Beef industry faces cultural challenges in new markets

Consumers around the world have different cultural and dietary tastes and it will be a challenge to meet those needs

HOUSTON, Texas — Meeting demands of consumers with different cultural and dietary tastes could be the next challenge facing beef-producing nations.

Major beef exports come from United States, Australia, Canada and Brazil yet the greatest demand is in Southeast Asia and the Middle East, where beef is probably a luxury item and may only be eaten at special events, said Troy Setter, chief executive officer of Consolidated Pastoral Company, Australia’s largest beef producer with 400,000 cattle.

“When we are thinking about red meat, we think about daily consumption. We are thinking about it on a retail shelf, we are not thinking of it as a special occasion food. If we start to look at some of these developing markets that have huge numbers of people on a lower income, how do we position our western red meat, which has a high cost of production, into part of their celebrations?” he said.

Australia trades extensively with Asian and Islamic countries. There are 10 countries with large Islamic populations in the Middle East, as well as in Pakistan and Indonesia, that want halal-certified meats. They don’t eat pork or much seafood but halal compliance can be difficult.

“We need to be investing in more humane halal slaughter because the demand is massive,” he said at the International Livestock Congress held in Houston earlier this year.

There are different types of beef for different markets.

India is building its beef trade with other nearby countries even though it is commonly considered a vegetarian country. It has an active beef trade, particularly in water buffalo. It has 191 million cattle and 109 million water buffalo.

“Cows are sacred in India but there is no doubt cows are coming into the red meat production,” he said.

About 200,000 tonnes of beef and 100,000 tonnes of buffalo are consumed annually in India.

Frozen buffalo exports are up, especially into the Middle East and southeast Asia.

It is inexpensive and it is halal processed.

It may be found in countries like Indonesia where 83 percent of meat is still sold in small markets rather than supermarkets. People trust their local butcher, who is usually located in the neighborhood.

“Trust in food is really important, especially when that food is expensive,” he said.

Exporters such as India may deal with Berdikari, an Indonesian government importer and distribution agency. It controls food safety and product distribution.

The Indonesian government brings in about 100,000 tonnes of water buffalo meat each year. Buffalo is taking the place of beef in some markets and retails for about US$2.50 a pound.

Indian buffalo is also exported to Malaysia, where the meat is made into products such as sausages and then gets exported into the Middle East.

Pakistan is another larger beef producer and exports about 40,000 tonnes to Muslim markets.

“We are starting to see Pakistan beef in developing Asia,” he said.

They also inject beef with palm oil or fat from other cattle to make a uniform looking marbled product in tenderloins or steaks. These products need to be labelled with traceability.

“If that product is costing US$5 a lb. to make and put on retail and your price is $15 to $20 a lb. to put on the shelf, there is going to be temptation for product substitution,” he said.

As well, he said live exports are continuing around the world, despite some public backlash over shipping live animals on long voyages.

“Traditionally live exports has been a way of opening new markets,” he said.

Australia used to ship live cattle to Japan and Taiwan but now ships meat. It still exports live cattle and sheep to Asia.

Canada, the United States and Mexico exchange live cattle, while Russia ships cattle to parts of Europe. Brazil and Ireland sell live cattle to the Middle East and Northern Africa.

Although it is hard to get accurate numbers on the Chinese cattle herd, it is known live animals are arriving from Thailand, Vietnam and Laos.

Somalia has many economic challenges but it is the largest exporter of goats in the world. It also ships sheep and camels to the Middle East. Livestock contribute 40 percent to Somalia’s gross domestic product

“They have really filled a void that has been left by high sheep prices in Australia going into the Middle East,” he said.

Alternative proteins are another reality.

Insect-based protein sales are expected to rise to US$522 million a year by 2023. It may be fed to shrimp, fish or poultry.

Plant alternatives could reach $670 million in sales but trade in beef is about $95 billion.

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