South America's beef industry and its implications for Australia

In February, I had the privilege of travelling to South America. It was my first time on the continent, and I was eager to uncover the factors that make this powerhouse of an industry stand out on the global stage.

From the moment I arrived, it became abundantly clear that South America has the opportunity to build on its position in the world’s red meat market and why it continues to be a major player in the future of global food systems.

True taste

I was amazed at the quality of some of the beef. It was among the best beef I’ve ever tasted. At the high end, the quality was undeniable, but varied at establishment levels — from steakhouses to local restaurants.

Moreover, South America’s culture around beef consumption is unparalleled. It’s a core way that family comes together — to cook, eat and make memories. Every year, Argentinians consume 46.93 kg on average per person, the highest amount in the world, while Brazilians are the third highest, consuming just slightly less than Americans, at 34.59 kg. Comparatively, Australians consume 26.99 kg, in fifth place just behind Canada.

Scale and growth

One of the notable aspects of the South American beef industry is its sheer scale. Brazil has 220 million cattle on feed and processed 34.6 million cattle in 2023. Australia processes just 7.7 million cattle annually.

Brazil’s beef industry is a global powerhouse, with China serving as its largest export market. In 2022, China accounted for over 55% of Brazil’s beef exports, highlighting the country’s pivotal role in meeting China’s growing beef demand. Accordingly, Brazil is very focused on servicing this market and is always striving for a better product that suits the Chinese palate.

The Nelore breed, Brazil’s predominant cattle type, is renowned for its hardiness and is in fact the world’s most expensive cow. Over 80% of beef cattle in the country is either purebred or hybrid Nelore. Brazilian producers are increasingly focused on cross-breeding with European breeds, aiming to combine the Nelore’s resilience with the superior meat quality of European breeds.

What does this mean for Australia?

South America’s beef industry, with its vast land suitable for cattle grazing, presents a formidable challenge to Australia. Brazil alone utilises 41% (over 351 million hectares) of its land for agricultural use, with expansive pastures and established infrastructure. South American labour costs are also significantly lower than Australia, especially in primary industries. This, combined with its vast cattle inventory, brings down the unit costs significantly, enabling the region to scale into producing a range of quality to suit different markets and palates.

However, what Australia lacks in usable land size, we make up for with other advantages to produce high-quality beef. Firstly, our production systems have been optimised over generations to drive better performance. Over the years, Australian producers have continually refined their practices to suit the unique environmental conditions of the country, including diverse climates and varying landscapes. This has led to the development of highly efficient, scalable systems that are not only focused on increasing output but also enhancing quality and resilience.

Secondly, our strong export focus keeps the industry closely aligned with global consumer demands. This international perspective not only drives continuous improvement within the sector but also fosters a willingness to test and adopt agtech and other process innovations, ensuring that the industry remains competitive and adaptable in a rapidly changing global market. Meat Standards Australia (MSA) guidelines have driven better production outcomes, with 53% of all grain-fed cattle meeting these stringent quality standards in 2023–2024.

The competition between South America and Australia’s beef industries represents a microcosm of the evolving challenges and opportunities in global agriculture. South America’s dominance in scale and growth underscores the importance of land and traditional practices in feeding a rapidly growing global population. However, Australia’s future in the global market is not solely defined by land size but by its ability to innovate and adopt transformative technologies. Ultimately, this is where Australia’s strength lies; not in replicating others’ models, but in innovating for the future. In doing so, Australia can help set the standards for a new era of food production on a global scale.

All images courtesy Remo Carbone.