Cattle supply, production systems and markets for Australian beef

Abstract

Markets for Australian beef throughout the 20th century have been moulded by world wars, economic depressions, droughts, transport technology, cattle breeding, trade barriers, global competition, livestock disease eradication, human health risks, food safety, Australian Government policy, consumerism and beef quality. Major ‘shocks’ to beef marketing include the development of successful shipments of chilled carcases to Britain in the 1930s, the widespread trade disruption caused by World War II, expansion (early 1950s) and then a reduction in beef exports to Britain (1956), the introduction and then proliferation of Bos indicus derived cattle in northern Australia (1960s), licensing and upgrading of Australian abattoirs to export to USA and the consequential brucellosis and tuberculosis eradication campaign leading to record export tonnages of Australian processing beef to USA (1960–70). In 1980, increased beef trade to Japan began, leading in the late 1980s to expansion of high-quality grain finished products into that market. By 1993, beef exports to Japan (280.5 kt) exceeded those to USA (274.4 kt), signalling the significant shift in beef exports to Asia.

Commencing in about 1986, the USA recognised the value of beef exports to Asian markets pioneered by Australia. Australia’s share of the Japanese and South Korean markets has been under intense competition since that time. Another major influence on Australia’s beef market in the early 1990s was growth in live cattle exports to Asian markets in Indonesia, Malaysia and the Philippines. Live exports accounted for 152000 heads in 1992 and 858000 heads in 1996. Improved management systems (e.g. fences) and consequent regulation of cattle supply even in the wet season, a by-product of the brucellosis and tuberculosis eradication campaign, were indirect drivers of the growth in live exports.

Throughout the period 1940–2000, domestic consumption of beef and veal declined from 68 to 33.3 kg/head.year, reflecting competition from other foods, perceptions of health risks, price of beef, periodic food safety scares, vegetarianism, changes in lifestyle and eating habits and lack of consistency of eating quality of beef. Despite this decline, the domestic Australian beef market still consumes a significant component (37%) of total Australian beef production.

In 1984–85, the reform of the Australian Meat and Livestock Corporation set in train a major directional change (‘New Direction’) of the beef sector in response to beef market trends. Under Dick Austen’s leadership, the Australian Meat and Livestock Corporation changed the industry’s culture from being ‘production-driven’ to being ‘consumer-driven’. Market research began in Australia, Japan and Korea to establish consumer preferences and attitudes to price, beef appearance and eating quality. Definite consumer requirements were identified under headings of consistency and reliability. The AusMeat carcass descriptors were introduced and a decade later traits like tenderness, meat colour, fat colour, meat texture, taste, smell, and muscle size were addressed.

These historical ‘shocks’ that shaped the Australian beef markets have all been accompanied by modification to production systems, breeding programs, herd structure, processing procedures, advertising and promotion, meat retailing and end-use. The increasing importance of the food service sector and the ‘Asian merge’ influence on beef cuts usage in restaurant meals and take-away products are the most recognisable changes in the Australian food landscape.

The Cooperative Research Centre¿s research portfolio was built around the changing forces influencing beef markets in the early 1990s. Australia needed to better understand the genetic and non-genetic factors affecting beef quality. One example was the poor success rate of cattle being grain-fed for the Japanese premium markets. Another was the relative contribution of pre- and post-slaughter factors to ultimate eating quality of beef. The Meat Standards Australia scheme was launched in 1997 to address this problem in more detail. The Cooperative Research Centre contributed significantly to this initiative.

In the year 2001, Australia, with only 2.5% of world cattle numbers retains the position of world number one beef trader. We trade to 110 countries worldwide. The Australian beef sector is worth A$6 billion annually. The diversity of Australian environments, cattle genotypes and production systems provides us with the ability to meet diverse specifications for beef products. A new set of market forces is now emerging. Strict accreditation rules apply to Australian producers seeking access to the lucrative European Union market. Transmissible spongiform encephalopathies like bovine spongiform encephalopathy and scrapie are a continuing food safety concern in Europe. This and the foot and mouth disease outbreak in Britain early in 2001 have potentially significant indirect effects on markets for Australian beef. And the sleeping giant, foot and mouth disease-free status of Latin American countries Brazil, Uruguay and Argentina continues to emerge as a major threat to Australian beef markets in Canada and Taiwan. As in the past, science and technology will play a significant role in Australia¿s response to these market forces.