Watch out for beef from South America

South America's beef challenge escalates By VERNON GRAHAM - Australia, Tuesday, 13 March 2007

Brazil, the world's leading beef exporter, and neighbouring Argentina will emerge as major competitors in the lucrative Japanese and South Korean markets within a decade.That was the thrust of a chilling message delivered to last week's Outlook Conference in Canberra by Uruguayan meat industry chief and former Agriculture Minister, Roberto Vazquez Platero.

He told an audience that included Meat and Livestock Australia chairman, Don Heatley, that Brazil, in particular, was gearing up its beef industry to first gain full access to the US market which would then open a path to high-value Asian destinations. He said the five major South American beef exporters - Brazil, Argentina, Uruguay, Paraguay and Chile - grabbed 45pc of the world beef export market last year and their share would soon increase to more than 50pc.In contrast, Australia's share was static at about 20pc. He said the five countries had a total herd of 280 million (including Brazil's 200m) which dwarfed Australia's 28m. Brazil's beef production had rapidly climbed to nine million tonnes and was poised to reach 13 million tonnes during the next 10 years. This would make it the world's largest beef producer ahead of the US. Mr Platero said Brazil's beef exports were likely to reach three million tonnes during the next decade, which would include significant shipments to the key Australian markets of Japan, the US and South Korea. He said the South Americans were getting on top of Foot and Mouth Disease which had excluded them from the best export markets for some years. Argentina was also likely to reverse policies that virtually stopped exports in favour of domestic consumers.

These policies have reduced average steer prices to a paltry US76 cents per kilogram liveweight compared with $1.35 in Australia and $1.87 in the US. Argentina has the potential to export up to 2.5m tonnes of high-quality beef a year. At least Australia and South America will be fighting over a larger beef export pie. Mr Platero predicted world consumption would grow by 24 million tonnes by 2020 from the present level of about 60m tonnes. Most of the increased demand would come from cashed-up consumers in developing countries. MLA chief, Don Heatley, said Australia was ready to compete vigourously to protect its crucial export markets.

SOURCE: Extract from report in The Land, NSW, March 8.

Northern Australia needs to rapidly and cogently develop and improve links with these powerhouse agricultural countries of South America. Brazil especially, with great beef herds, a vibrant agricultural sector producing soybean, cotton and most major warm temperate or tropical crops could offer much to north australia - Senator Heffernan should maybe take note of this with his "develop the north" committee! Genetically, an argument could be made that select areas of South America may even have superior genetics in the beef herds now.

Twenty years ago soybean genetics from Brazil showed great potential in the Top End region, but before their potential was realised, the demise of the ADMA project scheme in the NT stopped further research. While currently being reassessed with newer genotypes, it takes time for the material to be grown and developed to a necessary volume to be tried at a realistic scale. Lets get it right.......or we will not have our markets in future - even our regional markets, as these South American countries rapidly develop.