Salinda Resort Phu Quoc Island

Australia’s Cash Cow


David Mann takes a look at how Vietnam’s appetite for beef has helped bring Aussie farmers back from the brink. Photos by Nick Ross 


In 2011, millions of Australians were shocked by images of animal cruelty. In graphic detail, one of the nation’s most reputable public affairs television programmes spent an entire episode uncovering the horrific abuse being inflicted on Australian cattle in Indonesian abattoirs.


After gaining access to Indonesian slaughterhouses, animal rights activists secretly filmed on mobile phones images of abject and horrifying cruelty — kicking, hitting, eye gouging and tail-breaking. Poorly trained workers inflicted gashes across the beasts’ throats, struggling to kill the animals.


Within the week, the government had moved to suspend all live cattle exports to Indonesia, a controversial decision that drew cheers from animal rights groups and the ire of cattle farmers across northern Australia, who argued the month-long ban would incur millions in losses and damage vital trade links.


Later, in a report by the Australian Broadcasting Corporation (ABC), Emily Brett, a farmer from Waterloo Station in the Northern Territory, said the impact of the ban on the once booming trade, was devastating.


“It just had a crippling effect on anyone involved in the industry and people involved in businesses that supply products to the industry... everyone was affected by it.”


Jakarta soon responded by imposing weight limitations on Australian cows above 350kg, resulting in an even more drastic surplus. And this came at a time when farmers were also grappling with rising inventory costs and increased competition from the US and India for Indonesia’s beef market, which had been the destination for 60 percent of Australian cattle exports.


To make things worse, in 2012 a crippling drought swept across central and northern Australia, exacting another heavy toll on cattle farmers. The nightly news soon flashed images of a new kind: farmers collecting dead cattle from pastures of cracked earth.


A Star on the Horizon


With an urgent need to diversify their export market, Australian farmers soon looked further afield to Vietnam. Here, they discovered a hidden gold mine.


Being ill-equipped to keep pace with surging meat consumption meant that Vietnam supplied only 3 percent of domestically-consumed beef. The rest arrived from overseas, either in frozen boxes or as living, breathing, mooing cows.


Vietnamese farmers also faced a wall of obstacles that had seen the country’s domestic beef production wane in recent years, namely the rising cost of cattle feed, poor access to water infrastructure and strict regulations on land management.


But it was a monumental demographic shift that truly underscored the potential of this new frontier. Vietnam’s cashed up middle-class were undergoing a massive shift towards meat-rich diets.


Tu Tho, a Ho Chi Minh City-based entrepreneur who has researched organic food markets across Vietnam, says the level of meat consumption has skyrocketed in Vietnam.


Indeed, statistics from the Food and Agriculture Organisation of the United Nations show a seismic shift has occurred in Vietnam’s consumption of meat, with annual per capita consumption rising from just 10kg in 1990 to almost 50kg in 2010.


“10 years ago families would sit down for a beef meal maybe once or twice a week. Now, parents are teaching their kids to eat it every day,” she says. “That’s a massive shift.”


Beefing it Up


With Australia’s own livestock partially exempt from beef tariffs, exporters went about nurturing a new live export market, investing heavily in Vietnamese supply chains that would guarantee long-term growth and a stable and secure market for cattle farmers down under.


Local partners such as Hai Phong’s Animex were also sought out as a means to safeguard demand and implement better standards around hygiene and animal welfare.


The result has been a gargantuan boost to Australian beef exports.


According to Meat and Livestock Australia (MLA), Vietnam has now become the second largest market for Australian live cattle exports, with an astronomical 12,000 percent increase from 1,500 head of cattle in 2011 to 181,542 in 2014.


Understandably (although maybe not so much in hindsight), these numbers have come as a complete shock to the industry. Earlier this year, CEO of the Northern Territory Livestock Exporters Association Ben Hindle described the numbers as “overwhelming”, given farmers had originally viewed Vietnam as a backup market to Indonesia.


“There was a need for a market, a secondary market, but it was never known at that point how big it was going to get,” he told the ABC last year.


Indeed, wander around the streets of any city in Vietnam, you’ll see just how big Vietnam’s appetite for beef is. Food stalls teem with beef-filled menus offering fresh bun bo and pho xao bo for as little as VND25,000, while everywhere from wet markets to supermarket chains, the selection of imported beef is expanding.


Local Operations


Some analysts have expressed concern that such explosive growth in demand for Aussie beef could overwhelm cattle growers down the track if new FTAs with China and South Korea see more cattle diverted to those markets.


For now, though, Vietnamese importers are still optimistic they’re in it for the long haul, with up to a dozen investing millions of USD in new infrastructure to support the influx of Australian cattle.


Red Star, which received its first shipment of Australian cows to it’s VND110 billion facility in Dak Lak Province last year, has already begun commercial production, with all of its staff trained by Australian experts to handle cows in accordance with Australia’s Exporter Supply Chain Assurance System (ESCAS) — a fact readily advertised on the packaging of Red Star’s meat products.


The flagship agricultural facility has also integrated a feedlot to sustain cattle for long periods after shipment. This is meant to minimise the time between when cows are slaughtered to when beef lands on supermarket shelves (something of importance, given that Vietnam’s poor refrigeration infrastructure necessitates cows are slaughtered in-country and sold nearby).


Red Star’s live export venture is also likely to become the template for other Vietnamese importers who want to build similar facilities to house Australian cattle and guarantee supply from Australian farmers in the long term.


The deputy director of the company’s live export project said the first shipment of Australian cows was an important milestone and showed just how important Australian imports have been for Vietnam.


“The local people were wondering where these big cattle came from,” he told ABC Rural. “The workers here were very happy. It was the first time they’d seen the cattle, very big and very healthy.”




What is Australian Beef?


Seems simple, right? Beef from Australia. But in Vietnam the line between Australian beef (bo Uc) and beef from Australian cows killed in Vietnam (also called bo Uc) has become muddied. And no, we’re not kidding. Even the price differential is an issue: beef from Australian cattle slaughtered in Vietnam is often sold at the same price as the imported version.


If you want to truly make sure your beef was prepared and packaged in Australia before being exported to Vietnam, then you need to go to a trusted supplier: Classic Fine Foods and Veggies operate throughout Vietnam, while the likes of Meatworks and Tra Vy does fully accredited beef for the market in Ho Chi Minh City.


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