Successful Models of Vertical Integration in the Beef Industry
Beef producers farm today in a social environment where beef consumers demand to know more about their food; expecting transparency on ethical, sustainable and environmental practices within the industry. Consumer awareness is forcing a shift away from the traditional model of maximum production at minimal cost. Internationally, the industry is adapting with a move away from traditional beef supply chains to the implementation of modern value chains that reflect the expectations of engaged consumers in a competitive market place.
Agriculture in Australia is a game of managing risk. Beef producers deal with the risks posed by a volatile climate on a daily basis, alongside the market risks determined by the commoditised nature of the beef industry where they are the ‘price-takers’ in the supply chain. This report initially examines the fundamental factors that determine the present nature of the Australian beef industry: climatic volatility; export dependency; competition and distrust; and consumer consumption trends.
Secondly, the report investigates international models of vertically integrated red meat value chains that have successfully responded to the changing landscape of food culture. It explores businesses that: own the entire supply chain from production to retail; work with trusted suppliers to add value to all partners in the supply chain; develop alliances to market their differentiated products; and cooperatives where members work together to benefit producer and processor.
Finally, the report draws together the market opportunities and threats facing the industry and how those factors influence the future of the Australian beef industry.
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