The Australian beef industry sees opportunity in the misfortune wrought by sensational coverage of the lean finely textured beef issue in the U.S. In fact, Simon Quilty, an Australian writer on meat export issues, sees the positives for Australia’s beef industry as “enormous.”
Quilty says only imported beef will be able to fill the supply hole if retailers and fast-food outlets continue to eschew LFTB product. He predicts Australian beef exports could potentially increase by 60% in the next 12-18 months as Australian beef is used to fill the void in meat supply left by LFTB, and says industry sources estimate the potential market value to fill the LFTB void as $385 million.
• LFTB once competed directly with imported beef and priced itself accordingly at a 10-15 % discount to whatever imported beef was trading at. The removal for Australian beef of the competition meat (LFTB) at a constant 10-15 % of the Australian price lifts the value of Australian beef instantly. LFTB, due to the discount marketing it did, was a constant drag on Australian beef pricing. It is no longer.
• There is also an indirect benefit for Australian beef due to the downturn in usage for LFTB by increasing the overall demand of lean beef in the U.S. This has come about due to more fat meat on the U.S. domestic market which has increased the need and value of imported lean beef. Fat meat was used by BPI to turn discarded fat trimmings from processing plants into the lean meat. Without the demand for LFTB, it means more fat meat is on the U.S. market, which in turn increases the need for lean meat, such as Australian lean beef to mix with it.