PLANS to rapidly expand JBS Australia's Wagyu-branded products, following last year's acquisition of Andrews Meats, have highlighted supply challenges to meet the world's burgeoning demand for the premium product.
Calls for greater supply of Wagyu stock were heard during the Australian Wagyu Association's Wagyu Performance field day held at Moyhu Wagyu, Leatarn, Meadow Creek, last week where JBS livestock buyers convinced producers it would be a strategic move to producing the value-added red meat.
"There is simply not enough people breeding F1s through to full-blood Wagyu's, F2s and F3s -- the demand is far greater than the supply," JBS Wagyu livestock manager Jason Carswell said.
Following last year's investment in Andrews Meats, which has 10 processing facilities and five feedlots along the eastern seaboard with a daily processing capacity of more than 8000 cattle and 21,000 small stock, Mr Carswell announced JBS' plans to increase Wagyu feedlot numbers from 100 head per week last November to 250hd/week by the end of this year.
"The expansion was stimulated by the acquisition of Andrews Meats by JBS and the need to help supply some of the company's Wagyu program commitments, but as time goes on, we need to further increase our numbers on feed, so as supply will match these commitments," Mr Carswell said.
He said Australian Wagyu producers had heavily declined following the collapse of the Wagyu steer market in 2007-09 despite the market strengthening in the past four years.
As a result of global economic conditions, feedlot procurement ceased and many F1 producers exited the niche Wagyu market and cleared stock with significant losses.
However, resurgence in demand from 2012 has seen sharp increases in producer returns, with feeder market prices buoyed to an enticing 350 cents per kilogram for steers and 330c/kg for heifers on average.
Mr Carswell dismissed market vulnerability by saying, "JBS has a long-term commitment to the Wagyu program in conjunction with their partners Andrews Meats and this is shown by the increasing numbers on feed".
"The market is solid now but because it fell away more than 10 years ago, so did producers confidence, the market has come back-up and rebuilt itself due to increased demand from domestic and international consumers," he said.
"Producer numbers will grow during the next three to five years," Mr Carswell said.
"The growth will be financially driven by a greater profit margin, there is a significant premium on it compared to any other breed, and consumers are becoming more aware that it is a very good product."
Annabelle Beale
National Sheep & Wool Writer for Fairfax Agricultural Media
National Sheep & Wool Writer for Fairfax Agricultural Media
