Australia’s meat sector has the opportunity to triple its exports of grain-fed beef to China by 2030, according to Rabobank.
The latest report showed that grain fed cows will continue to play a dominant role in the country’s beef production over the next 10 years.
Rabobank said in a statement said that still Australia remains a grass-fed beef production system and has a strong market in China and other Asian countries. Grain-fed beef exports are expected to increase 65 per cent to more than 500,000 tonnes by 2030.
“Rabobank believes there will be strong growth in the global demand for grain-fed beef, fuelled principally by China,” the report said.
Rabobank senior animal proteins analyst and report author Angus Gidley-Baird said that Australia’s landscape suits a grass-based beef production system but China is still the centre of global beef demand.
“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. 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,” he said.
“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).”
Australia’s beef industry faces challenges
Despite this, Rabobank’s latest report has shown that the industry still faces risks and challenges along the way, with other major grain-fed beef exporters including the US, Canada and South American countries increasing beef production.
“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. 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,” he explained.
Another factor the country is facing is the higher cost of feeding and processing compared to the US and Brazil. Rabobank said that cattle price, reduced freight costs and free trade agreements “balance out the equation” in light of stiff competition in the sector.
“As such, Rabobank believes Australian grain-fed beef – with its own particular characteristics – can be competitive in the global market for grain-fed beef,” Gidley-Baird added.
To compete, the local meat industry has to increase the genetically-suitable cattle.
“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. 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,” he explained.