PREMIUM overseas niche markets hold untapped potential for Australian beef and the key to capturing that value rests with a closely aligned supply chain and the ability to meet and exceed consumer expectations.
This was the message from Meat & Livestock Australia's Michael Crowley at the Northern Beef Research Update Conference in Brisbane last week.
Beef was leaving money on the table, he said.
Global demand for beef was red hot and market access conditions for Australia were fast improving. However, the opportunity that presents to garner a larger helping of the consumer dollar won't be realised unless adoption of new tools and technologies at the production level is improved.
"We are a high cost producer so we have to differentiate in the global market place. A niche in a market like China will take everything we can produce and more," Mr Crowley said.
"There are enough people in the world who can afford to pay a premium for our product and we should find out who and where they are and how we can engage with them."
Australian beef offered a broad range of products that suited the needs of many consumers but the opportunity was in chasing premium markets, he argued.
"The consumer is the only one generating new money in our system so we have to think constantly about how we meet and exceed their expectations," Mr Crowley said.
"Consumers continue to evolve. More and more we are getting asked for information about sustainability, our carbon footprint, how the animals were cared for.
"As a production sector we have to respond to the evolving consumer to remain not only relevant but the first choice."
China and the EU
The talk is all China and the European Union at the moment and rightly so.
In the past few months, China has become the largest export destination for Australian red meat.
There appears to be an insatiable appetite for our product in China but it's still only a small percentage of their population that can afford to by it. That is fast changing.
MLA considers the household income of US$35,000 the threshold at which people can afford Australian red meat and the number of Chinese households at that trigger point is forecast to jump from the current 12.5 million to 30m by 2022.
Yet in Europe the number of households meeting that criteria is an incredible 117m. Australia is limited here by quota volumes.
"It's a very high value-per-kilogram market but until we have a free trade agreement in place we are restricted," Mr Crowley said.
"We are working collectively as an industry to achieve this."
With the percentage of females being slaughtered significantly higher as a result of tough conditions around the country, the Australian herd is in liquidation.
When that percentage is above 48, we are considered to be in herd reduction and for the last few months it has been at a record 58pc.
"It will be a long road out of this one and the tight supply and strong fundamentals for demand all shapes up to positive pricing for the production sector," Mr Crowley told the NBRUC audience of more than 350 researchers, producers and beef service providers.
"But price is a function of supply and demand. For producers to extract the most value into the future we need to think about creating a value chain.
"Pricing signals linked to proprietary brand specifications will create opportunities for the production sector to align production to meet the expectations of customers and ultimately consumers regardless of where they are in the world."
- This story first appeared in full on www.farmonline.com.au.