August 13, 2004

 

 

New Zealand Cow Exports To China Soar

 

A Kaiapoi company in New Zealand that has transported about 13,000 dairy breeding cattle to China in eight months is taking orders for the next shipment due in November.

 

Xcell Cattle Exporters has sent the last three boats to China from New Zealand and expects annual turnover of $30.2 million.

 

Holstein friesian heifers and yearlings are shipped out mostly from Timaru to mainly northern Chinese provinces for new and developing dairy farms.

 

Xcell managing director Ian MacDonald said the Chinese trade had created new opportunities in calf rearing, cow finishing and feed supply for New Zealand farmers. Other spinoffs were in transport and health testing, he said.

 

"This time last year you could buy an animal for $550, and at the moment the prices are $900," he said. "This is a premium of about $350 per animal, as a result of this export business evolving."

 

He said the company was buying for a sixth shipment now and contracting forward for more shipments into next year. "The cattle are starting to roll in."

 

The company emphasised that its cattle were not going to China for slaughter, but rather to found dairy herds.

 

MacDonald said Xcell had gone out of its way to ensure animal welfare during the 15-day voyage by employing an outside nutritionist and veterinarian. A special feed pellet commissioned by the company and developed by Winslow Feeds in Ashburton ensures animals arrive safely, he said.

 

"In the last two shipments of 6000 cattle we have not lost an animal. And we have nutritional and veterinarian back-up so that the animals arrive in pristine condition."

 

MacDonald said the Chinese had previously bought cattle from North Americans, who played a large role in setting up China's infrastructure. But the Chinese were increasingly looking at New Zealand's grass-fed genetics.

 

New Zealand's smaller cows were still producing about 8000 litres of milk a year on outstanding alfalfa crops and some of the best corn crops in the world, he said.

 

A 20 per cent increase in shipping costs last year had been absorbed and the fluctuating dollar would always have some effect, but the overall outlook was bright, he said.

 

An electronic tag on all cattle shipped by Xcell is loaded with information, including their disease-free status, to reduce human error, and this has given Chinese buyers and authorities confidence.

 

About 60,000 dairy cattle have been exported to China. Demand from the Chinese provinces indicated that export prices would continue through to next year, he said.

 

"Everybody talks about the potential of China, but very few Chinese children drink milk. You only have to make the difference of 20 million to 30 million new drinkers and that is a huge market. The thing to take on board is that it is improving the health of a village and the economics of a village because more children are drinking milk."