. The second plant is located in Nhill of Victoria. It is engaged in total mixed ration (TMR) feed processing and exports its products from Port Melbourne. Its third plant is located in Horsham of Victoria; it is the office for the joint venture of Johnson’s and the Japanese company Asahi. It is a hay processing plant, and exports its products from Port Melbourne.

(1) Oaten hay export. The oaten hay for export adopts different specifications for the weight, including 25 kg, 35 kg, and 500 kg. Mr. Rob Lawson, the director of Johnson's, said that Australia exported 220,000 tons of hay to China in 2016 (Balco said it was 207,000 tons), of which 60,000 tons were produced by Johnson’s. Moreover, Johnson's plans to export 70,000 tons of hay to China this year. Its Chinese customers include AoYa based in Dongying, Bright Dairy based in Shanghai, Modern Farming, Yili, and Beijing Sanyuan. It also cooperates with Dongying AoYa and has built a forage research laboratory.

(2) Feed pellet processing. Its feed pellet processing plant in Kapunda, South Australia, produces feed that meets the needs of Australian and overseas customers. Its products are mainly feed pellets for beef cattle, cows, sheep, goats, and camels. Also, it produces granular high-fiber feed with oaten hay, straw, grains and by-products. The produced feed pellets is generally transported by container or truck with different specifications, which include 1 ton / bag and 20-30 kg / bag. In China, it cooperates with Inner Mongolia Youyu and has build a cattle and sheep feed processing enterprise.

(3) Live cattle export. According to Johnson's, Indonesia, Vietnam, Israel and China are the top four countries that import live cattle (including beef cattle and cows) from Australia, while the top six countries in terms of beef cattle import from Australia are the United States, Japan, South Korea, China, Israel and Indonesia.

On October 20, 2015, Johnson's exported live cattle for slaughtering to China for the first time by air. The exported live cattle were Angus, Angus crossbred cattle and Hereford cattle. A total of 150 cattle, each of which had a weight of 480 – 600 kg, were exported. Due to the climate difference between South Australia and North China, the transportation exerts an impact on the health and body condition of the cattle.

On February 4, 2017, Johnson's exported 1,195 live cattle to China by ship, each of which weighed 440 to 600 kg and had an average weight of 522 kg. They were Angus, Hereford, and crossbred cattle. The cattle set off from the south of Victoria and southeast of South Australia, and arrived at Shidao Port, Rongcheng City, Shandong Province, China on February 20, 2017. Under the extremely cold weather, the average weight of the livestock was 519 kg, which is 3 kg lower when the shipment commenced. In addition, four were dead during the shipment. When the cattle arrived in China, the quality of beef after slaughter was still good. This export was fairly successful mainly because feed pellets were also brought to feed the cattle under shipment, which is a lesson from previous export experience.

5. Woodlands Hill Grains

Woodlands Hill Grains is a family business. It was founded in 1928. Now it owns 4,000 hectares of land, most of which is used to plant oats, wheat and rape. It exports 20,000 tons of oaten hay a year, and plans to export 60,000 tons next year. It mainly exports oaten hay to South Korea, Japan, Mainland China and Taiwan; all its exported oaten hay is self-produced. At present, 50% of them are exported to China, and it has a distributor in Tianjin.

6. Peats Soil and Garden Supplies Pty Ltd

Peats Soil and Garden Supplies Pty Ltd is a a leading innovative recycler of organic material in South Australia. The Biobin system that it developed has been patented. Biobin system is a simple, safe and reliable organic waste treatment system. In particular, the treatment of perishable waste with the system can effectively reduce, or even eliminate the corresponding risks and hazards. The 2.0 FIM biobin is equipped with a small forklift (2.5 tons loading) or designed for a single operator in charge of a similar transport vehicle. When full of garbage, Biobin provides biological treatment services, and the processed organic residues can be dumped in appropriate places for composting, and the composting process can also be completed in a biobin. Biobins have different specifications, including 2 cubic meters, 4.5 cubic meters, 9 cubic meters and 20 cubic meters, for which the company can provide tailored solutions to customer needs. This system is suitable for the disposal of kitchen waste, dead poultry and excrement.

II. Preliminary Intention Formed by Both Parties

South Australia has a high degree of economic dependence on foreign countries, for which it attaches great importance to the export of local products and international market expansion. All the enterprises and associations that the Expo visited showed great interest in increasing the export of oaten hay, cattle, sheep, beef, mutton, and wine to the Chinese market by taking advantage of the unique geographical location of the ports of Shandong, large amount of grazing livestock, and big population. The director of each organization received the delegation of the Expo in person. They showed great interest in using Shandong Animal Husbandry Expo as a platform to increase their product publicity, promotion and marketing.

(1) Considering that Australia's large enterprises and corporations have Chinese agents, South Australia’s Department of Primary Industries has decided to set the medium-sized enterprises which are active in developing the Chinese market as key potential participants of the 32nd Shandong Animal Husbandry Expo, which will be held in October this year. It will help promote Shandong Animal Husbandry Expo by handing out English materials or spreading the materials via the Internet to these enterprises.

(2) According to the differences and demands in animal husbandry between the two sides, South Australia has directed their attention to the companies that export oaten hay, cattle, cow, beef, mutton, dairy products, and wine according to the needs of the Expo.

(3) South Australia’s Department of Primary Industries promised to organize and hold the activity “Introduction of Animal Husbandry and Promotion of Technology of South Australia” at the 32nd Shandong Animal Husbandry Expo.

(4) All the enterprises that the delegation visited said that they would attend the 32nd Shandong Animal Husbandry Expo held in Jinan in October this year in order to understand the market demand of Shandong Province and even the entire China. The International Department of the organizing committee of the Expo will follow up in time.

(5) The Expo will help Woodlands Hill Grains to consult Chinese governmental departments about exporting oaten hay from Australia directly to China.

III Suggestions

1. Through this promotion, the organizing committee of the Expo will make further contact with the Department of Primary Industries of South Australia, relevant enterprises and Chinese agencies of Australian enterprises. In this way, it is hoped that the officials, enterprises and other institutions of South Australia will have a more comprehensive understanding of Shandong Animal Husbandry Expo and Shandong Animal Husbandry Association, and have greater willingness to participate in the Expo. In addition, it is hoped that the two parties will have more extensive cooperation and exchanges.

2. Since the Department of Primary Industries of South Australia only has one staff member who is in charge of animal husbandry production while the organization the 32nd Shandong Animal Husbandry Expo is in the starting stage, it is advised to invite again South Australia’s Department of Primary Industries when contacting with South Australia in mid-May.

3. It is advised to invite South Australia to hold the activity “Introduction of Animal Husbandry and Promotion of Technology of South Australia” at the 32nd Shandong Animal Husbandry Expo. In view of the large number of participants in the Expo, the organizing committee can also hold South Australia wine exhibition and tasting events, such as “South Australia beef + wine tasting activities” in addition to organizing animal husbandry enterprises to participate in the Expo.

4. At present, Australian live cattle, beef and mutton are rather competitive in comparison with China’s in China. Australia is keen on the Chinese market. In the face of the competition from Australia and other countries, China should seriously ponder over how to create unique beef and mutton brands through the combination of yellow cattle of Western Shangdong Province, black cattle of Bohai City and other native varieties. In this way, it is hoped to improve the reputation of Shandong’s livestock products and its industrial competitiveness.

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