Japan’s changing Wagyu demands

Boutique butchers on the rise in Japan


Wagyu live export business owners Matt and Alice Edwards, Edwards Livestock at their quarantine facility near Oakey on Queensland's Darling Downs.

Wagyu live export business owners Matt and Alice Edwards, Edwards Livestock at their quarantine facility near Oakey on Queensland's Darling Downs.

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An appetite for risk mixed with business adaptability has enabled Australia’s largest live exporter of Wagyu cattle to keep pace with changing Japanese beef consumer demands.

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An appetite for risk mixed with business adaptability has enabled Australia’s largest live exporter of Wagyu cattle to keep pace with changing Japanese beef consumer demands.

Live export business owner Matt Edwards, Edwards Livestock, Oakey, said Japan’s beef choices are changing towards a more budget conscious, rich tasting Wagyu beef product best provided by Australia’s F1-cross Wagyu cattle.  

“The Japanese cooking style of Wagyu beef hasn’t changed, but the young generation are moving away from the traditional expensive full-blood product,” Mr Edwards said.

“Some Australian F1 Wagyu meat in Japan is being marketed through exclusive butcher shops, which is a first for Japan and includes more westernized cuts of beef.

“It’s only a small amount going to Japanese butchers, which are built on Australian concepts like the exclusive Victor Churchill butcher shop in Sydney.”

While this marketing avenue in growing in Japan it remains a small part of Edwards Livestock’s customer product sent to major importer Marusho Foods with most Wagyu beef going to two large supermarket chains near Osaka.

While current business conditions are positive, last year’s operating environment was extremely tough. The 2016 Japan live cattle export ban, due to Bovine Johne's disease being detected in a shipment of Victorian dairy cattle, lasted three times longer than the Federal government’s Indonesian live cattle export ban six years ago.

“During the three month Japan cattle trade ban we were the only exporters going commercially to the country in the feeder industry, so unfortunately it was only our small business and suppliers impacted,” Mr Edwards said.

“Our appetite for risk is more than most due to the type of industry we’re in, but it definitely put financial pressure on us due to having purchase contracts in place with all our Wagyu cattle suppliers every month.”

After the live cattle ban to Japan was lifted at the end of August last year Edwards Livestock contracted larger export boats to ship the 5000 head backlog of Wagyu cattle to its Japanese feedlot clients.

“We generally export 1080 head of Wagyu cattle to Japan every five weeks,” Mr Edwards said.

Adding more pressure to the Darling Downs based company’s financial margins is continuing high prices for suitable Wagyu cattle.

Over the last four years Australian F1 feeder weight Wagyu steer prices have jumped 110 per cent with spot market prices recently reaching $1900-a-head.

“About four years ago F1 Wagyu feeders cost around $900 per head, but the market price has continued to rise since then,” Mr Edwards said.

“Most of our Wagyu cattle suppliers take a five to 10 year outlook with cattle pricing and can currently budget a year and half into the future due to forward contracts.”

Mr Edwards said the future contracts to send F1 Wagyu steers and heifers to Japan every five weeks is an important part of the business.

Edwards Livestock's Wagyu cattle bound of live export to Japan's Marusho Foods for 500-day feedlot feeding program.

Edwards Livestock's Wagyu cattle bound of live export to Japan's Marusho Foods for 500-day feedlot feeding program.

“We export Wagyu cattle around 11-months-old between 270 to 320kg with Japan taking 95 per cent steers, which are put onto a 500-day feeding program, while majority of the heifers are feed in Australia and processed into export boxed beef,” he said.

“The Japanese feedlots buying our Wagyu cattle are locked into June next year at a pretty high prices, but they are definitely looking for a price reduction going forward.”

Mr Edwards anticipates price reductions around 30 to 40pc for Australian Wagyu feeder cattle over the next 18 months.

“As Wagyu prices rise our Japanese live cattle trade partners are targeting high performing genetics,” he said.

“Our Wagyu feedlot clients in Japan have traveled to Australia and worked with some of our long-term Wagyu cattle suppliers on different genetics, which include AI programs and bull composition.

“They need to achieve maximum carcase weight and meat marbling during their 500-day Wagyu feeding program.”

Stockyard secures AACo Wagyu feeders

Stockyard has been confirmed as the buyer of some highly-valued Australian Agricultural Company (AACo) Wagyu feeder cattle.

Stockyard’s chief executive Lachie Hart said the company’s Kerwee Feedlot at Jondaryan was presented with an opportunity to purchase an unknown number of AACo Wagyu feeder weight cattle and negotiated the commercial transaction last month.

AACo is one of Australia’s largest Wagyu cattle producers in both fullblood and crossbred Wagyu genetics.

The move by AAco to offload Wagyu feeder cattle is significant given the push to secure supply, which saw prices for Wagyu feeder cattle rise to $7-a-kilogram live weight.

Australian Wagyu Association assisting CEO Graham Truscott said the market was still hovering around that price level. 

He has recently noticed some vertically integrated Waygu beef companies “finding value not only marketing boxed beef, but in selling feeder Wagyu cattle through the supply chain”.

“They are making money out of high Wagyu feeder prices even though they are a vertically integrated beef supply chain,” he said.

Stockyard supplies grainfed Wagyu and Angus branded beef products to international markets and the company’s Kerwee Feedlot is currently completing an expansion project resulting in capacity growth from 11,100 head to 20,200 head by 2018.

“There are a number of Wagyu producers who breed and background Wagyu genetics and Kerwee has entered into conversations and negotiations with a number of them, including AACo,” Mr Hart said. Mr Hart added the company was working closely with a number of suppliers of Wagyu and Angus genetics to secure feeder cattle as the new Kerwee feed pens come online.​

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