AUSTRALIA is in a prime position to make the most of red hot consumer demand for organic beef in the United States and Europe but industry leaders say a close eye has to be keep on ensuring growth is well planned.
JBS Australia, the country’s largest beef processor, has just announced it will kick off full production of a certified organic beef program next month, with the US firmly in its sights.
JBS says it is looking to “aggressively grow” production numbers for its organic brand, Acres, and it sees domestic market demand for the niche article as also having significant potential.
Rabobank has forecast US and European markets for organic food sales will grow around three times faster than overall food sales in the next ten years.
IBISWorld has year-on-year growth of the organic industry in Australia out to 2020 at 13 per cent.
The World of Organic Agriculture says the the global market for organic products is worth US$80 billion, with 48pc of the market in the US and 44pc in Europe.
When it comes to beef, Australia has a number of competitive advantages to assist with capturing a greater share of the global organics market, according to the Organic Federation of Australia.
Chair Simone Tully, who is also managing director of Australian Organic Meats, the founders of the organic beef industry here, said Australia had nearly 40pc of the world’s certified organic farmland, 97pc of which was pasture.
Our proximity to Asia, which by 2060 will see more than one billion people shift into the middle classes with the capacity to pay premiums for organic products, and our well-established reputation for integrity and food safety in beef production also placed us in a strong position, she said.
Ms Tully said the JBS move demonstrated the optimism for the future that currently exists in organic beef circles.
“A rising tide lifts all boats,” she said.
“Of course, the hope is as more organic beef brands come online, customers are lined up.
“This must be done strategically in order to keep the growth in balance with market demand.
“We certainly don’t want to see organic beef commoditised.”
JBS would agree, it appears.
The company’s commercial manager northern Brendan Tatt said over the past half a decade or so, JBS had been shifting its focus towards developing strong brands that are aligned with customer and consumer demand as a way to improve its international competitiveness and drive increased carcase revenue.
“No longer can we expect to compete in a price war with other exporting countries, especially with our high cost of conversion when compared with our international competitors,” he said.
JBS Imports is already moving some organic beef from other exporting countries across North America.
Ms Tully said while the demand growth for organic beef overseas was indeed strong, it was a competitive landscape.
“Not only are there an increasing number of other countries with organic beef programs but organic chicken and pork is trying to gain more and more retail shelf space,” she said
“In the US in particular, we need to be mindful of pricing.
“We also need to continue to work hard on the technical challenges for exporting organic product in order to be ready to cater for the growth.
“Our rapidly growing sector is currently undergoing a roundtable process with the support of the Department of Agriculture and Water Resources. We need to ensure we have a streamlined industry so we can achieve full global market access through government to government recognition.”
Another thing the organic beef industry had really demonstrated was that producer-led export programs could be very successful at sharing the returns achieved in the supply chain, Ms Tully said.
Big benefits to producing organic
FOR central Queensland fatteners John and Jess Bidgood, “Tingle Hill”, organic certification was not only a pathway to premiums but a means to reducing cattle price volatility and setting up for long term sustainability.
The Bidgoods run around 800 head of predominantly Brahman-cross cattle on three properties at Baralaba.
It’s black soil river flat country dominated by buffel grass, with some blue grass and natives. The couple buy in 300 kilogram young cattle and aim to turn them around in 18 months, to offer steers at 600kg and heifers around 500kg.
Five years ago they began the process of organic certification as part of moving out on their own from a family operation.
“We had to have a way to secure premiums to be viable,” Mr Bidgood said.
Their beef is marketed through Australian Organic Meats and Mr Bidgood said the growth in the number of cattle coming into the organic market in Australia was a great thing.
“Australia has struggled to handle the demand, especially from the United States and we have lost some of that market in recent months due to our inability to supply enough,” he said.
“Those US buyers were forced to go to Uruguay to fill orders.
“A more consistent and larger supply will hold demand and open even more doors for us.”
Organic status means the Bidgoods use no chemicals on cattle or land.
Buffalo fly and ticks are managed through sourcing cattle with high Bos Indicus content and a move to cell grazing, while woody weed control comes down to mechanical options and goats and camels.
“We haven’t had to deal with the extreme ups and downs of cattle prices that conventional producers have over the past few years, which has made it easier to manage and plan ahead,” Mr Bidgood said.
“I believe organic beef will be a sustainable, strong market for years to come.
“More and more people are becoming aware of chemical-free food and also want grass fed beef - demand is only going to keep growing.”
The story Processors and producers move on the organic beef demand boom first appeared on Farm Online.