Livestock

Australian farmers to benefit from China demand for grain-fed beef

By Rodney Woods

Grain-fed production is set to play a larger role in Australia’s beef sector, with the opportunity for the nation’s exports of grain-fed beef to China to increase by more than triple by 2030, according to new industry research. In its report, Opportunities for growth in Australian grain-fed beef, Rabobank said while the backbone of the Australian beef industry would remain a grass-based production system, grain feeding was forecast to play an increased role in the country’s overall beef production during the next 10 years. 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 increase in the same period — from the current 50,000 tonnes to close to 200,000 tonnes. “Rabobank believes there will be strong growth in the global demand for grain-fed beef, fuelled principally by China,” the report said. The report's author, Rabobank senior animal proteins analyst Angus Gidley-Baird, acknowledges Australia’s vast areas of pastured land — and limited and volatile feed grain production — suit a grass-based beef production system.

But he said at a time when China was the centre of global beef demand, there was an opportunity to capitalise on the growing need for grain-fed beef for part of the Australian industry. “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."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. Other major grain-fed beef exporters — primarily the United States, Canada and also likely South American countries in the future — are also expected to increase their export volumes. Mr Gidley-Baird said the good news was, with the Chinese market forecast to require close to 500,000 tonnes of grain-fed beef exports by 2030, “there will 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.”