Shift toward online shopping

Shift to online shopping

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Ken Wilcock notes that COVID-19 has caused an accelerated shift toward online shopping.

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WARY: Retail is expected to play a heightened role in overall beef supply as opposed to foodservice as people take some time to adjust to the health related uncertainties associated with eating out.

WARY: Retail is expected to play a heightened role in overall beef supply as opposed to foodservice as people take some time to adjust to the health related uncertainties associated with eating out.

IRRESPECTIVE of how irrational or unnecessary the reaction may have been, consumer panic buying of meat and other grocery items ahead of the first wave of coronavirus in the US has carried over into ongoing behavioural change in regard to stocking of pantries and freezers.

Research carried out by the National Cattlemen's Beef Association has found that consumers are wary of what may still be ahead in the coming months and are continuing to remain well stocked up, particularly in beef.

This suggests retail will continue to play a heightened role in overall beef supply as opposed to foodservice as people take some time to adjust to the health related uncertainties associated with eating out.

The flow on effect from this is an accelerated shift toward online shopping, a behavioural change that was thought to be on the horizon about three to five years away.

But as the NCBA research has found, while there is opportunity in online ordering for the beef industry as a whole, there is also a significant challenge for products such as beef to meet customer expectations.

Interestingly this was very much on point in the Great Southern Grass Matters podcast interview a fortnight ago with JBS division head of imports in the US, Australian expat Kim Holzner.

As Mr Holzner explained, when retail exploded during the Mar-May first wave, there were problems with US domestic beef supply generally because of plants shutting down for periods due to virus related staff issues.

These gaps in production caused retailers to look for any different options they could get their hands on.

As it was, the Great Southern product had already expanded from its early beginnings in the quick-casual foodservice segment to a case-ready retail product as part of the online meat range offered by one of the 'big box' warehouse type cash and carry operations.

Mr Holzner said, "We already had a product in that space which was performing really well."

While there is opportunity in online ordering for the beef industry as a whole, there is also a significant challenge for products such as beef to meet customer expectations.

The US shortage opened up opportunities to companies who could supply and Great Southern was in the position of having greater quantity than the US grass-fed sector could bring to bear because it is such a small industry in comparable terms with a very high cost of production.

But having capacity to supply and being price competitive were not the only considerations.

As well, the product had to measure up well enough for the American consumer who is used to eating grain-fed beef.

There were a lot of non-graded grass-fed products around but these did not have the backing of an eating quality standard nor the certified assurance of being grass-fed, hormone free and antibiotic free.

In this regard third-party auditing was important because of the assurance it gave consumers in the US that it is not just a company program but rather an externally audited program that can be trusted from start to finish.

Mr Holzner acknowledges the boost that his company's product has received from the extraordinary circumstances that have prevailed since early this year but also points out there are generational shifts occurring which are tilting the landscape toward meat products that are perceived as being healthier and more sustainable.

As NCBA believes, new-normal realignment between foodservice and retail may have already arrived and with that perhaps some invigoration for a product that not only ticks a lot of boxes but also is one that Australia is well placed to supply.

Cattle shortage biting hard

More rain in central and eastern Victoria and southern border parts of NSW late last week and over the weekend contributed to a continuation of low numbers in early markets this week.

At Wagga, heavy meatworks steers dropped a further 5c/kg on last week's 12c fall and while the 400c high has now disappeared, dressed weight averages are still at or better than 700c/kg.

Cows steadied after last week's 7c/kg loss and returned a 1c/kg better average at 294c on a reasonable sample for this time of year. That converts to around 570-580c dressed which appears a touch better than published grid rates.

This week's early markets in southern Queensland were very lightly represented with meatworks cattle but Dalby last Wednesday provided some guidance with heavy cows down 16c to average 278c for the better conditioned types.

Possibly a contributing factor to the extent of the fall in cow price was the pending two-week shutdown of Dinmore.

Grid rates in southern Queensland remain unchanged at 640c for 4-tooth ox and 560-580c for heavy cow but these will likely come under review this week.

A mid-August plunge to below 100,000 head in eastern states' weekly slaughter will further diminish already declining beef exports.

Feeling among processors is that the shortage in cattle supply that was expected last year is now well and truly here and only likely to worsen with more works losing time before things take a turn for the better.

Progressive figures from Department of Agriculture suggest shipped tonnage for August will be a new low point for the year at a little over 80,000.

The US lean beef import market was reported steady at US$227/cwt for indicator Aust/NZ 90CL blended cow FOB US East Coast, exactly where it was same week last year.

WA reviews Johne's management

After national deregulation of Johne's disease in cattle in 2016, the WA cattle industry requested continuing state regulation of JD (C-strain).

WA's Cattle Industry Funding Scheme Management Committee funded a control program that included targeted surveillance to establish that state's current JD status. The completed surveillance showed there was a very low risk of the disease being present in WA cattle.

The WA cattle industry is now being asked to decide whether JD in cattle continues to be managed through state regulation or is deregulated and individual stakeholders manage their own biosecurity.

A consultation period is open until September 2.

For more information see https://talkingbiosecurity.dpird.wa.gov.au/management-of-jd-in-cattle-in-wa-consultation.

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