Australia’s sheltered beef export opportunities a thing of the past

Australia’s sheltered beef export opportunities a thing of the past


Brazil-based Danilo Grandini, the global director for cattle marketing and sales at Phibro Animal Health, in Queensland last week for the Australian Lot Feeders Association conference BeefEx.

Brazil-based Danilo Grandini, the global director for cattle marketing and sales at Phibro Animal Health, in Queensland last week for the Australian Lot Feeders Association conference BeefEx.

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While there is plenty of talk coming out of Brazil on the value of producing higher-end beef, the message to Australia is still very much “don’t fear us, there is room for all.”

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ON face value, Brazil - home to the world’s largest cattle herd - is gearing up to make itself felt in Australia’s much prized high-end Asian markets.

Hundreds of new feedlots and big investments in genetics and cropping paint a strong picture of a beef producing nation intent of lifting both productivity and quality.

Brazil regained the right to send fresh beef to Australia’s largest export market, the United States, in August.

While there is plenty of talk coming out of Brazil on the value of producing higher-end beef, the message to Australia is still very much “don’t fear us, there is room for all.”

Likewise, the US, which has just regained access to China, is touting the advantages to all of barriers coming down.

Brazil-based Danilo Grandini, the global director for cattle marketing and sales at feed additive business Phibro Animal Health and the Colorado-based head of JBS Five Rivers, the world’s largest feeder of cattle, Mike Thoren were key speakers at this month’s Australian Lot Feeders Association BeefEx conference.

They took part in an international panel which looked at the fact Australia’s somewhat sheltered opportunities in lucrative high-end beef markets such as China, Korea and Japan are coming to an end.

Higher value markets being open to much larger producers was the new paradigm, they said.

“We only have a small share in the US opportunity but it is a big thing, it is big news for us,” Mr Grandini said.

“We now have the credentials to start approaching new markets.

“We know we will have to compete with high quality in many of these new markets.

“Less than one per cent of what we produce we consider premium meat.

“We are very interested in increasing that and our packers have many programs in place to lift quality.”

Expectations are that within ten years, Brazil will have doubled the amount of beef it produces through the feedlot system to account for 20 per cent of its turnoff.

While feedlots account for around 90 and 30 per cent of beef production respectively in the US and Australia, given the sheer size of Brazil’s herd - over 209 million head - that doubling of capacity is significant.

INTERNATIONALLY SPEAKING: Mike Thoren, JBS Five Rivers in the US, Australian feedlot industry leader Malcolm Foster, Willem Wethmar, Chalmar Beef in South Africa, James Leftwich, Austrex South East Asia and Danilo Grandini, Phibro Animal Health, Brazil.

INTERNATIONALLY SPEAKING: Mike Thoren, JBS Five Rivers in the US, Australian feedlot industry leader Malcolm Foster, Willem Wethmar, Chalmar Beef in South Africa, James Leftwich, Austrex South East Asia and Danilo Grandini, Phibro Animal Health, Brazil.

Data presented by Mr Grandini showed that Brazil’s 770 feedyards have a capacity of 2.5m head.

The average daily weight gain is 1.497 kilograms, average dressing percentage 55.5pc and feed conversion 6.76:1kg.

However, according to Mr Grandini, the domestic market is where the growing Brazilian feedlot market is looking.

“We see a huge internal market for higher quality beef,” he said.

“Currently Brazil is importing this type of product from Australia and Argentina.

“We can’t say just how big that market is but what we know is there is a big push for it.

It is growing - the wealthy class of Brazilians and the percentage of people who can afford this type of product, it is much bigger than ever before in the past.”

The first export market high end product was likely to go was Europe, he said.

In China, and many other global markets, commodity beef was “big business” for Brazil and that was not likely to change soon.

Danilo Grandini presents an overview of Brazil's feedlot industry.

Danilo Grandini presents an overview of Brazil's feedlot industry.

“Around the world we are going to find a place for everyone and Brazil will most likely take the commodity space,” Mr Grandini said.

“We generate a lot of value when we export, even where we have no access to the best markets, so we will always look to do this more.”

Mr Thoren said there was no doubt Australia and the US had been protected species in beef export markets.

“We have had, on the basis of foot and mouth disease freedom, unchallenged access to lucrative markets,” he said.

“That is coming to an end.”

The US has allowed Brazilian beef into its own market  and that was the thin edge of the wedge, he said.

“Just as there is the opportunity for Brazil to send lean beef to the US, we have the opportunity to send fed beef to Brazil,” Mr Thoren said.

“Maybe, in the end, we’ll be on the front side of the trade opportunities.

“There is a pool of worldwide beef production; what all of us are trying to do is get pieces into the highest value markets.

“Rather than oversupply regions with cuts that might not be best suited we need the freedom to move that whole carcase to the best market.”

Asked how hard the US would fight for approval and acceptance of HGP (hormone growth promotants) in China, Mr Thoren said there was much still to be negotiated and determined.

“But generally I would say the US will be fairly easy on the elimination of beta agonists but if we go to the loss of implants, I don’t think the premium will carry the loss of production,” he said.

“When you think about the size and scale - if there are a lot of conditions it’s very difficult to chase that product through a plant that is processing five or six thousand head a day.

“If they (China) put a lot of conditions on the trade there will not likely be a large supply from the US.”

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