HIGH cattle prices are providing beef producers the opportunity to both pay down debt and pump money back into areas that will improve efficiencies.
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The extra money to invest is also fuelling talk about changing farming systems in order to target higher-value markets as a means of securing premiums when supply inevitably starts to grow.
Consultants say there are significant opportunities for differentiation, some emerging and others that have been utilised well by producers for some time.
However, any shift towards focussing on a specific market needs to be well researched, well planned and well executed and seen as a long-term prospect.
Southern Queensland consultant Ian McLean, Bush Agribusiness, said the opportunities associated with high-end markets should be viewed as icing on the cake rather than a silver bullet.
“By that I mean that if you are an efficient low cost producer, then there may be further benefits from targeting a premium market, but if you targeting a premium market without addressing the fundamentals, it is unlikely to pay off,” he said.
“Beef is a commodity, and an enduring reality of commodities is that the lowest-cost producers do the best, as there is limited scope to cost effectively differentiate your product.
“Pursuing a strategy of being an efficient low-cost producer of quality beef, by focussing on land productivity, herd productivity, labour efficiency and optimising herd expenditure, will generally improve the bottom lines of beef producers more than pursuing higher value markets.”
Along with the likes of Meat Standards Australia, the Pasture-fed Cattle Assurance System, organic and the European Union, the growing number of brands with their own specifications and breed-specific markets such as Angus feeder steers appear to be drawing more and more interest from producers.
“Personally I think the increasing uptake of MSA is a positive for the industry because it is primarily associated with improved eating quality of the product for the consumer,” Mr McLean said.
Southern NSW consultant Brian Cumming, BC Agriculture, said a five-year plan was recommended, as a change in breeds or genetics or fine-tuning feed supply, takes time.
“Producers need to anticipate future requirements and adjust the plans accordingly,” he said.
While some markets had evolved to higher specifications, such as including quality assurance and eating quality, other niche markets could be targeted without changing genetics, for example pasture-fed accreditation.