A move towards value-based marketing is seeing a NSW processor reap the profits 10 months on from the introduction of a world-first lamb grid that pays producers on lean meat yield, weight and intramuscular fat.
Gundagai Meat Processors introduced the grid last May, offering a 50 cents-a-kilogram premium for lambs with an intramuscular fat measurement of 5 per cent or higher.
Gundagai Meat Processors CEO Will Barton said since then there had been a lot of interest from producers, with the abattoir always booked out in advance.
"We've got more producers and lambs than we can process at the moment," he said.
"Essentially we're working really hard at the moment to lift our production capacity to match the demand for both the end product and for the producers that are trying to supply into it.
"The IMF bonus that we're paying producers is really the market signal that we're trying to send to producers to know that there's value for us in high quality product.
"On the meat sales side though there's still a lot of work to be done to make sure we're getting the value, that's still really in its infancy but it's growing quickly."
The Gundagai Lamb brand established two years ago to take the product out to market is gaining traction, with a growing number of restaurant partnerships in Melbourne.
Restaurant partnerships are still under development for Sydney and Brisbane.
Mr Barton said in the immediate term the focus was on getting the product out to more markets and then scaling up.
"Unlike a lot of other lamb brands that are based on the location they come from or their breed, this is a lamb brand that's based on the ability to objectively measure in a plant what's better and provide that with an eating quality guarantee to a consumer," he said.
"Everything we have done has added to the profitability of the business without question."
In September the partnership between Gundagai Meat Processors and agtech startup MEQ Probe went to the next level with the introduction of producer portal delivering carcase data back to the producers.
The second iteration of the producer portal is due to be released shortly.
Mr Barton said they found producers were really interested in the feedback being provided and how they could use it in decision making to enhance their end product.
"That improvement journey is a slow burn because any time you chase a certain trait, it's always going to be at the expense of another trait so you have to keep that in balance," he said.
"It's a long term journey to move your flock incrementally to the right place but because there's a value upside to making those changes and following that incremental improvement, we're finding producers are attracted to the concept of having a sustainable profit-driver as part of the feedback loop."
Future plans for the Gundagai Lamb brand include developing a lifetime stress measure and implementing ways of objectively measuring sustainability.
"We're working on a couple of measurements... things that we can measure objectively at our plant that translate into proof that a supply chain is doing the right thing, by the environment and by the animal," Mr Barton.
Mr Barton said that critical labour shortages meant that the plant was currently operating at about 75 to 80 per cent of its capacity to process a million lambs a year.
"We would be processing somewhere in the order of 1000 more lambs every day if we had the workforce to do it, so a big focus for the business at the moment is to try to solve that challenge so that we can continue to service as many producers as we can," he said.
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