TRAILBLAZING livestock and beef supplier Harmony Agriculture and Food Company is shifting its focus to Wagyu and grainfed branded programs in the wake of what it has found to be significant challenges with the live export to China market.
The Victorian and West Australian company was set up two years ago with the primary focus of building an integrated supply chain to tap into the emerging live slaughter cattle trade to China.
Harmony managing director Steve Meerwald said the escalation of that trade was not happening as fast as anticipated.
The biggest limitation had been market development for the product in China, he said.
“It’s not imported beef, nor is it domestic livestock. It’s an imported product with a different provenance story and to extract maximum value in China, it needs a story of its own,” Mr Meerwald explained.
“This is a journey a number of importers are on.”
There were also logistical challenges, including the requirement for all livestock to be processed within 14 days of arrival, and limitations on how local infrastructure operates, that had added complexity and cost, Mr Meerwald said.
Harmony has one more shipment contracted before the end of year but after that it will “only take cattle live-ex opportunities as they come up” and focus instead on the grainfed program it had been running parallel.
Similarly, its live sheep exports to the Middle East will continue only on an opportunity basis.
The plan is to double grainfed numbers to around 12,500 Wagyu and 3500 Angus, plus some additional cattle.
The purchase of the Dimboola feedlot in north west Victoria is expected to be finalised early next year and Harmony will retain its Westbeef feedlot in WA, with plans to invest in on-site water infrastructure to provide secure supplies.
It will also continue to feed cattle at Rancho East in WA and at third party feedlots, one of which is in NSW.
Harmony’s 100-day grainfed brand Taurindi Beef will soon be joined by other market-specific brands, with both domestic and export markets the target.
“Focusing on domestic programs that we have substantial control over will reduce volatility and provide a stable base from which the business can continue to develop,” Mr Meerwald said.
As a result of the restructure, Harmony’s grazing properties Mt Fyans in Victoria and Rancho East in WA will be sold.
“The refined business model concentrates our resources on intensive feeding programs and the assets that support them,” Mr Meerwald said.
“This aligns much more favourably with the Board’s strategy and allows these two excellent grazing properties to be available to cow calf producers or backgrounders who will be able to maximise the significant potential of each farm.”