According to press reports in Australia, that nation’s red meat industry organization, Meat and Livestock Australia (MLA), is undertaking a five-year international marketing campaign on behalf of Australian beef and lamb in the Middle East, India, and the United States. More specifically, the target of the campaign in the United States will be to replace chicken, according to Dave Juday, with the Juday Group and an NCC consultant.
According to the Farm Weekly, the top agricultural publication in the state of Western Australia, the focus of the MLA’s U.S. campaign will “be to be to try to convince middle America to give up its favorite meal of chicken for Aussie beef.”
MLA’s Managing Director Richard Norton said, “If we can overcome that American love of chicken, if we can convince American households to eat just one more plate of beef a year, that will be worth $33.6 million (AUS$) a year to us.”
The United States is now the largest market for Australian beef currently, accounting for 32 percent of all exports. Most of the Australian beef imported into the United States, about 70 percent currently, goes into grind for hamburger or into other manufactured beef products. It is not sold as muscle cuts, but rather mixed with higher fat-content grain-fed domestic beef for hamburger.
Reduced beef production in the United States has led to more imports to satisfy demand for hamburger. Through July 10, U.S. cattle slaughter was down 6.9 percent and overall beef production was down 4.7 percent. That trend has been bolstered by a strengthening U.S. dollar making imports relatively cheaper. Beef imports into the United States in May, the latest month for which statistics are available, were up 24.8 percent over May 2014 and up 37.3 percent of for the year to date.
Australia has benefitted most from the new surge in imports. Beef from Australia was up 41 percent this May versus last May and up 64.8 percent year-over-year to date. These increases follow a 74 percent increase for 2014.
One of the factors behind the increased imports is the long-term drought in Australia that has forced herd liquidation and resulted in greater cattle slaughter and beef production. But even with beef production peaking in Australia and the herd shrinking, the value of the U.S. dollar and the reliance of the Australian industry on exports – about 75 percent of production is traditionally exported – has MLA focused on growing its share of the U.S. market.
While Australian beef production is expected to drop off in the second half of 2015 and 2016, it is expected to rebound in 2017. With a majority of production grass-fed, Australian beef does not experience the same seasonality in production as does North American beef production.
One of the key tactics of the marketing campaign will be labels claims, ranging from health; to origin; to production practices, such as grain-fed or grass-fed; animal welfare; and more.
Under the Uruguay Round and the US-Australia Free Trade Agreement of 2005, Australian beef imports face a tariff-rate quota of 418,214 metric tons, of which 56 percent has been filled in 2015. Over quota imports face a tariff of 21.12 percent.
Australia’s quota represents about 2.9 pounds per capita supply in the United States. Per capita consumption of broiler meat is projected to be 88.3 pounds in 2015 and beef consumption per capita is estimated to be 54.1 pounds.
