(suspenseful music) - [Narrator] This is a premium
Wagyu steak from Japan, and costs around $100 at
supermarkets in the US. And this is also Wagyu, but it costs $40. (upbeat music) That's because it comes from here, the vast country of Australia, where ranchers are racing
ahead to win the global market for Wagyu by experimenting
with different methods to raise the cattle. - We're running about 2000 Wagyu cattle, the Wagyus have been the linchpin for our growth as a business. - [Narrator] All this doesn't sit well with Japanese farmers. (speaks in foreign language) Japan and Australia are
the biggest Wagyu producers in the world. And they're vying for
the largest export market that is in US. By 2023, the global Wagyu
industry will generate sales of around $9.5 billion, according to the marker
research from Technavio. So Australian and Japanese farmers are in an intense competition with one country betting on tradition. (speaks in foreign language) While the other is
betting on new technology to increase productivity. - We are mapping the entire genome, I'll know whether to breed on from it, or it's gonna end up on a dinner plate. So this is really powerful technology and we're using it to full effect. - [Narrator] Wagyu is a breed
of cattle native to Japan, and literally translates
into Japanese beef. What makes it so special is
the high concentration of fat that's inside the muscles. The industry calls it marbling. And that's what farmer
Kazuki Morimoto does best. (speaks in foreign language) He says the trick to his success has been following strict traditions. (speaks in foreign language) Wagyu farms are usually
small, but Morimoto's 300 cows have brought in $1.4 million
annually in the past few years. A small herd allows them
to pay very close attention to the feed, which accounts
for almost 70% of his costs. (speaks in foreign language) Morimoto usually fattens
cows for a minimum of two-and-a-half years, compared to the average
one-and-a-half years it takes for other types of cattle like Angus. He says his Wagyu is meant to be consumed in small quantities, similar
to other high-end delicacies like caviar and Foie gras. (speaks in foreign language) (birds chirping) Many Australian ranchers
see the Japanese way of raising Wagyu as out-of-date. - As the Japanese, they're
feeding the animals basically from birth. They just feed feed feed. And we're not doing that. - [Narrator] Steve Binnie is part of a new generation of Wagyu ranchers, who want to produce beef in
what he says is the modern way. He had his first Wagyu
steak five years ago. - Some people say, "Where were you when, "you know September 11 happened? "Where were you when Kennedy got shot?" And so I look at this moment in my life was when I had that first
Wagyu, and it was so incredible. - [Narrator] The next day, Binnie pivoted his nearly 100-year-old family business from Hereford cattle to Wagyu. - So this is an eight to nine strip line. Beautiful, this is what
we'll be having for lunch. The Australian product does cost less because we're more efficient. We're doing it on large-scale
with low cost of production. - [Narrator] Australian ranchers
have perfected a technology that Japanese farmers like Morimoto won't ever consider using. Agricultural genomics, it's
the analysis and selection of the best DNA in Wagyu cattle. Then he has been artificially
inseminating his cows since he started raising Wagyu. For this cow, he's
carefully selected sperm so that the resulting calf will thrive in the hot Australian climate, need less water and food
compared to a cow in Japan, but still grow up to become
Wagyu that's rich in fat. - It's a very data-driven process. All of the carcasses that are
coming through the abattoir, they are evaluated for
a matter of marbling, weight, age, days on
feed, all of this data is going into this monstrous database and all of these carcasses
are being linked back to the genetics. - [Narrator] Using this,
Australian ranchers also create cross-breeds
with other cows like Angus, these steaks usually have less marbling because they're genetically 50% Wagyu. So about half the price of
full-blood Wagyu steaks. (steak sizzling) Many of these cross-bred Wagyu steaks, end up on plates in the US, where local Wagyu production
makes up a tiny portion of the larger cattle industry. By 2021, Binnie expects to
increase the sales to the US by up to 50%. - So good. - [Narrator] Wagyu embryos
first arrived in Australia in the early 1990s. But the combination of genomics and Australia's ability to
scale cheaper Wagyu production has led to a boom in demand, helping the Australian industry grow by 20% every year since 2015. Last year, the country sold 40,000 tons of Wagyu beef abroad, making it the largest
exporter of the steaks on the planet by volume, well ahead of Japan's
export of just 4300 times. (speaks in foreign language)
(sound indicator beeping) Farmers like Morimoto have been feeling the market gets sucked away from them by Australian ranchers. So the Japanese government has stepped in to protect and promote its Wagyu industry. (speaks in foreign language)
(sound indicator beeping) Auction houses like this
one are the only places where Japanese farmers
can sell their Wagyu beef. For years, these places were
not allowed to sell to the US, a coveted market for Wagyu farmers. The last year Japan signed
a key trade deal with the US to export unlimited Wagyu, a key part of the Japanese
government's grand strategy to double beef exports. (upbeat music) The government also recently passed a bill that criminalizes the export
of Wagyu's semen and embryos. (cameras clicking) But experts say these reforms
don't really get up the heart of the issue with Japan's industry. - It's a core deal,
what Wagyu original beef is a very excellent but
price is too expensive. - [Narrator] Takafumi
Gotoh is an agronomist who studies the Wagyu beef industry. He says that in order for
Japanese farmers to catch up, they need to start copying what Australian ranchers are doing; produce Wagyu beef that's less rich in fat and therefore cheaper. - Australian farmers
consider as a business. But the Japanese farmers,
the most important thing is to produce a good marbling beef. Japanese farmer should do a business, consider the cost of
performance, how much feed? How much profit? - [Narrator] But that won't
be something Japanese ranchers will accept easily. (speaks in foreign language) - This is an A4 Miyazaki
ribeye from Japan. And here we have a
beautiful Australian ribeye.
