Australian Wagyu beef producers have seen almost a three-fold increase in demand over the past year as local and international popularity for the beef delicacy continues to grow.
Managing director of Irongate Wagyu, Peter Gilmore, told the Australian Broadcasting Corporation (ABC) that interest in his Western Australia-based company’s carcasses and genetics has tripled over the last year, with the price of full blood Wagyu fetching almost AU$450 (US$313) per kilogram.
“The increase is demand, I would say, is around 300 percent,” Gilmore said. “If we had three times the number of animals, we probably could not meet that demand.”
While Irongate sells genetics to Australian producers, Gilmore said that the Australian beef industry has the potential to expand and even equal Japanese production.
“[Japan is] a net importer of meat, so they don’t really need to export,” Gilmore said.
“The international demand for Wagyu has been quite extraordinary over the past year, the amount of inquiry that has come in at a range of different levels from many different countries.”
Gilmore said that he has seen a very big uptick of purchases in relation to production where production plants are trying to “lift their own farm gate receipt.”
“Wagyu produces a significant premium over the rest of beef production,” he said.
For instance, the ABC reports that Pardoo Beef Corporation, which is also based in Western Australia, has invested more than AU$75 million (US$52 million) in its Wagyu operations, and its owner Bruce Cheung has plans to run more than 100,000 heads of cattle across the Pilbara and Kimberley by 2035, which he estimates to be worth of AU$3 billion (US$2.1 billion).
Currently, the biggest market for Pardoo is China, which takes around 51 percent of his company’s products.
“We are also in markets such as Hong Kong, Thailand, Middle East, Singapore, Philippines, Korea, Japan, UAE, Saudi Arabia, and we are in talks with Indonesia,” he said.
Japan is Australia’s largest beef export customer, with 18,551 tonnes of Australian beef exported in July. South Korea is Australia’s second-largest customer, followed by China, reported Beef Central.
However, the total volume of beef exported to all markets in July was 74,949 tonnes, down six percent from the previous month.
Domestic Product and Disease Concerns
Domestic demand for Wagyu has changed since the pandemic and has correlated to a changed health focus, Gilmore said.
“People understand that intramuscular fat can actually be good for you … I think there has been a real health focus shift and enjoyment for produce,” he said.
“If you go back two years when COVID first started, we had very little domestic output, almost nothing,” he said. “Now domestic would be 40 percent of our total production.”
But an outbreak of foot-and-mouth disease could stop production and trade in its tracks.
“If foot-and-mouth disease was introduced into Australia it would potentially decimate the Australian Wagyu beef breed, along with other elite genetics within the cattle breeding industry,” Scott Richardson, the managing director of producer and distributor Stone Axe Pastoral Company, told the ABC.
“It would take years and years to rebuild the herd to its current numbers.”
The Australian Wagyu Association has been approached for comment.