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TRANSCRIPT:
Continuing a family tradition that began in the late 1800s, Robert Mackenzie raises Black Angus cattle for sale locally and worldwide.
"China is a key part of our operation, they're taking roughly about 10 per cent of our production every month. And we're supplying a high-quality product from paddock to plate. And Australia has worked extremely hard to build that trust in China. Personally, I've been to China 16 times in ten years, so that shows our commitment to China."
Chinese television has even featured a live cross to Mr Mackenzie’s Port Stephens property, promoting sustainability.
"To be featured in China TV, where 80 million people watched us - my family, my father - cook Australian red meat in the paddock right here is humbling, but that goes to show that China values our quality beef."
However, from January, China’s new rules will add a 55 per cent tariff to Australian beef imports exceeding specific quotas.
The Australian Meat Industry Council predicts a financial hit of up to $1 billion, as CEO Tim Ryan explains.
"A billion dollars is a lot of beef to redirect at relatively short notice and particularly for beef supply chains that aren't just a short-term decision. These animals have grown over multiple years and produced for certain markets. The last time I looked, there's not another China out there on the world market, so it's really hard to replace a destination with the scale and wealth of consumers as China."
Australia exported almost 300,000 tonnes of beef to China last year.
Mr Ryan says the new tariffs may cut that by a third.
"Australia's become a major supply of beef into the China market and over the last couple of decades, Chinese consumers have learned to love Australian beef. So, it'll hurt Australian producers that have targeted the China market specifically and they're the producers that will have to, I suppose, reconsider their business model going forward."
To protect its local industry, China has capped beef imports from Australia and several countries for the next three years.
"Under these new trade measures, Australia will be largely limited to trade about 205,000 tonnes of beef into the China market before 55% tariffs are triggered, which would largely make trade prohibitive for many exporters beyond that."
Charcoal Chen is a China-based sales manager for an Australian cattle farm, with more than 20 years’ experience.
He expects exporters of premium beef like Black Angus and Wagyu to be hardest hit.
"Structurally, lower-end grass-fed products are not heavily affected. The biggest impact will be on mid-to long-term grain-fed products, such as Wagyu, where volumes are relatively large."
And that’s forcing producers like Robert Mackenzie, who has cattle already fattening in feed lots, to urgently seek new markets.
"Our cattle are grass fed, grain finished. But those animals go into the feedlot for up to 200 days. And this is definitely put a speed bump in front of our operation that again, we have to scramble to work out exactly what are we going to do?"
Mr Chen says exporters of chilled beef, which has a shorter shelf life, will be among the first forced to adapt.
"I expect the higher tariff to be enforced in the third quarter, around July or August 2026. Some distributors will encourage chilled-beef customers to switch to frozen products and increase frozen purchases in the first half to fill the supply gap later in this year."
Other beef producing countries and big Australian producers are expected to move swiftly quickly to secure market share, says Mr Chen.
"It is survival of the fittest. If you hesitate and wait, you will be eliminated. Producers will have to adjust, whether by changing sales strategies, redirecting products to other markets, or absorbing them domestically."
It’s a challenge for family producers like Robert Mackenzie who runs 3,500 commercial cows on eight properties.
"It's disappointing. We've worked as a family extremely hard on developing that market. We've spent a lot of money, a lot of money in China. It's not as simple as just going out and finding another market."
