Tough task to increase herd volume to make most of EU opportunities

Improved access to the EU’s grainfed beef market, via the new 48,200 tonne multi-nation quota, is an opportunity that’s come knocking, according to Allied Beef’s managing director, James Maclean. 

“Nationwide, we have about 2,000 EU-accredited producers and our supply links for this market are very fragmented​,” he said. 

“We need to increase our EU herd and find additional pathways to meet their specifications. We share this quota with nations such as the US and Canada but, at the end of the day, we have just as much opportunity to supply as they do​.” 

Increasing demand​

Queensland-based Allied Beef supplies 1,000 head of EU-accredited cattle each week. It also acts as an EU trade facilitator, vertically linking Australia’s EU production chain from producer through to exporter. 

“Presently, there is increased demand from backgrounders wanting EU-accredited cattle at 250-350kg to grow out to 400-500kg before being placed on feed for 115-120 days​,” he said. 

However, Maclean warned that EU market specifications varied widely depending on customers’ needs.

“It’s very difficult to say that the EU market wants ‘x’ as each Australian processor and lot feeder develops their own individual relationships with their customers​,” he said. 

“For example, some want Wagyu whereas others are more focused on Angus​.” 

Profitable market​

The EU is Australia’s most valuable export market on a dollar/kilogram basis. Maclean said high-quality, grainfed beef could attract A$0.20-0.40 per kilo of carcase weight, which is more than the equivalent non-EU article. 

“There is a distinct premium for EU producers to sell into the market as opposed to non-EU feeder or slaughter markets; they’re probably 15 to 20 cents per kilo live weight better off​,” he said. 

“However, if selling weaners, that premium has been more difficult to realise if sellers are not linked up with EU-accredited buyers​.”