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Non-compliance with Market Specifications in a Victorian Pasture-fed Beef Value Chain1

Maria Crawford, Greg Ferrier and Garry Griffith

Australasian Agribusiness Review, 2017, vol. 25

Abstract: Pasture-fed beef is being increasingly demanded by global beef consumers. However, pasture-fed beef value chains are struggling to maintain continuity of supply and consistent quality of product year round. Pasture-based production systems are influenced extensively by environmental conditions, pasture species, grazing management and livestock management systems. This variability, compounded by variability in market outcomes, could have a significant impact on the long term viability and profitability of producers in the value chain. This study aimed to assess the level of non-compliance in one southern pasture-fed value chain, with the intention of using the results to focus further work on areas of production and supply most critical to sustaining the market. Nineteen months of carcass grading data over 2012 and 2013 from almost 63,000 cattle were evaluated to determine the levels of non-compliance with the relevant company specifications. Hot standard carcass weight, P8 fat depth and sex were the carcass attributes that were compared and analysed. The 2012 data set comprised 3,905 heifers and 9,922 steers. Some 66% of the heifers and 62% of the steers did not meet the preferred company specifications for carcass weight and fat depth. For heifers, the cost of non-compliance was estimated to be $63 per carcass and for steers it was $47 per carcass. The 2013 data set comprised 19,099 heifers and 30,014 steers. A total of 78% of the heifers did not meet the highest value specification on the grid, with more than 50% of heifer carcasses being too light. Just on 60% of steer carcasses did not meet the 2013 weight and fat specifications with 39% of all the steers being overweight. The foregone value in non-compliance for heifers was estimated to be $84 per carcass and, for steers, $87 per carcass. Across the whole dataset, the weighted average cost of non-compliance was $78 per carcass.

Keywords: Livestock Production/Industries; Marketing (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ags:auagre:285014

DOI: 10.22004/ag.econ.285014

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