My beef with beef

View From the Paddock


Beef producer and founder of The Beef Co-op Project, Emma Robinson.

Beef producer and founder of The Beef Co-op Project, Emma Robinson.

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After listening to the enticing projections and upbeat buzz around possibilities for Australian beef shared at the recent ABARES Outlook conference, I was left feeling a little conflicted.

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After listening to the enticing projections and upbeat buzz around possibilities for Australian beef shared at the recent ABARES Outlook conference, I was left feeling a little conflicted. Maybe it’s the recent memory of record low prices that gives me a gnawing disquiet, “a beef with beef” around how producers, particularly northern beef producers capture more of this opportunity. 

Historically, producers as a whole have captured little of the increase in value of Australian beef.  ABARES data shows that export value of Australian beef between 2000 and 2014 more doubled from US $2.8 billion to $US $7.0 billion. Volume increased by less than a third over the same period with farm gate prices remaining largely unchanged.

This data reflects the leverage of large consolidated supply chains and also the increasing shift in supply chain power from those producing the product to those closest to the consumer.

So how do producers create and capture new value in this increasingly consolidated, globalised market place? Is it enough to simply manage the profit drivers within our own enterprise or should we all be thinking more broadly about leveraging our production capacity to build greater scale, efficiency and value beyond our own farm gate? Encouragingly technology, direct interest from investors and consumers is enabling more producers to take this opportunity.

Many producers are making the shift from producing cattle to vertically integrating and selling their own branded beef. There are great success stories at all scales as growing proof that producers can build supply chains from farm to the consumer. 

New investment models are enabling producers to drive property expansion and achieve market leverage through scale. Collaborative approaches are also increasing, where producers work together to combine resources and create value that cannot be achieved working independently of each other. 

Regardless of the approach, the re-occurring theme is the intensity of global competition and the need for producers to be part of a more optimized approach beyond their own farm gate to remain profitable. 

The dynamic, globalized nature of consumerism means there is a vast sphere of consumer value seeking to be satisfied. This dynamism, overlaid with the complexity of competition, logistics and trade creates huge opportunities but also hurdles in the capacity of supply chains to deliver the right product, at the right time, at the right price.

Is there a tipping point whereby these challenges mean Australia’s beef supply chains look for new approaches that redefine the interplay between production and processing and ultimately deliver consumers more differentiated, quality, value propositions? 

Food is increasingly more than a commodity so market challenges won’t be resolved with an industrialised commodity approach. Left simply to the market, “my beef with beef” will probably mean a continuation of feast or famine swings that do little to move the whole industry forward.

Australian beef producers need to be profitable not only because they are low cost producers but also because they are part of a more optimised supply chain where producers create and capture a greater share of new value. Current high prices and short supply constraints creates a great window of opportunity to further the conversation about how this is possible.

 - Emma Robinson, Charters Towers beef producer and founder of The Beef Co-op Project.

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