Rabobank senior analyst Angus Gidley-Baird said farmers can choose the direction of their business for the next generation.
Australia’s grains industry has already undergone its own revolution,with farmers across the country switching their production technique almost entirely to the world-leading practice of no-till cropping.
Traditionally croppers would plough their land before planting,removing crop stubble and turning the soil over before planting. No-till cropping leaves stubble in place to reduce evaporation,encouraging soil fungi and microbes to grow and boost moisture retention,soil health and even more carbon storage.
Sustainable beef production can involve restoring cleared land to boost biodiversity,planting trees to offset carbon emissions from cattle,improving water courses and actively managing habitat and reducing feral animals to aid native wildlife.
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Mr Gidley-Baird said he hoped farmers considered investing to not only upgrade their herds,but also emerging technologies to minutely measure cattle performance such as growth and fertility rates as well as the quality of beef sold to retail.
“You use that information to improve the business,which could mean making a decision to use estimated breeding values for your bull selection,” he said.
The biggest beef industries,in the US and Brazil,are structured to churn out large volumes of standardised beef for domestic and global markets.
They can outstrip Australian exports on quantity and reliability of supply,given the highly variable weather Down Under,their strength in size creates an opening for Australia,Mr Gidley-Baird said.
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“The US or Brazil,it’s a big ship and it’s hard to turn around,” he said. “Australia can deliver a more refined product,and that’s where we have to concentrate. We can be more bespoke – for example,Brazil will supply China’s huge demand for grinding beef – Australia might supply better cuts for hot pot recipes.”
Australian Farm Institute think tank manager Katie McRobert said Australian beef producers can make hay targeting Asian and Indian middle class consumers who are motivated by values as well as cost.
“These are discretionary spenders who care about whether forests are being burned to make way for their beef,or whether animals are pasture-raised in biodiverse environments,” Ms McRobert said. “The advantage for Aussie farmers won’t be a higher carcase price per se but instead access to a consumer class that other beef-producing countries may not be able to reach.”
“There’s been a lot of talk about price premiums for products that are branded ‘sustainable’,but while local consumers are likely to pay a little more for this credence attribute,that small premium is unlikely to make much difference at the farm gate.”
Ms McRobert said while significant price premiums for “sustainable” beef were yet to hit retail shelves anywhere around the world,export markets are the primary driver of the Australian beef industry,where the majority of product is sold – and global markets were “inexorably moving to regulated sustainability reporting requirements”.
“Unless the sector can prove that it genuinely is the clean and green,sustainable industry it aims to be,there’s a real risk that Australia could be impacted first in the lucrative European market and then in others.
“Banking and insurance organisations are also looking closely at their risk exposure in natural capital – cattle producers who can’t demonstrate sustainability credentials are not going to be priority clients.”
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