• Hannah Phillips

What's the Future of Aussie Beef?

Aussie beef has been the topic of much discussion recently, with the annual Beef Australia 2018 conference taking place in Rockhampton last week.

Around 200 beef producers and industry stakeholders congregated in Queensland to talk about the industry, its current challenges, and opportunities in the future.

Anita gave a recap on the Country Viewpoint earlier this week.

Key challenges for the Australian beef industry were identified by Meat & Livestock Australia (MLA) General Manager of International Markets, Michael Finucan, as being growing competition from South America, India and the US, with the latter experiencing changing consumer demands.

However, according to Mr Finucan, there are still future opportunities for Australian producers in the marketplace.

"The US economy is tracking well, and that's a good thing for us, because the stronger the US economy, the more money people have in their pockets to buy and eat their own beef.

"But it also means they'll need some more Australian beef," he said.

Asia's growing middle class also presents opportunities for Australia, with the hope that as people earn more money on average, there will be a growing demand for imported beef.

The conference also had a local Flow region flavour, when a micro abattoir built by farmers for farmers in SA's Clare Valley region won the MLA Producer Innovation Award at the Rabobank Beef Industry Awards.

Image: Michele Lally receives the MLA Producer Innovation Award for Australian Micro Abattoirs from MLA managing director Richard Norton.

The award is designed to recognise beef producers accelerating the development and adoption of innovation and new technologies, and was presented to Michele Lally of Australian Micro Abattoirs for her company’s innovative small-scale abattoirs concept, which offers Australian farmers new opportunities to control their supply chain.

Ms Lally entered the red meat industry via the Savannah Lamb paddock-to-plate enterprise she developed with her husband Phil on their farm in 2009.

Through this, she saw first-hand the challenges of using large-scale facilities to process small numbers of animals requiring full traceability.

After developing a pilot abattoir on their farm in the Clare Valley of South Australia, the concept received strong interest from other producers.

Australian Micro Abattoirs was then born, and the business began to take shape through validation and testing the business minimum viable product.

A regional thought leader who is passionate about sustainable and ethical animal husbandry, Ms Lally said Australian Micro Abattoirs was a foundation stone to helping meat producers increase their profitability and allow them to increase focus on provenance and quality, which is now demanded by consumers.

“By building and installing small scale abattoirs, meat producers can take control of their supply chain, with the help from Australian Micro Abattoirs, an Australian company which knows the pressure points faced by Australian Livestock producers,” she said.

“We want meat producers to take control of their supply chain by providing them with a way to focus on profit at the farm gate and make sure there is no money left of the table when they get to selling their stock.”

MLA Managing Director Richard Norton said the award recognised producers accelerating the development and adoption of innovation and new technologies with the judging panel recognising the approach taken by Michele in developing the concept.

“The Award is an acknowledgement of the process undertaken by Michele and her company in developing their micro-abattoir concept – particularly their consultation and identification of the customer needs and the feasibility and viability of the concept.

“The Award aligns with MLA Donor Company’s Producer Innovation Fast-Track program, which accelerates capability and producer-led innovation by providing expertise, co-funding and support for initiatives that have the ability to improve farm and value chain performance.”

As part of the award, Ms Lally will now receive the assistance of a consultant to help refine her project concept or business model.

She will also attend the MLA Red Meat 2018 conference in Canberra in November.

NAB Agribusiness' latest In Focus: Beef Report was also recently released to coincide with the conference, presenting promising things for producers into the future, stating "Australian beef prices are predicted to settle in the high 400c/kg range for the next couple of years, well above long term averages." According to the report, the Eastern Young Cattle Indicator (EYCI) forecast will fall as low as 475c/kg in 2018, but will be back up to the 500c range in 2019. NAB Agribusiness Economist Phin Ziebell says the situation has to be seen in context, because only a few years ago cattle producers would have been very happy with forecasts at that level. “The EYCI has recently fallen below 500c/kg for the first time in three years, which feels tough after the record prices of the past few years,” he said. “However, between 2004 and 2014, the EYCI averaged 346c/kg and it reached a maximum price of 428c/kg in that period. “The 2015-17 boom has put many beef producers in a strong position, and they have over $800 million in Farm Management Deposits. “Furthermore, the Australian dollar has fallen more than five US cents since the end of January, boosting local returns.” Mr Ziebell believes rainfall will largely dictate short term movements in the EYCI, but over the longer term, global fundamentals will have an impact on the domestic market. “It has been exceptionally dry across most of Australia so far this year, and prices are likely to increase if an autumn break comes to pass. “However, if the drier than average conditions experienced in April in Queensland, New South Wales, Victoria and South Australia persist, there is likely to be increased selling, due to grain and hay being expensive and in short supply.” Against a challenging domestic picture, Mr Ziebell said global trends are providing mixed signals. “Export prices to the US and Japan have been reasonably resilient and the industry received a good run in 2014-15 due to a rally in US cattle indicators, reflecting the hangover from the 2011 US drought dampening domestic production. “However, the US herd has rebuilt rapidly, and US Department of Agriculture forecasts point to a 5.7% rise in domestic beef production in 2018 while imports are expected to grow only 1.5%, a far cry from the 31% growth in 2014. “Australian beef in the US has remained resilient. However, there will likely be some pressure in the US and this will be compounded across our key export markets by higher exports from low cost producers in South America."

What are your thoughts on the future of the Australian beef industry? Let us know in the comments below.

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