THE IDEA of competing on price only has long been abandoned by Australian red meat but leaders believe we can no longer compete on quality alone either.
No longer can Australian beef, nor sheep and goat meat, claim quality as its point of difference, they say.
So what is our future?
The consumer, according to Meat and Livestock Australia’s managing director Richard Norton.
In outlining MLA’s financial performance at the company’s annual general meeting in Alice Springs last week, Mr Norton said for the red meat industry to prosper a ‘razor sharp understanding of the consumer – their expectations, their must-haves, their desires’ must be maintained.
“From this understanding, we can deliver a product that stands head and shoulders above our competitors,” he said.
“Of course, we must not for a second take our foot off the accelerator in delivering a high quality, competitively-priced, delicious product that has the food safety, welfare, provenance and traceability credentials. These are the non-negotiables.
“As I talk to global consumers, our industry’s reputation is second to none, but we must be aware of changing consumer demands.
“Millennials want jobs that contribute to society, and as our future consumers, we cannot ignore their beliefs and values, particularly when it comes to food consumption.”
Mining consumer insights will clearly continue to be MLA’s focus as it navigates its way through the next financial year with expected revenue growth driven by its Donor Company’s agenda to attract more investment.
The 9.1 per cent drop in levy income that flowed from tight cattle and sheep supplies during 2016/17 was more than offset by higher matched Federal Government funds, commercial partner contributions and interest income, Mr Norton reported.
In 2016/17 MLA’s revenue was $200.5 million, 1.4 per cent higher year-on-year and above expectations.
Expenditure increased 11.9pc to $193m.
Mr Norton said this year MLA had invested more in the area of consumer insights than ever before.
MLA now had more than 100 consumer data points from major markets across the world.
“These insights aren’t just nice to know,” he said.
“They are directly informing where MLA invests the marketing levy in our global markets. “They help us customise marketing campaigns in different markets. They’re also informing our exporters about the opportunities in different markets.”
MLA chair Dr Michele Allan said even in the midst of intense competition from overseas markets, as well as the cheaper proteins on home soil, Australian red meat fought hard to hold its place on menus and dinner tables this year.
“Despite the challenges of a poor season, lower turn-off and stiff competition, the total value of the red meat and livestock industry reached $22.1 billion in 2016/17,” she said.
“Although this is 6 per cent lower than last year, producers should be proud of this incredible result in the face of adversity.”
This financial year saw cattle prices trend below year-ago levels and the slow-but-steady rise of the national cattle herd suggests the peak in prices is now behind us, Dr Allan said.
“While it’s unlikely they will drop back to pre-2013 levels, the records of the past two years are not forecast to return in the near future,” she said.
“Despite this, the strong restocker activity, a relatively stable Australian dollar and the reduced tariffs in Japan, Korea and China are all factors in sustaining prices above the five-year average.”
On the global front, beef markets remain in a state of flux, Dr Allan reported.
“The United States continues to challenge Australia’s position as one of the main exporters to Asia and is now in the process of regaining direct access to the key Chinese market,” she said.
“Still, Australian beef exports are forecast to exceed one million tonnes for the fifth year in a row.”
In the domestic market, retail prices have softened slightly and this was likely to relieve the declining per capita consumption trend with beef consumption, she said.
More than 400 producers travelled to the Red Centre for the AGM and associated industry breakfast, forum and tour of a nearby beef operation.
Members voted on the election of three directors to the MLA board: Victorian cattle producer and professional services expert in audit, corporate services and risk management Alan Beckett will serve another term while newcomers were northern cattle production systems specialist and Queensland producer Russell Lethbridge and South Australian sheepmeat and wool producer Andrew Michael.
Members also voted on the election of three producer representatives to the MLA board selection committee – grassfed cattle representative Peter Quinn, grainfed Tony Fitzgerald and sheepmeat Jane Kellock.
The role of the selection committee is to call for applications, review, interview and then report to members on the suitability of candidates for election to the MLA Board.
The MLA board is skills-based.