TALK in beef export circles is big South American player Uruguay is on the verge of regaining access to the lucrative Japanese market, which has now become Australia’s largest by both volume and value.
Beef market analysts say Uruguay, which has been locked out of Japan since 2001 following a Foot and Mouth disease outbreak, has been working hard for at least five years to rebuild that bridge.
The current shortage of supply from Australia, and associated higher costs, had possibly made the case more urgent from Japan’s perspective, Commonwealth Bank agri-strategist Tobin Gorey said.
It would be yet another step in broadening competition in beef markets globally, he said.
“Australia’s more favourable access status around the place, which has been a significant advantage for a number of years, is coming to an end - the rest of the world is catching up now,” he said.
“That was always to be expected.”
On the bright side, demand for beef worldwide was growing quickly, he said.
“So it may be when Australia has greater supply, it might be the case the pie is larger,” Mr Gorey said.
General manager of the Australian Meat Industry Council’s processor group Patrick Hutchinson said while there had been no official word at this stage of any change to Uruguay’s access to Japan, it was on the radar of Australian processors.
“We are aware that NH Foods has purchased a large processing business within Uruguay,” he said.
NH Foods is one of Japan’s prominent food producers and also has extensive beef interests in Australia.
Australian beef operations at the forefront of exporting to Japan say the implications to Australia of Uruguayan beef in Japan will be interesting to see, given its attractiveness in both price and availability of supply into other competitive markets like China.
“Whilst the Japanese favour Wagyu and grain fed beef there is obviously still a place for beef used for wholesale and manufacturing purposes, which will be impacted greatly by the introduction of the Uruguayan grass fed beef, especially with the majority of cattle in Uruguay being Hereford and Angus,” one NSW processor said.
Japan is a market also firmly in the sights of the United States, another major competitor of Australian beef.
However, Meat and Livestock Australia’s international business manager covering Japan Andrew Cox says there are some fantastic consumer trends boding well for Australian beef in Japan.
For example, the value Japanese consumers place on country of origin beef is still a dominant driver of purchasing trends.