A DECLINE in expenditure in Japan, but greater emphasis on domestic and Indonesian markets and emerging issues like the environment are trends likely to emerge from important red meat marketing discussions in Sydney this week.
With the prospect of a slightly smaller MLA marketing budget next financial year and some big international challenges on the horizon, the red meat industry this week sat down to determine how to divide its 2010-11 marketing pie.
Next fiscal year's MLA marketing budget is likely to total $54.8 million in all markets, a slight decline on the current year, primarily due to a drop within the grainfed levy stream.
That will follow a significant forecast drop in transaction levy revenue over the next three months, as producers hold cattle longer to take advantage of the season.
Seven industry taskforces covering key markets - Japan, Korea, North America, domestic, South Asia/Chinas, the European Union and the Middle East/North Africa - have held their annual meetings in Sydney since Monday.
Outcomes will be built into MLA's 2010-11 annual operating plan, due for completion by late May.
As an example, the domestic taskforce which met on Tuesday attracted a record 55 industry members, representing producers, processors, wholesalers, supermarket and independent retailers, food service operators and other stakeholders.
While no public announcement has yet been made, Agriculture Minister Tony Burke has assured peak councils that he supports the continuation of the $5 cattle transaction levy, supported by a significant majority of industry members at last November's MLA annual meeting in Darwin.
On that basis, about $3.66 from each $5 grass and grainfed levy paid will be devoted to marketing work in 2010-11.
The various market taskforces meeting this week faced a range of competing demands for the available funds, MLA managing director David Palmer conceded.
"There are some enormous challenges across the basket of markets Australia services, but these marketing taskforces have now stamped themselves as an incredibly valuable instrument for guiding the industry's marketing strategy," he said.
Just some of the big ticket issues on the table this year include:
- the aggressive competitive challenge being mounted by US exporters in key export markets like Korea, where the US Meat Export Federation is currently spending $1 million monthly on promotion to build market share.
- a push by some peak councils for greater marketing resources to be devoted to MSA/EQA education among domestic consumers.
- The need for greater expenditure on emerging issues like environmental management and animal welfare. Following a doubling of the budget on environmental activity to $2 million last year, a further rise is likely in the 2010-11 allocation.
- In response to the modest outlook for beef trade into Japan in 2010, funds devoted to the Japanese market this year are likely to be reduced. The industry this year will rely more on the strength of 'embedded awareness' of Australian beef in Japan, as well as brand-based jointly-funded marketing under the Industry Collaborative Agreement program.
- MLA will open its first permanent regional office in Jakarta on March 20, in recognition of the growing importance of Indonesia in both the live export and boxed beef trades. The new trade office will join the existing regional offices in Japan, Korea, the Middle East, US, Europe and China.
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