GLOBALLY, beef production is heading into a big supply growth phase.
So too production of the alternate animal proteins it competes with.
That’s not necessarily a recipe for price disaster, however, because consumer demand across the spectrum for meat is also on its way up.
Now more than ever, Australian beef needs to be aware of the international context in which it is operating, understand its markets and consumers and manage its supply chains closely to both mitigate risk and capitalise on some of the unique opportunities presenting.
That’s the word from experienced beef market analysts and international marketing managers.
Senior analyst animal protein with big agribusiness financer Rabobank, Angus Gidley-Baird, said global beef trade would only become more complex heading forward.
Still, it was exciting times, he said.
Speaking at the live trade industry’s national conference in Canberra in October, Mr Gidley-Baird said seasonal impacts and the laws of supply and demand would continue to impact prices but free trade and market access agreements, the fact technical barriers were starting to be reconsidered and fast-moving consumer demand trends were also coming into play in a significant way.
“High cattle prices sent a clear signal to the world to start generating more production,” he said.
Rabobank is forecasting five million extra tonnes of global beef production to 2020, which equates to a 9 per cent increase.
That is more than twice Australia’s annual production.
While Australia may currently be in contraction, the United States, Brazil, China and India are all already showing significant positive growth.
The US, for example, is forecasting a 4pc growth in beef production in 2017. Australia is one of few in contraction phase.
That upward swing in production is a common theme across all animal proteins, according to Mr Gidley-Baird.
Rabobank has pork’s production increasing 6.5 million tonnes, seafood by a whopping 10m tonnes and poultry by 12m tonnes to 2020.
There is little doubt that growth will have an effect on beef’s profitability.
“The feed conversion ratios available with these alternative animal proteins, which can be as impressive as 1.2 kilograms of feed to 1kg of protein, simply can’t be matched by beef,” Mr Gidley-Baird said.
“Nor the speed of turnaround. A chicken can be produced in 35 days.
“That ability to convert feed to protein quickly will give them a big advantage.”