Wagyu on a bullish run

28 Oct, 2014 01:00 AM
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As we move into a phase of high growth, there is going to be a lot of bulls produced

APART from the general catastrophe of another global financial meltdown, it’s hard to see too many wrinkles in the outlook for the Wagyu sector.

By cattle registrations, Wagyu is now the eighth largest breed in Australia, and Australian Wagyu Association president Scott de Bruin says the Association is preparing for substantial growth over the next few years.

“This is by far the biggest Wagyu conference we’ve had,” said Mr de Bruin, whose family helped pioneer the local Wagyu industry from its base at Mayura Station, near Millicent, South Australia.

“There are a lot of new members, a lot of interest in the breed, and all the long-term players are really confident and looking forward to growing their businesses.”

Mr de Bruin credits some of the big brands in the business - and the Wagyu-dependent beef brands they have developed - with driving much of this interest.

“Companies like AACo, Rangers Valley, Stockyard beef are really driven in their Wagyu marketing, and they are really pulling the Wagyu through their brands,” he said.

Crossbreeding remains by far the biggest aspect of the Wagyu industry. A rough estimate is that of the 120,000 Wagyu and Wagyu-cross cattle on feed, around 90 per cent are crossbred cattle.

Producing beef for increasingly discerning consumers remains the great opportunity for Wagyu, Mr de Bruin believes.

A splash of Wagyu genetics has a substantial effect on beef eating quality. In Asia, in particular, a growing middle class is eating more red meat, and growing affluence in that middle class is pushing consumers to a better and better eating experience.

Domestically, too, Mr de Bruin sees Australians seeking beef that is consistently good, of good value, from a brand they recognise. Beef brands, rare 10 years ago, are becoming an important point of distinction.

The global shortage of beef could also produce unexpected outcomes, Mr de Bruin reflected. “Wagyu was driving people to be involved because of the price premium, but because of the global shortage of red meat the price gap between Wagyu and other beef might close.

"That might cause people to rethink their commitment to Wagyu.”

As consumers become used to quality beef, they are driving the Wagyu supply chain to improve. “We’re seeing that in our branded beef competition,” said Mr de Bruin. “Year on year there are more entrants, and the quality is more consistent.”

The growing sector is also increasing demand for genetics and seedstock, which is generating a response from those capable of supplying these markets.

As demand for Wagyu genetics builds, Mr de Bruin said, “It’s important that we continue to capture performance recording of our cattle”.

“As we move into a phase of high growth, there is going to be a lot of bulls produced. It’s important to record the performance of our cattle and give potential buyers the right descriptors, so they know what they are buying.”

“It’s a transition that people have to get used to.”

On the other side of the fence, entering the Wagyu business is not for the faint-hearted.

“People have to understand that Wagyu isn’t a one-year cycle of production. If you’re going to look at building a breeding herd, it’s a bare minimum of three years to produce a calf.

"If you decided to double production it might take 10 years, and a huge capital investment. There are barriers to entry to the market.”

Those barriers haven’t stopped a dedicated core of producers building the Australian Wagyu sector into a powerhouse that is now second only to Japan.

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