TIGHTENING global beef supply and the upward pressure that places on prices has created the perfect opportunity for lining up the ducks on issues like sustainability and data management.
International animal protein strategist with Rabobank Justin Sherrard made a strong argument for Australia's beef industry to be looking at the big changes unfolding at the moment when he spoke at the Northern Territory Cattlemens' Association conference in Darwin last week.
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"It's when prices are like this we should be thinking about how we can grab hold of those changes and manage them to create a more prosperous future," he said.
"When prices turn, we become less open minded about how we think about the future."
The Netherlands-based Mr Sherrard is responsible for agenda-setting analysis of issues of strategic importance to animal protein companies around the world.
He said big changes on the world beef scene were in the wind at the moment and the question for Australian producers and processors was where to focus.
Beef production globally is expected to be down slightly on where it was last year, driven largely by the United States.
In Australia and Brazil - two important exporters - production will be up but due to the fact the US will need to import more, global markets will stay tight.
Tight supply while demand is firm means upward pressure on prices.
While that is a positive outlook, at the same time margins are being squeezed right along the supply chain and big questions are emerging about retaining consumer interest as retail beef prices continue to climb, Mr Sherrard said.
Higher costs for energy, fertiliser and many raw materials, exacerbated by war in Europe, are flowing through and combining with issues like labour and sustainability, which are creating costs that need to be factored into beef supply chains permanently.
"We need to examining just how long consumers are going to be willing to pay more for beef, what is it about beef they like and how can we give them more of what makes them feel good about beef consumption and the prices they need to pay for it," Mr Sherrard said.
The sustainability agenda was flipping, he argued.
It was moving away from risk and the 'I don't want to have anything to do with this' sentiment to 'actually, there could be more opportunity here than what I realised'.
Data management, a new orientation of supply chains and trade relationships were three key areas with a short-term dimension but that would be crucial to the beef industry's longer term success, Mr Sherrard said.
"Good cattle producers have been using data for many years to be rational in management but the area that is underdone at the moment is in integrating information that comes from different parts of the organisation into a system that provides easy-to-use dashboards for powering decision making," he said.
"Data needs to move up and down the supply chain in a two-way flow so producers better understand what customers want and so that customers understand what is happening at the farm."
Fashion and finance
Mr Sherrard used the fashion and finance industry to paint a picture of how more and more people downstream - beef's 'business partners' - are seeking information about how and where beef is produced.
A new sustainability act has been launched in the US, requiring every fashion house in New York to know where their raw materials come from.
"Almost all of them use leather, so they are going to need to know where it is coming from and that means questions about what the production system is like," Mr Sherrard said.
"And in the world of finance we are also much more interested in what is happening upstream - where the finance we are providing is being used and how.
"The growth in ESG (environmental, social and governance) assets under management globally is moving from today's 28 per cent of assets to around a third by 2025."
More and more, investors are screening around ESG and they want data that provides reassurance that what is happening is ok against these criteria.
Rabobank had started reporting on financed emissions, for example, and was certainly not the only bank doing that.
"The point is, producers need to think about serving multiple purposes with data," Mr Sherrard said.
"They will want it to drive productivity but there will be a need to organise it so that it can also meet needs of those downstream and possibly also help others in the supply chain to be guided."
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