Report Synopsis

Grassfed and Organic Wagyu: Opportunities for unconventional Wagyu in luxury beef niches

Sarah Hughes

This report investigates the production and marketing of Wagyu to ascertain opportunities in Australia for models other than the long-fed Wagyu model. It also investigates consumers’ willingness to buy the different cuts of the carcase.

Red meat contains numerous vitamins and minerals that are good for us, but there is also a concern in recent years that high consumption of red meat can be bad. Along with this has come a growing belief that grassfed beef is better for us than grainfed beef.

Wagyu beef’s distinctive marbling quality is the product of an intensive grain diet combined with a genetic potential to marble. However, grassfed Wagyu still produces the distinctive marbling, albeit to a lesser extent than grainfed Wagyu, setting it apart from conventional beef.

The meat from cattle that eat only grass contains two to three times the amount of healthy fats compared with cattle that are largely grainfed. Healthy fats are associated with reduced cancer risk, reduced cardiovascular disease risk, and better cholesterol levels (French et al. 2000). Grassfed beef has also been found to have a healthier ratio of omega-3 to omega-6 fatty acids and often also contains higher levels of antioxidants such as vitamins E and A.

On the author’s travels to numerous markets, it was commonplace to hear that grassfed was “sexier” and more in-demand than organic beef, a view strengthened not only by the perceived health benefits of grassfed beef but also by the corporatisation of organic farming, which has led to a perception that organic beef is less natural than grassfed beef. Among others, this was reflected in comments made by key beef importers including George Abrahams in the United Kingdom (UK) and Pilot Foods in the United States of America (USA).

However, from a producer’s point of view this study found that, as attractive as the idea is of taking grassfed Wagyu all the way to market, it is probably not commercially viable on a large scale. Although feedlot entry prices have fallen due to increased supply, they are still very strong. Also, the real value of the long-fed Wagyu model lies in its ability to achieve excellent prices for the whole carcase. This is why these carcases attract huge premiums. Grassfed Wagyu, on the other hand, has a lesser degree and consistency of marbling, with some cuts faring better than others.

Nonetheless, there are niche opportunities born of the fact that, globally, Wagyu is still experiencing rapid growth. Indeed, many potential customers have not even heard of Wagyu beef, let alone tried it. Where there may be an interesting opportunity for grassfed Wagyu in these production systems is with by-products, i.e. cull Wagyu females that have been taken out of the breeding herd for age, type, or pregnancy status reasons.

Beef wholesalers are interested in unique beef brands and love the story behind the brand. There are certainly opportunities for those who are passionate about taking their product all the way to the end consumer. However, to be successful, these brands will need to be consistent in quality, reliable in supply, and offer a niche value proposition.

At Hughes Pastoral, in order to provide a consistently good product, year round production of grassfed Wagyu or organic Wagyu is possible, but not grassfed organic Wagyu, as this would remove too many supplemental feeding options from the toolkit.

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