Australia's grainfed beef expands prospects

International market demand for Australia's grainfed beef is likely to see Japan and Korea remain major customers but will also include new market destinations such as Russia and the Middle East by 2020.

"In two years time, the recently launched EU high quality grainfed quota will be at 45,000 tonnes in size," said industry analyst and former Australian Lot Feeders Association president, Malcolm Foster.

"This is a high-value grainfed market that never previously existed, and Australia should be able to secure a sizeable slice of that trade," he said. At the retail consumer level, there will inevitably be greater emphasis on beef brand programs in 2020, both grainfed and grass-fed.

A new sub-set within this could be greater focus on producer-controlled, rather than processor-controlled commercial brands. Consumers increasingly want a supply story behind their brand preference. Volume brands, however, will inevitably remain the realm of major processor and retail groups. If anything, the distinction between commodity beef and brand programs is likely to become even wider over the next decade.

Developing economies will seek a cost competitive product without all the brand frills, while more mature markets will become increasingly discerning over issues like environment and animal welfare integrity and traceability.

Food safety and product quality and consistency will largely become a given; however, flavour characteristics will play an increasingly important role in marketing programs.

The unusually narrow price differential between grass and grainfed beef seen over the past two years is likely to again widen, as economies recover after recent tough times.

The main constraints to cattle generally, and grainfed beef specifically on the 10 year horizon include labour access, the increasingly stringent and complex regulatory process, greenhouse gas and other environmental issues, and availability of water