Relationship building helps double livestock exports

A commitment to relationships in Japan and Australia, respect for supply chain profitability and a focus on quality has seen Edwards Livestock double exports in less than a decade.

By

Edwards Livestock Agency, exporters of live Wagyu cattle to Japan, was founded in June 2010 as a family partnership between Bill and Sue Edwards (of 26 years’ industry experience) and their son Matt with his wife Alice.

“We were born and bred around cattle,” Matt explains. “Alice’s family were Brahman breeders on the northern New South Wales coast, Clarence River, and when I met Alice, she was Australia’s first female cattle buyer. She was working for Australia Meat Holdings. It was always about cattle for us, and Japan, and it will always be that way.”

Bill and Sue soon retired, leaving Matt and Alice to manage the business. Their mission was to continue what the senior Edwards had developed and to grow the livestock agency by continuing to build trusted long-term relationships both in Australia and their key export market, Japan.

A boat every 40 days

Family business succession is very important to the Japanese.

“Our relationships are maintained by constant contact,” Matt says. “It’s an export business unique to Australia in that we send a boat every 40 days, so it’s a high contact business. They’re relying on us. We’re constantly talking to them via email, they visit our supply two to three times a year and I visit Japan two to three times a year.”

It was Bill who identified the value in respecting the profitability drivers at each step in the supply chain, a lesson Matt and Alice have taken forward.

“Our biggest value,” Matt says, “is being able to understand that everyone through the supply chain – from the breeder at the bottom to the supermarket in Japan – they all need to make a reasonable return. We’re very conscious that there’s not one section of our business that takes all of the return. We try to work in the fact that our cattle in Japan are reasonably or competitively priced, and that we pay competitive rates to our suppliers at our end.”

Doubling export volumes

Since taking over in 2008, Matt and Alice have doubled the business into Japan. He puts it down to the value Japanese customers place on family-run Australian businesses and having the supply chain to meet demand.

“Large traditional stock and station agencies fell out of business in Japan over the years, for the same reason that we succeeded: they didn’t have a supply chain, they weren’t set up to run a supply chain. This happened from 2008 to 2014. They were buying their cattle week to week off different people, where we’d had supplies to us via relationships for 16 to 17 years straight.”

After competitors left the market until 2017, Edwards became the sole exporters of breeder cattle to Japan. Today another company in Australia exports a small percentage, however Matt says Edwards still has at least 80 per cent of the market.

Since the GFC in 2008, the number of cattle being sent from Australia to Japan has grown significantly, along with Japan’s economy. At the same time, supply from within Japan is reducing. Both of these factors have increased demand for cattle.

“With an ageing population in their farmers to breed the numbers of cattle they need, they’re depleting their own care herds,” Matt explains. “Currency is another driver of growth of course, as with any export business.”
To guarantee supply with increasing demand, Edwards is emphatic about the need to maintain long-term relationships with suppliers in Australia.

“Some 50 to 60 per cent of our suppliers that produce cattle for us every year are long term, and what I consider long term is seven or eight years plus, up to about 17, 18 years… it’s all grown by word of mouth, from performance and integrity within industry, without formal contracts.”

Guaranteed supply base

Edwards differentiates itself through broad and reliable service arrangements, offering a complete supply chain with direct access to Japan, exporting F1 Wagyu-Angus cross-steers, as well as offering Australian feed blocks and processing services to companies via joint arrangements. The company also offers valuable buy-back scenarios, Matt explains.

“We breed our own genetics, so we buy back our own genetics – we pull out and sell to producers, as in Wagyu bulls, then we give them long-term contracts to buy those cattle back. We’d probably been one of the first in the industry to do that for a long period of time. I identified that we needed to do that to maintain our core breeder base, which then offered our suppliers in Japan a guaranteed supply base.”

The business is also working to expand its Australian grain-fed program, finding and seeking markets that want a 400-day grain-fed product going forward. They’re also focussed on improving the stock quality through genetics.

“We’re getting more and more feedback on our suppliers and we have a DNA testing regime for our heifers in Australia, so we’ll know in the next 12 months exactly what bulls are high performing and what’s not. You can very quickly change your performance around with that information.”

Ban on live exports transforms the industry

In 2016, another exporter in Australia sent dairy heifers to Japan and didn’t follow the protocol. As a result, Edwards experienced a four-month ban, the longest ban of live exports in Australia.

It was a defining moment in the business that tested and demonstrated Edwards’ commitment to supporting relationships.

“We continued to work with our suppliers and take the cattle each month, at a very large cost to us and to our business, and got through it,” Matt says. “After the ban, we hired larger boats and sent double amounts, because Japan was just as affected as us… they rely on our supply for their supply chain. It was very tough for both countries and both operations at the time.”

Edwards is committed to ensuring the stock arrives in Japan in excellent condition, Matt says

“We send our own stockman on the boat, to oversee the cattle’s welfare. We supply our own feed on the boats and so we have control all the way over there. Then, with a program called the Exporter Supply Chain Assurance System (ESCAS) overseen by the Department of Agriculture and Water Resources, we’re actually responsible for the cattle after they arrive, feeding them for 500 days. We then report back to the Australian Government on those cattle, all the way through. Gone are the days where you put cattle on the boats, push it out and see you later. The industry just doesn’t work like that any more.”