IF YOU run a closed cattle herd, why aren’t you European Union (EU) accredited?
That’s the question that has been posed by a number of industry heavyweights speaking at breed conferences in the past month.
With domestic cattle prices remaining at depressed levels – a fortnight ago, heifers in Longreach, Queensland, sold for as little as $18.50 a head – the global outlook is for beef prices to increase, according to Australian Agricultural Company general manager marketing Jason Strong.
And in an ever-changing market, why would producers not want to have access to as many markets as possible?
Mr Strong – speaking earlier this month at the National Shorthorn Conference in Tamworth – said the creation of the EU grain-fed quota in 2009 represented a whole new opportunity for Australian beef.
Initially, the grain-fed quota was 20,000 tonnes, but in August 2012 it increased to an annualised 48,200t.
“Most importantly, the quota is tariff free,” Mr Strong said.
“But the grain-fed quota has also increased our grass-fed access and frozen and chilled sectors.
“There’s this perception that only heavy grain-fed bullocks are suitable for EU markets, but that’s not the only market.”
Since the new grain-fed quota was introduced, Australian beef sales to the EU have increased by 63 per cent from 2009-10 to 2011-12.
Mr Strong – who previously worked as Meat and Livestock Australia’s European retail manager in Brussels – said the value of that increase was over $40 million.
“Grain-fed beef sales rose from 299t in 2009-10 to 4793t in 2011-12,” he said.
Meanwhile, grass-fed sales also increased by 4pc in the same period.
“Australia has maintained and slightly increased its traditional EU business, while capturing new grain-fed business in the EU.”
The current EU beef quota regime allows Australia to access markets including the 63,703t allowed for manufacturing meat, 53,000t for frozen beef and the 7150t High Quality Beef (HQB) quota.
For cattle to be eligible for export to the EU, they must be accredited under the EUCAS (EU Cattle Accreditation Scheme) system, which means they must be HGP-free and come from EU accredited farms.
“As supply is limited, this effectively means producers often receive a premium for EU cattle,” Mr Strong said.
This premium varies depending on market conditions and buyers, but it does exist.
Mr Strong said the Coles HGP-free program, while subject to much criticism, had however increased the demand for HGP-free animals, which gave EU producers more options.
“Becoming EU accredited means that you are opening the door to another market option,” Mr Strong said.
“It increases our livestock supply base, and opens up different markets for eligible cattle; historically, it was largely just a finished cattle market, but now there is a market for feeder cattle and EU cows.
“It also increases the volumes of other product types that can be sent to the EU such as manufacturing beef.
“As the EU herd increases, Australia can take advantage of other EU quotas historically under-utilised and unaccessed by Australia.”
Europe has 500 million beef consumers with an annual beef consumption of 8.5m tonnes.
Historically a grass-fed market for Australia, it was constrained by quotas and high out-ofquota tariffs.
Up until 2010, Australia consistently exported around 8000t of beef to the EU.
Premiums for Wilcannia's new premium
OUT at Wilcannia, Lyndall and Tony Bennett of Dromore Station have just become EU accredited and are already reaping the benefits.
After attending a field day at Rockdale feedlot recently, Mrs Bennett decided to put in an application for accreditation.
“We don’t ever use HGPs, we don’t trade cattle and we don’t buy in cattle except for bulls,” she said.
“We thought we might as well try to get a premium and down the track, we might be able to sell some females.”
After sending off the application, the Bennetts got approval back in four to five days.
Earlier this month, the Bennetts sent 50 steers to Rockdale that they had booked in a month ago and were paid $2.05 a kilogram.
“That’s a fair premium over a truckload,” Mrs Bennett said.
“People had been trying to talk us into becoming accredited for years but we thought it was all too hard.
“As it turns out, it couldn’t be much easier.”
She said the only thing some people might need to do would be to buy an NLIS scanner.
“You need to have a reconciliation of the tags bought and sold, but that’s pretty easy,” Mrs Bennett said.
“The only other things are that you have to be 100 per cent HGP free and you can’t buy in cattle unless they’re EU accredited too.
Mrs Bennett was positive the move to EU accreditation would pay off.
“We’ve only had it a couple of weeks but so far it looks good,” she said.
The Bennetts run 600 Shorthorn and 350 Hereford breeders on the 80,939-hectare Dromore Station.
Keeping options open at 'Somerton Park'
ON THE Central Tablelands, Grahame Edgell, “Somerton Park”, Sodwalls, has been EU accredited since November 2009.
“I decided to become accredited because it was easy to join,” he said.
“I was – and still am – a CattleCare accredited farm so I already had the records in order.
“The other reason was to use it as a marketing tool, and there was no cost associated with it.”
Mr Edgell said with CattleCare, there was an annual audit and fee, while there is no fee to be EU accredited.
“The benefits are of course higher prices, but we also need to weigh up the other costs associated with being on the Central Tablelands; the closest feedlots and abattoirs are in Queensland and southern NSW so we have to take into consideration things like transport,” he said.
“It does give you another avenue though; my cattle aren’t just sold to the EU, they’re sold for the highest market price at the time of sale.
“That can be dependent on season so it just depends where the best price is, but I tend to sell to the EU and MSA (Meat Standards Australia) markets.”
Mr Edgell said he mainly sold steers, while heifers were generally retained and resold as PTIC breeders.
“I’ve had success with selling EU PTIC females, there’s definitely a market for that which will get stronger as we get more tonnage to the EU.”
Mr Edgell runs about 180 purebred Murray Grey breeders on his 245-hectare property and said being EU accredited fitted in well with the quality assurance program he had on his farm.
“As we gain wider acceptance overseas for our high quality Australian cattle, the demand is only going to increase,” he said.
“When it comes to selling our cattle, we’ve got to get the best prices we can and that’s why I’m in it (the EU market).”
