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Australian Wagyu cattle labelled as Japanese and sell for $30,000

- Sunday, March 15, 2015

Australia Wagyu beef is selling in Japan at up to $30,000 a carcass, and consumers don’t even know it’s Australian. This could lead to the conclusion that there is little value in an ‘Australian’ brand, but there is a bit more to the story.

Wagyu genetics were introduced into Australia in the 1990s, and Japan was really the only market for Australian Wagyu. Since then, the domestic market and many other global markets have begun to flourish as restaurants and foodies gain an appreciation of the unique characteristics’ of Wagyu steak. What makes this meat sell at such a premium price is the Wagyu breed's remarkable marbling ability, enabling them to produce heavily marbelled beef which has a velvety sweet flavour when the fat dissolves as the meat is cooked. 

Farmers in Victoria are now selling some of their full-blood Wagyu to the country’s top restaurants, like Nubo in Melbourne, at $1,060 a kilogram. 

Unlike the domestic market where fat depth and cover is important for grading and price, Wagyu cattle for live export are sold purely by weight when they are 8-12 months old. Australian Wagyu producers sell to agents/exporters who are required to keep cattle in quarantine for 30 days. The cattle are then transferred to Japan where, according to national branding regulations, once they have been fed in a feedlot for 400-500 days, these Australian ‘born and bred’ Wagyu’s are eligible for a Japanese ‘passport’, and can be marketed as Japanese beef. 

The Japanese Wagyu market is very closed to outsiders, and there are enormous price differences between imported and ‘Japanese’ Wagyu. It is also a premium market that can be easily over and under supplied, and is hence highly volatile. This became evident during the GFC when there was a slump in Australian Wagyu exports to Japan, with exports halving over a relatively short period of time. However, high risk can bring high rewards, and those lucky enough to have secured a spot in this exclusive club have seen impressive returns over the longer-term.

Some of this markets success can be accredited to the Australian Wagyu Association which has helped build the Japanese export market from scratch and had a heavy influence in developing domestic demand. 

Another major reason for the success of Australian Wagyu exports is Australia’s high biosecurity and animal health standards, along with the ability of Australian producers to comply with the strict rules and paperwork associated with this market. This means that it is actually the “Australian” brand that facilitates access to this market, even though the end consumers of the product probably have no idea that it is actually Australian-born product which they are eating.

Australia’s Wagyu market success in Japan is a reminder that focus for Australian beef producers should be on meeting the needs of high-end value markets. Australian-produced beef will never able to compete on price with the likes of Brazil and India in supplying cheap beef to Asian markets. However, opportunities exist for farmers to continue exploring other avenues such as organic product, grass fed product, and higher-value products like Wagyu in other international markets such Europe and Middle East.
Even if consumers are blissfully unaware of the origin of their Wagyu meat, it is the Australian reputation of quality and traceability that has enabled Australian beef producers to benefit from the premium Japanese market. 

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