Can we triple grain-fed beef exports to China by 2030?

Can we triple grain-fed beef exports to China by 2030?


A new report from Rabobank says Australia has an opportunity to increase grain-fed beef exports to China by 65 per cent by 2030.


Grassfed beef will remain the backbone of the Australian beef industry but grain-fed exports to China could triple by 2030 according to new industry research.

In its report, Opportunities for growth in Australian grain-fed beef, agribusiness specialist Rabobank says while grass-based production systems will remain dominant in Australia, grain feeding will play an larger role in the country's overall beef production over the next decade.

Continued growth in beef consumption in Asian countries, particularly China - along with Australia's strong market access and competitive supply chain - will provide the opportunity for the nation's total grain-fed beef exports to increase 65 per cent to more than 500,000 tonnes by 2030, according to the research.

Exports of Australian grain-fed beef to China alone could triple in the same period - from the current 50,000 tonnes to close to 200,000 tonnes.

Report author, Rabobank senior animal proteins analyst Angus Gidley-Baird acknowledged Australia's vast pastoral zone and issues such as volatile feedgrain production suited a grass-based beef production system but said there were big opportunities for the grain-fed sector in China.

"Since the opening of the Chinese market more widely to Australian beef imports in 2013 - and with a growing appetite for beef among Chinese consumers - there has been an increasing demand for grain-fed beef," he said.

"Chinese beef consumption will continue to grow over the next decade and, with limited growth in local Chinese beef production, imports will play a much larger role in meeting this demand.

"At the same time, consumers in Asian markets, including China, have a strong affinity with highly-marbled grain-fed beef as it suits their palate and cuisine, fuelling a demand for grain-fed beef imports that has the potential to grow at a faster rate than overall beef imports.

"Given projections in Chinese income growth, per capita consumption of beef and food service trends - it is reasonable to expect Chinese grain-fed beef imports to grow to represent 20 per cent of China's total beef imports by 2030 (from an estimated six per cent today)."

However, the report says, while increasing Australia's focus on grain-fed beef production is an opportunity worth pursuing, it comes with risks and challenges.

While Australia is in a strong position to capture a sizeable portion of the growing global demand for grain-fed beef, particularly in China, the report says, it will not be on its own.

Angus Gidley-Baird

Angus Gidley-Baird

Other major grain-fed beef exporters - primarily the US, Canada and also likely South American countries in the future - are also expected to increase their export volumes.

But the good news, according to Mr Gidley-Baird, is that the Chinese market is forecast to require close to 500,000 tonnes of grain-fed beef exports by 2030, meaning there would be "enough room for everyone".

"Rabobank believes that the other suppliers of high-quality grain-fed beef would not fill more than 300,000 tonnes of this increased Chinese demand," he said.

"Given the potential size of the Chinese grain-fed beef market and, provided Australia is competitive on price, the opportunities for Australia will likely outstrip the production growth of grain-fed beef in Australia."

We're in the game 

Although Australia's grain-fed system is faced with higher feeding and processing costs than the US and Brazil, the reports says costs of cattle, reduced freight costs and free trade agreements "balance out the equation" when it comes to being competitive in export markets.

"As such, Rabobank believes Australian grain-fed beef - with its own particular characteristics - can be competitive in the global market for grain-fed beef," Mr Gidley-Baird said.

If Australia is to compete successfully with the US and Brazil though, the report says, the local industry will need to increase the number of genetically-suitable cattle and the number of cattle that spend a longer time on feed.

"The real value of grain feeding cattle destined for a higher-end Asian export market is in the ability to more consistently deliver a high degree of marbling," Mr Gidley-Baird said.

"Australia lags the US in terms of higher marbled beef production. Generally speaking, Australia's grain-fed beef production is less focussed on marbling, with less time spent being grain fed and lower marbling scores."

Supply chain changes 

Maximising the chances of growing grain-fed beef exports to meet increased global demand will require adjustments to the Australian beef system, the report says.

"Producers, backgrounders, feedlots and processors will all need to work together - a challenge in the current system which is heavily influenced by the availability of grass," Mr Gidley-Baird said.

"Producers and backgrounders will need to deliver consistent volumes of high-quality feedlot-performing animals. And choosing cattle genetics that perform under a feedlot environment and produce the desired quality traits will be essential.

"Feedlots will need to manage feed-grain supplies and encourage crop farmers to focus on feed-grain production while processors will need to play an active role in incentivising and providing market information to encourage the supply of appropriate animals for the system."

There are also a number of challenges outside the sector itself which need to be considered and managed, the report says.

These include social and environment issues (such as concerns about animal welfare and environmental impacts of feedlot production), the use of Australia's valuable grain supply for animal production and an increasingly volatile global trade outlook.

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