Page 19 - Beef-Week-2022

Stock Journal Beef Week | 2022
Rising overseas incomes

forces beef to pivot

By SHAN GOODWIN
ISING incomes around
the world and the
Rway that changes how
much red meat people can
buy, and what they want
from it, has long be touted
as a key opportunity for
livestock industries.
Agriculture economists

are now agging just how
substantial, and time-
sensitive, the potential is.
Billions of additional
people around the
world will be at, or very
near, high-income food
consumption patterns
within the next two CHANGE: Rising global incomes will change the demand dynamics for beef and the opportunity is now right
decades, analysis from The on the doorstep, agribusiness economists say.
Commonwealth Bank says.
Meeting their changing
For the meat business,
demands will require a and Africa and include harmed in the process that could mean the
of getting it to market
Brazil, with more than
large expansion of food 200 million people. - no slave labour was animal protein substitute
production capacity CBA predicts around employed, no one was industry has to expand far
and for sectors like red a third of the fast-track exploited. That ows more quickly.
meat, substantial shifts in nations will see their onto animal welfare “Right now our best
supply chains, CBA agri average income exceed the concerns. factory for meat is an
commodities strategist high-income threshold by “And the big one animal, but that may
Tobin Gorey said. 2040 and another half will coming is environmental not be the case going
The ‘more, and better, move into the US$20,000- sustainability, especially forward,” Mr Gorey said.
food’ narrative had been $40,000 range, where for red meat. Livestock Cyclical disruptions, and
a mainstay of optimism transition accelerates. industries will have to volatility, are also likely to
about agriculture’s future “Fewer of the slow-track nd a way to reduce and be far more distinct.

for at least two decades, nations will, but there will offset greenhouse gas “Ag industries will spend
he said. be some and these are big emissions.” more time at close-to-peak
“The income growth numbers of people we are Mr Gorey said all these production,” Mr Gorey
dimension of that talking about,” Mr Gorey attributes were already said.
narrative is playing out as said. demanded by consumers “The instances when
expected,” he said. in high-income brackets. supply gets very tight and
The CBA uses US$40,000 What that means “But in a nutshell, there pushes prices up are likely
as the high income The more money a are six billion people in to increase. Extended
threshold and indicates consumer has, the more the world and only one episodes of higher prices
there will be two to three attributes he or she seeks billion are currently in that will be important to
times more high-income in food. income bracket. By 2040, fund and facilitate the
consumers in the world “That impacts sectors there could be an extra 3.5 production changes
within two decades. like meat and dairy to 4b. And more to come required.”
CBA analysts identify 40 most, which involve a lot quickly after,” he said. COVID-19 had brought
nations who are on a ‘fast- more value-adding than “The sheer scale of that to the forefront ‘just-
track’ path with income vegetables and grains,” means change has to come in-time’ supply chain
growth. Most are in Asia, Mr Gorey said. quickly for global beef management and this
with another large bloc in Food safety is the suppliers.” would increasingly
Eastern Europe. China and rst cab off the rank of become important as the

India, which each have emerging demands as Disruption beef industry moves to
populations of 1.4 billon, spending power grows, The CBA analysis says meeting the demand of
both fall into this category. followed closely by fresh. disruption will be a part of larger populations with
They said while some “Then it is variety - beef the journey for agriculture, greater spending power,
of the impact of their will have to be suitable and will be ampli ed if the Mr Gorey felt.

transition on feed demand for cuisines and dishes shift to higher incomes “COVID has certainly
had already occurred, from cultures all over the happens faster than created a more open
most would still be in the world,” Mr Gorey said. predicted. attitude in supply chains

future. “The next phase is “It may be the scale is so to exibility and pivoting,
The ‘slow-track’ nations the desire to know how large we have to entirely which will serve the
are concentrated in Latin food was produced, that rethink how we produce industry well in the
America, the Caribbean someone else was not foods,” Mr Gorey said. future,” he said.
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