What carcase value discovery means to Teys

As Teys Australia this week commmences the commercial installation of a dual energy x-ray absorptiometry (DEXA) unit in its Rockhampton, Queensland, plant, the company’s corporate and industry affairs manager John Langbridge made that assertion.

A share of the rewards, and processing savings, that come from DEXA would also have to flow back to the farmgate, he said.

At the Australian Lot Feeders Association annual conference, SmartBeef 2017, in Armidale last week, Mr Langbridge presented a comprehensive overview of carcase value discovery and how Teys plans to move down the path of value based marketing, spearheaded by technology like DEXA.

This would be the way Australian beef stays ahead of what was becoming an increasingly competitive global market, he said.

DEXA provides an objective measure of carcase composition and lean meat yield (LMY) and amid Mr Langbridge’s explanation of why LMY is so important was a clear message not to take our eye off eating quality.

What creates carcase value is essentially the weight of saleable product, that is the yield, and the quality of the meat on that carcase, that is the sale value of the meat sold, he said.

Current grid systems average out a price that farmers are paid.

“Effectively we are not sending farmers accurate enough signals around the better animals,” he said.

The ultimate aim is more precise price signals to farmers based around carcase traits they can do something about, he said.

Put another way - more dollars for all along the supply chain via a transparent focus on market requirements.

“The aim is for the payment amount to relate to the true carcase value delivered,” Mr Langbridge said.

How that works: More accurate feedback to underpin decisions on farm; better decisions drive genetic and management improvement; more uniform carcases at the higher end of the LMY and quality spectrum and dollars captured as the variation within the herd is reduced.

“It’s a win-win for the producer and processor as a profitable supply chain is build but the whole thing is built on sending very transparent price signals back to the producer,” he said.

To fully explain the importance of LMY, Mr Langbridge presented a scenario of two sheep carcases with same weight but a 10mm fat content difference.

The saleable meat yield from the carcase at the higher fat content would be 48pc, from the second 56pc.

The value difference on the shelf is $144 compared to $172 - and that is at prices from several years ago.

The gap would be far greater now given 2017 rates, he said.

“What that shows is we really want to be feeding the ones that put on more meat than fat,” Mr Langbridge said.

The current industry practice of obtaining a LMY based on carcase weight and p8 fat measurements presented a range of error too variable to make management decisions on, he said.

DEXA cuts the margin of error right down.

Stage one of Teys’ DEXA project will produce quite accurate LMY figures.

“We will work with farmers on how to use those figures,” Mr Langbridge said.

“We expect the improvement will be gradual, as is the case with MSA (Meat Standards Australia).”

Stage two will be about driving efficiencies in the processing plant.

Stage three will be around knowing in real time how much meat should be coming off a carcase and being able to go in and make immediate changes during processing.

Teys’ DEXA unit, which has arrived from New Zealand via Melbourne company Scott Automation and Robotics, will soon be used on every carcase processed in Rockhampton.

Mr Langbridge said the plan was to run special boning trials where 200 carcases would be cut up and analysed to ensure DEXA was reading true.

Teys, with Meat and Livestock Australia, was also starting to look at live cattle scanning technology and would compare those results to bone outs and DEXA to see the correlations.

Further, there are other technologies that can be used to predict LMY rather than just measure it and they will also be investigated during the bone out trials, Mr Langbridge said.

However, as we become more sophisticated in measuring LMY it becomes more important than ever to monitor eating quality, he told the SmartBeef conference.

“It’s not a matter of sacrificing one for another,” he said.

“There are actually quite a few carcases that do both very well, we want to be producing caracases with high quality beef that grow out well.

“Tools can be used by producers to benchmark the impact that various genetic traits and management decisions have on eating quality over time.”

How is Teys tying the information together?

Cattle have been sorted into a value based marketing (VBM) group based on their performance for both LMY and MSA index.

The most profitable cattle do both well.

Cattle are assigned a group and graphed by the following categories: grainfed steer and heifer, grassfed steer and heifer and cow.

Where more than one of the above categories are presented for MSA grading within the same purchase, multiple graphs will be provided.

Groups are determined by a percentile band within each category which are currently based on the national averages.

Accurate feedback relays value and payment stimulates action, according to Mr Langbridge.

“High value animals costs the same to breed, feed and process,” he said.

“The future relies on all operating their supply chain sector in the most efficient manner, working together and sharing in the rewards.

“If we don’t share those rewards with farmers they are not going to do any of this.

“The only way we are going to remain globally competitive from here is not competing with each other but working together and sharing in the rewards.”