Tender time for Wagyu warrior
A WA Wagyu beef producer has been chosen to lead the industry into challenging times.
Albany Wagyu enthusiast Peter Gilmour has been appointed Australian Wagyu Association president, replacing South Australian Scott de Bruin, who retired from the board to manage his rapidly expanding Wagyu interests along with the broader de Bruin Group.
Mr Gilmour owns Irongate Wagyu, where he runs about 2500 head of the premium breed on his 1000ha property, along with seven partner breeding properties in the area.
He also has a partnership with Butterfield Beef in Borden, where he feeds his cattle alongside about 14,000 head that pass through the feedlot each year.
The new leadership team will include John Hammond from Tasmania as senior vice-president, Chantel Winter of Queensland as junior vice-president and Stephen Binnie from NSW as treasurer.
Mr Gilmour thanked his predecessor and said Mr de Bruin had been instrumental in breed's rapid growth in demand in the Australian beef industry.
But Mr Gilmour also delivered a stark warning the producers faced significant challenges, with rising input costs and a declining premium for the sought-after marbled meat.
Mr Gilmour credits four years of living and working in Japan in the 1990s, where he was first introduced to the "wonders of Wagyu beef" and its "amazing eating quality and health benefits" as the motivation to breed Wagyu cattle.
"The big problem for Wagyu breeders is the J-curve we've seen in pricing this year which is really problematic," he said.
He said Wagyu prices had traditionally attracted a 100 per cent premium on the base Angus price for full breeds and 50 per cent for mixed.
"The prices have dropped to around 75 per cent for full breed and 37 per cent for mixed this year," he said.
"And when you look at the increasing feed prices meaning that you are paying up to $1800 for an animal, it starts to become an unrealistic proposition.
Mr Gilmour said vertical supply chains were the safest way for the high-value industry to remain viable.
"We already sell a lot of our product to Margaret River Premium Meats, which is vertically integrated and able to better manage the high prices," he said.
Mr Gilmour said the cost of grain for feed and limited water had restricted the number of cattle he could breed.
"We have spring and autumn calving seasons, as well as an embryo transfer program, which is not seasonal," he said.
"It is about 300mm behind normal rainfall for Albany.
"However, the rainfall has been spread out and as a result we've had tremendous seed.
"It is quite ironic that we've had less rain but spread out evenly over the year, which has meant an excellent year for feed supply.
Mr Gilmour said consistent genetics was critical to adding value.
"The EU can sometimes demand cattle to be fed up to 500 days," he said.
"Wagyu requires 200 days for marbling to occur and that is the reason genetic knowledge of the breed is critically important to maintaining profitability, and that amount of days will add about $1000 to the cost of the animal.
"The work that has been done establishing reliable EBV data will ensure breeders can determine they will get the right marbling score when it comes to sale.
2015 PRICES *
·Base Angus price $4/kg.
·Wagyu x Angus $5.50/kg (37.5 per cent premium on Angus price).
·Wagyu pure breed $7/kg (75 per cent premium on Angus price).
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