Tasmanian beef: profits, production and the plan

Tasmanian beef: profits, production and the plan

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There's already plenty mainlanders can learn from Tasmania's beef industry. Where to next and can it grow?

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Tasmania might still be known for its orchards but the reality is that the most common farm in the island state is beef or sheep and beef grazing.

According to Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) statistics, one in four farms are specialised beef and another nine per cent are mixed grazing.

It's likely there are plenty more, too, says Tasmanian Red Meat Industry Steering Committee chair Brett Hall.

"I think one of the big strengths of Tasmania is its diversity," he said.

"Even a lot of the milk producers have often done a bit of cropping as well as having a dairy operation or also run some beef cattle.

"The diversity has helped people be more resilient when there's downturns in price; they want to stay away from too big a commitment to commodity prices."

The strategy's clearly working.

ABARES data shows that, for at least the past three years, the state's beef producers were among the most profitable in Australia.

While Victorian producers averaged rates of return of 0pc in 2017-18, -1.3pc in 2018-19 and -0.6 in 2019-20, Tasmanians recorded positive results throughout, despite much of the state experiencing very dry conditions since January 2017.

But, perhaps surprisingly, ABARES also says Tasmanian farmers are pretty close to their counterparts in the southern states when it comes to farmgate costs.

The average Tasmanian farm recorded a liveweight cost of production from 2015-16 to 2017-18 of 218 cents a kilogram, putting it third after Victoria at 247c/kg and NSW at 241c/kg.

Ravaged by drought, Queensland was only just behind at 215c/kg, far more costly than South Australia's 194c/kg, Western Australia at 183c/kg and Northern Territory's 141c/kg.

Perhaps the secret of Tasmania's profitability lies in premiums over commodity pricing; tourism has made the state an expert in value adding and marketing.

While the value of its farmgate beef produce is $329 million, the processed value was $545 million, and accounted for 32.5pc of the state's international food exports.

Nevertheless, Tasmania remains a small part of the Australian industry, accounting for 2.9pc of the national production in 2017-18.

SOLID: Production is steady. Source: ABS, MLA.

SOLID: Production is steady. Source: ABS, MLA.

Mr Hall thinks that's not such a bad thing.

"Probably because it's not a large percentage of the overall production in Australia, we've had to aim for high-value niche markets," he said.

"To suit those markets we've had to develop brands, really focus on what suited the consumer rather than just what looks good in the paddock, make sure we supply to all the parameters of those brands and audit all the claims we're making.

"I think we've got the jump on a few other states because we had to focus in on that to maximise the value of the livestock we're running."

Greenham's Cape Grim strategy

That's something Greenham, which processes about half of Tasmania's beef, was quick to embrace, marketing and communications manager Jelena Radisic said.

"We always saw that there was premium quality cattle coming out of Tasmania," she said.

"But once MSA came into effect, that really changed things, giving us the ability to grade the the meat and show people that this is quality product coming from Tasmania.

"That's what really built our strategy and then led to creating our Cape Grim brand."

TRANSPARENCY: Origin Meats takes chefs to Cape Grim.

TRANSPARENCY: Origin Meats takes chefs to Cape Grim.

Branding Tasmanian beef as grass-fed, GMO-free and 'clean' has been a boon for the state's entire red meat industry.

Greenham established Cape Grim in 2007 and then followed up with the Never Ever program, Pure Black, Robbins Island Wagyu, and launched just last year, The Vintage Beef Company.

"Certification programs really give farmers a platform to market and sell their product to the best restaurants around the world and get them a premium price for for their cattle," Greenham marketing manager, Jelena Radisic said.

Having brought groups of chefs to tour Cape Grim farms, Chris du Plessis knows the value of a backstory better than most.

"When you see cattle in their natural environment, you really do appreciate the work that goes into these cattle by farmers and the processing plants to provide such a premium product," Mr du Plessis said.

Grass-fed gains

His business, Origin Meat, has a foodservice arm and a high-end Sydney retail butcher's shop, where he'd seen growing consumer interest in animal welfare and a preference for flavour build demand for grass-fed beef.

And Tasmania is the only state that supplies nothing but grass-fed meat for Meat Standards Australia grading.

Mr du Plessis said demand for premium Tasmanian beef remained strong despite the economic shockwave created by the pandemic.

"While restaurants are restricted, there are people who want to cook restaurant quality meat at home and they are going for a premium product," he said.

"They might not eat meat every day, they might eat meat twice a week.

"But when they do eat meat, they want a very, very premium piece of beef that has been sourced ethically and has a story behind it."

Tasmania's red meat plan

Storytelling is central to the Tasmanian Red Meat Industry Strategic Plan, which Brett Hall first fronted in 2015.

The strategy identified three core themes that had the potential to lift the industry's profitability: securing the production base, improving market access and communication.

It's taken five years of lobbying but Mr Hall said the Tasmanian Government had now provided three years of funding for an executive officer who will make the plan operational and recruitment was already underway.

He said the government recognised the red meat industry's complementary value on land earmarked for high value crops on newly developed irrigation schemes.

"We can keep growing the industry because pastures are a key part of sustainable rotation of that irrigation land - you still need livestock and animals in the mix for for the best returns," Mr Hall said.

"It's often been taken for granted that the industry is always here and always producing but people are starting to see the true contribution it makes to the economy.

"There's a lot of potential in upgrading pastures and operations here to be able to grow the industry more."

Mr Hall said making use of irrigation for summer forage crops and to support better pasture all year round could lift consistency of supply and build production.

Government-owned company Tasmanian Irrigation has built 15 irrigation projects, which deliver 150,000 megalitres with 95 per cent reliability and another 10 projects are in the pipeline.

The changing climate was also beneficial in some of Tasmania's colder regions, Mr Hall said.

"In some areas, they quite easily could double production with better pastures, management and genetics," he said.

"With the change in the seasons, we're actually seeing warmer winters and a wider wedge of feed growth.

"I'm pretty confident that, over the state, we could increase livestock production by 30pc in the next decade."

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