Beefed-up Brazil's feedlot focus

The potentially bad news, however, is Brazil's 217.5-million head beef industry is also increasingly shifting production to higher value, more consistent, quality lot-fed product.

Feedlot turnoff in Brazil is set to jump from an estimated 4m head this year to about 9m in eight years, according to Australia and New Zealand (ANZ) Banking Group's global agribusiness research head, Michael Whitehead.

Brazilian feedlot capacity is tipped to be about 4.5m by 2023 - or about three times Australia's current capacity, where a record 84 per cent of lot feeding space is now occupied.

More grain availability and the desire to avoid quality inconsistencies caused by variable seasonal conditions for pasture fed beef have driven a gradual swing towards feedlots in Brazil for the past decade, but Mr Whitehead said the pace was now moving faster.

Semi-intensive beef production was also expanding at the expense of traditional grazing operations.

"In much the same way that dairying has pushed into traditional sheep grazing country in New Zealand, land competition from grain could really change the cattle industry and particularly the feedlot structure in Brazil," Mr Whitehead said.

"They are certainly looking at improving their quality focus and the appeal of Brazilian beef to export markets, including selling opportunities into the US."

In fact ANZ's latest SWOT (strengths, weaknesses, opportunities and threats) analysis of Australian beef markets notes the US negotiations with Brazil and Ireland, among other countries, could open up new competition for our strong beef export trade to North America.

"It's always good to be aware of what the competition is doing," Mr Whitehead told an ANZ forum at Beef Australia 2015 in Rockhampton.

While Australia produced just 4 per cent of the world's beef, it would be one of just seven major exporters cashing in on increasing global import activity in the next eight years.

Brazil's cumulative net exports would total about 17.7m tonnes in carcase weight equivalent terms between 2017 and 2023, followed by India (16.7m), Australia 15.3m, then Argentina and NZ (about 4.5m), Uruguay, Paraguay and Canada (about 3.2m).

The US, South Korea and Egypt were each anticipated to have cumulative imports outweighing their exports to the tune of about 3.7m tonnes, while imports by China, Vietnam and Japan would range from 4.6m to 7m.

But Mr Whitehead also warned global trading competition was intensifying, and while Australia's total food exports to countries in the nearby South East Asia (ASEAN) region were growing, our share of the region's agriculture import market was shrinking.

ANZ expects ASEAN's combined and growing economies will take over from China as key markets for Australian farm exports in the next 10 to 15 years.

ANZ's Australian agribusiness head Mark Bennett said the creation of the ASEAN economic community later this year was expected to spur economic and consumption growth inside the trade zone.

It would double the potential value of Australia's overall farm exports to the region to an estimated $US15.5 billion by 2025.

By 2030, half of the region's 650m people would also be aged under 30, creating a powerful emerging middle class with high rates of consumption.

However, Mr Whitehead cautioned that each different ASEAN country, ranging from Indonesia to the Philippines and Vietnam, had "quite distinct consumer bases".

"Specific trade strategies need to be developed to fully realise the opportunities emerging in these different markets," he said.