Alternative Production Analysis

Summary

Alternative red meat production systems, such as those defined as “organic” and “Natural” as well as a collection of niche certification systems, are being seriously considered as alternatives to conventional production by an increasing proportion of red meat producers.
These alternative red meat production systems are distinct from conventional production systems due to their deliberate attention to the prescribed and potentially certifiable principles of organic agriculture.
Although these principles may be common to both conventional and alternative agriculture, they are proactively pursued in alternative production and are generally governed by standards, audits or certification, thus presenting a potential marketing advantage.
Global and domestic demand for alternative produce has increased significantly over recent years. The organic industry is the most developed and well organised sector within the alternative production industry and is estimated to be worth 40 billion USD globally, of which the Australian organics industry contributes 350 million USD.
Mainstream supermarkets are now stocking dedicated lines of organic produce and specialty organic food stores are becoming established in markets in Australia and around the world. Increased demand has led to price premiums for organic and Natural produce and contributed to the development of these industries. The sustainability of premiums is, however, questionable in some markets with reports of consumer price resistance.
Much of Australia’s environment is compatible with alternative agricultural production. This is reflected by Australia now having the greatest amount of land of any country certified as organic.
The majority of this certified land is in Australia’s rangelands and dedicated to extensive grazing.
Australia exports the majority of its alternative produce as certified organic with red meat comprising 43% of the total value of organic exports. Beef is by far the largest contributing sector with the organic lamb market remaining undeveloped and no established markets existing for organic goat meat. Apparent underlying demand for organic lamb and goat meat suggests significant opportunity in these areas. Pork and poultry contribute less than 1% of total value.
The market for alternative produce that is not certified organic is less developed and constrained by inconsistent or nonexistent standards and a lack of market awareness and acceptance.
The inconsistency of supply in both quality and quantity and the lack of organised supply chains remain the most significant factors limiting growth in the alternative red meat industry. This has been exacerbated in recent years by drought conditions and the inability of alternative agriculture producers, especially those supplying defined certified organic supply chains, to finish their livestock in accordance with certification.
Confusion surrounding certification, nationally and internationally, is further hampering industry development by discouraging producers and deterring consumers.
Significant opportunities exist for the development of the alternative red meat sector in Australia if supply constraints can be overcome. Opportunities exist for Meat & Livestock Australia to contribute to the development of the alternative red meat sector through producer education and supply chain development.