FORECAST world population increases means more food will be needed in the first half of this century than what was consumed in the past 7000 years.
What is most relative to beef is the urbanisation and increased per capita incomes of that population growth.
This point was made clear at the 2016 World Brahman Congress, being held in Rockhampton, Queensland, today where global market intelligence experts in the red meat sector, international beef industry leaders and producers met.
In China alone, in the next five to ten years, 200 million people are expected to be living in cities and that will take the average income of US$7000 to US$10,000.
With increased income comes increased beef consumption.
For the most part, it can’t be produced where it is being consumed, so trade will have to ramp up.
Australia intends to play a big part in that.
So too, Brazil, home to a cattle herd of 210 million - the world’s largest.
Against this backdrop, Rabobank Brazil-based senior analyst Adolfo Fontes’ presentation of his country’s efforts to lift beef productivity and international competitiveness was information keenly taken on board by Australia’s beef industry.
Brazil does, however, face some serious challenges to those ambitions, Mr Fontes said.
Furthermore, what it has planned offers some very good opportunities for Australian seedstock suppliers.
Mr Fontes said Nelore cattle - very similar to Australian Brahmans - dominated Brazilian beef production.
Brazilian farmers were focused on improving genetics and not only was the flow of Brahman genetics into the South American country strong, as a means of lifting herd quality, but European breeds such as Angus and Hereford were becoming increasingly incorporated into the national herd through crossbreeding, he said.
Ninety per cent of Brazil’s cattle are on grass and degradation of pasture land in Brazil was widely spread.
“Our animals take four to five years to get to slaughter weights,” Mr Fontes said.
“We are now seeing a lot of grain producers buying this type of land, starting by planting rice then soybeans, corn and soybeans again and then to pasture.
“Under this program, within three years they can recover the land nicely and produce again beef.
“We expect in the medium term a lot of unused areas will be returned to cattle production and productivity will increase.”
Since 2006, the Brazilian herd has continually grown, increasing by a total of 50m head.
However, productivity is low - Brazil’s average carcase weight is 240 kilograms compared to 260kg in Australia and 360kg in the US.
Just 10 per cent, or four million head, are now on feed for 90 to 100 days, achieving 500kg liveweight by slaughter.
That number is expected to grow to 8m, according to Mr Fontes.
Since Brazil gained re-entry to the Chinese market 12 months ago, it has taken ground from Australia.
Mr Fontes revealed Brazil’s beef exports in first four months of 2016 to China were 51,000t and by the end of the year was expected to be 150,000t.
The challenge in Brazil is logistics.
It currently takes 40 days for Brazilian beef to reach China.
Most exports go through ports in the south, however it would be faster and cheaper to ship product from the north.
“These roads are poor and can be blocked for three weeks due to rain - this sort of thing makes it hard to be competitive in international markets,” Mr Fontes said.
A new president and improving economic conditions are changing that and Brazil expects to be able to reach Asia much quicker in coming years.
Only 20pc of Brazilian beef production is exported.
Brazilian producers are receiving A$4/kg carcase weight and their costs of production are around $3/kg, Mr Fontes said.
The high cost of beef in Brazil has meant consumers are looking for cheaper protein options.
A Brazilian consumer can buy 3kg of poultry for the price of 1kg of beef, Mr Fontes said.
“The declining economy has meant more beef is available for export,” he said.
Government interest rate subsidies to beef producers and efforts to open new markets are also assisting in Brazil’s bid to turn off more beef to the world.
Brazil’s ambition is to be foot and mouth disease free in five to ten years without vaccination and the industry is looking to push the whole of South America down that path in order to secure this goal, according to Mr Fontes.
The congress continues today.
