At the Angus National Conference in Albury NSW last Thursday and Friday, Mr Langbridge said beef’s commodity cycle was a big concern to processors and it was bad for the industry’s long-term sustainability.
“We think there are things we can do to take out peaks and troughs,” he said.
He said these included actions to shore up consistent, high quality supply, such as a value-based payment system that would strengthen the relation between consumer preferences and spending habits and the feedback provided to farmers.
“Over time we want to move to a value based payment to our farmers,” Mr Langbridge said.
This would include streamlining kill sheet feedback to farmers, which would capture for each animal the quality of loin cuts plus the lean meat yield of that individual carcase, plus premiums, including for European Union eligible, Pasture-fed Cattle Assurance System (PCAS) and Angus.
Such as system would let farmers know which animals performed better and which they could use to inform breeding and management decisions.
“Eventually we want to grade every carcase.”
He said in the next six to 12 months, Teys would work with farmer focus groups to refine this idea and work out what feedback is useful.
He said the developing system would be based on objective measurements strengthened by the use of technology including cameras and xrays, and possibly robotics in the future.
He said such a system would help improve the consistency and quality of Australian beef supply, which would allow Teys and other processors charge a premium to overseas customers who take 70 per cent of beef processed in Australia.
Mr Langbridge said that was vital because Australia could not compete on price against other supplying countries, for example our labour costs are much higher.
He said research showed consumers were willing to pay a premium for consistent eating quality, and Meat Standards Australia (MSA) had provided a “fairly good basis to start down that road”.
For example, Teys could not meet the increased demand for grass-fed hormone-free beef to send to North America.
He said Senate, Australian Competition and Consumer Commission and other high level inquiries and government papers into the red meat sector would require the industry come to a uniform point of view about how we measure meat quality.
Mr Langbridge said having a foundation of stronger supply chain relationships and trust would have benefits for the whole industry.