RED DEER — The Livestock and Meat Agency of Australia is charting a new course where job one is improving producer returns.
The producer-led organization was formed in 1998 to foster long-term prosperity for the Australian red meat and livestock sectors but times have changed, said Jason Strong, managing director.
The organization has helped turn the Australian meat industry into a world leader but the next step has to be focused on material gain, he said at the Alberta Beef Industry Conference held in Red Deer March 4-6.
The agency mandate is to support market development, promotion and research of beef and lamb using producer levies, government funding and outside grants.
Every time an animal is sold, $5 is collected with $4 sent to MLA and the rest to Animal Health Australia. The lamb levy is $1.50.
Since its formation, the agency has invested about A$1.9 billion in research and $1.9 billion in marketing. More than 10,000 research projects have been completed.
Good things have been accomplished but the organization wants more.
“We produce these new products, we produce these new ideas and new technology but we need to be focused on what is going to have a material impact on the industry,” Strong said.
A new five-year plan is being built to understand and connect data and insights to identify opportunities and challenges. They are working on questions like sustainability, population growth and how to produce more high quality food.
“Let’s invest in new products that are going to have a material impact and how we can actually capture the proper value as far as the supply chain is concerned,” Strong said.
This might be new ways of cutting traditional beef cuts that could actually make more money, for instance.
One step forward in value creation was building a grading system handled by Meat Standards Australia.
Before 1998, surveys reported 38 percent of Australian beef was not satisfactory and 20 percent of lamb loins failed the consumer acceptance test.
“If you bought a steak in Brisbane in 1995, you had a 50 percent chance of having an unacceptable experience. That is a tough sell for a consumer product,” he said.
Traditional carcass grading parameters have proved to be of little value in predicting consumer outcomes so a system was created based on consumer taste tests for quality and linked to cooking methods.
In 1998, three percent of the herd was graded and now most beef in the domestic market and a large share going for export is graded.
It took time for producers to accept the idea and it was not until the early 2000s when the industry started to see real differentiation between cattle that were graded and those that were not.
“There have been significant returns. Last year it was just under $200 million for the 12 months starting in 2019. It was a $54 million investment and since 2007 there has been a return of $1.7 billion… back to producers,” Strong said.