What do you mean by "COGS"?
1. Live cattle prices are now cheaper in Australia than in China (even after the cost of transporting the Aussie cattle to China)
AND the cost of turning these young live cattle into processed beef are way lower in China:
2. Feed grain prices in Australia are at record highs and well above China and US levels. In Australia it is now more expensive to put a Kg of weight onto a steer by feeding it than to buy a Kg of fattened / finished cattle. So numbers of cattle in feedlots is now in decline which makes more cattle available for the live export market (see Beef Central article below)
3. Transport costs? From many parts of Northern Australia it is shorter, cheaper and more humane to transport cattle to Indonesia by ship than to transport them to the abattoirs in SE Queensland by truck (trucks lack ventilation and can't feed or water animals along the way)
4. China's labour costs in meat processing plants (abattoirs) are a fraction of that in Australia (which has the second highest minimum wage in the world) and the volumes are significantly higher in China. Read some articles about AAC's problems in its Northern Territory plant - it's the only abattoir in the north of Australia and it will probably be mothballed after losing $50m - another competitor to live exports hits the dust
I agree with your Australia being "efficient and sustainable" though. But this is only in producing disease-free, quality grass fed cattle in large swathes of marginal land. Most Northern Australia properties need to push young cattle out as quickly as possible to free up land/food for the breeders to enable them to produce offspring in the following season. These young cattle need to find a home - live export.
Loss eases, but still minus $88 in latest grainfed trading budget
By Jon Condon, 26 April 2018
Beef Central’s latest 100-day grainfed trading budget calculated this morning shows a marked improvement on our previous assessment, but a loss of $88 a head is still painful result, in anybody’s language.
https://www.beefcentral.com/lotfeed...l-minus-88-in-latest-grainfed-trading-budget/
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