Beef Products Exported Almost Doubled
China is a significant trading partner with Australia, purchasing large amounts of iron ore, coal, and now beef.
The Meat and Livestock Association of Australia (MLA) released figures that revealed the value of beef products exported in the 12 months up to October 2015 rose to over $86 million. That’s up from a little under $44.65 million, which is almost double.
The demand from the Chinese market has also caused a large uptick in cattle-based commercial real estate.
HSBC Holdings Chief Economist Paul Bloxham notes that the increase in demand is due to an increased desire in China for luxury foods. As quoted in the Sydney Morning Herald on 9 February 2016, he indicated that as countries get wealthier, their diets change, and they desire higher-quality foods. He also indicated that there are many more people in China who are entering the middle class and the preferences are shifting quickly.
According to the MLA, the majority of the beef exported from Australia ended up in restaurants. This may be attributed to the Chinese’s busy lifestyles and unfamiliarity with preparing red meat. In China, beef is still considered a luxury, but as the middle class continues to grow, it’s likely that the demand for Aussie cattle will increase.
Increased Interest in Rural Real Estate
With predictions of increased beef demand on the horizon, many are considering purchasing or expanding their rural real estate. A rebounding cattle market could mean big benefits for cattle farmers who have the cattle herds to meet it.
In its 2015 outlook, The Australian Bureau of Agricultural and Resource Economics and Science (ABARES) predicted a persistently strong cattle outlook for 2016 through 2018.
For savvy rural real estate investors, this might be an excellent opportunity.
If you have questions about rural real estate investment, contact us to speak to a qualified real estate agent. We’d be happy to offer advice.
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