39The Economic Effects of Alternate Growth Path and Breed Type Combinations to Meet Beef Market Specifications across Southern Australia

Davies L, Quinn H, Della Bosca A, Alford A and Griffith G (2009) The Economic Effects of Alternate Growth Path and Breed Type Combinations to Meet Beef Market Specifications across Southern Australia, Economic Research Report No. 39, NSW Department of Primary Industries, Armidale, May.


Executive summary

The ‘Regional Combinations’ project was an integral component of the CRC for Cattle and Beef Quality (1999–00 to 2005–06). It was designed to build on the nutritional and genetic principles affecting the quality of beef production studied in previous research programs by focussing on regional beef production systems at four sites across southern Australia – southern New South Wales (NSW), western Victoria (VIC), south-east South Australia (SA) and south-west West Australia (WA). The overall design and methodology was described by McKiernan et al. (2005).

The combined effects of different growth paths, genetic potential and time of calving on performance and carcase traits were examined in detail for each site over a number of years to determine the best regional combinations to meet targeted market specifications. This provided the production information to evaluate the regional outcomes economically and to identify the most profitable and biologically efficient systems within representative environments across southern Australia.

Two different growth treatments were imposed following weaning (Fast ˜ 0.8 kg/day, Slow ˜0.6 kg/day, and for the WA site only, Compensatory ˜ weight loss and then reclaimed) to animals of diverse genetic potential for carcase traits (retail beef yield and intramuscular fat). The consequences on carcase and meat quality were then examined. Data were analysed to examine the effects of growth treatment post weaning and both sire carcase type (defined by either breed type or Estimated Breeding Values (EBV) for carcase traits) and sire carcase class (sire type grouped into high yield, high intramuscular fat or combined high yield and high intramuscular fat classes). The effects of calving seasons were also analysed for VIC and WA, and in SA for one season. The sites involved had different market targets and finishing regimes but a common underlying experimental design.

The implications of these experimental outcomes for a commercial producer were then calculated by incorporating the key results into regionally-representative cattle enterprise models using the Beef-N-Omics software package.

At the NSW site there was a large ($176/ha) difference in the gross margins for pre-feedlot production between the Fast and Slow treatments favouring the Fast grown animals, even after accounting for the higher cost of producing pasture capable of sustaining faster growth. Conversely, there was a considerable advantage to the Slow treatment animals for weight gain in the feedlot (Compensatory growth) compared to the Fast, which resulted in higher gross margins for Slow treatment animals ($29/steer). However, the difference in the feedlot phase was much smaller than the difference pre-feedlot hence insufficient to outweigh the economic advantage of the Fast growth treatment overall.

Results from the VIC site further demonstrated the importance of finishing cattle on a Fast growth path to enable quicker turnover, ensuring that periods of higher stocking rates while finishing cattle prior to slaughter are kept to a minimum. The highest gross margin per hectare was achieved using a Fast growth treatment, post weaning.

Economic analyses of post weaning production for the WA experiments were heavily influenced by finishing regime, since Fast growth treatments were feedlot finished compared to pasture fed for the other treatments. The Slow and Compensatory treatments in the winter calving management group were more profitable than the Fast growth treatment. The advantage to the grass fed alternatives was mainly due to the lower cost of feed. The reverse was true for the Autumn calving treatment where the Fast growth treatment was the most profitable option. In this case there was little difference in the cost of feed and the animals in the Fast growth treatment achieved greater income from sales.

The NSW data identified weight gain as the biggest driver of profitability of production prefeedlot, highlighting the differences due to carcase types and gain achieved within growth treatments. The Charolais carcase type, even within the slower growth treatment, outgrew all other breed types and was the most profitable. During feedlot finishing, the results were variable, with the Charolais types achieving the best gross margin following slower pre feedlot growth (due to high compensatory growth), but mid field following the Fast prefeedlot phase. The Red Wagyu type, the slowest growing, performed worst in terms of gross margin. High growth breed types have much to offer in terms of overall profitability because of their extra weight at sale, but need to be managed carefully to ensure acceptable compliance for other traits.

The VIC site analyses also showed the importance of producing cattle with heavier slaughter weights, highlighted when comparing the Wagyu ($376/ha) to the other breeds ($412/ha). The WA economic analyses confirmed these findings with the animals from high retail beef yield sires having an advantage in overall value through their greater carcase weight. As noted above, the major effect on profitability post weaning at the WA site was the cost of the feedlot finishing for the Fast growth treatment compared to pasture finish and time of calving. In the SA data, there was very little difference across the Angus sire classes.

Changing calving time from autumn to winter in WA decreased profitability to weaning when the stocking rate was unchanged, but increased the gross margin when the stocking rate was increased by 10%. Reproductive rates were not affected. This clear economic advantage in production to weaning for the winter calving system was due to better alignment of animal requirements to feed availability, which had a major effect on the cost of production through reduced supplementary feed costs. In VIC there was little difference overall, with Autumn calving the best for the Fast growth treatment and Spring calving best for the Slow. In SA, the Autumn calving outperformed the Spring calving by around $55/ha.

Results from this experiment are not prescriptive but can give guidance on the expected biophysical outcomes and on the expected economic impacts. However, regional cattle producers need to have a good understanding of their whole farm system when considering the appropriate combinations of breed type and growth path that is best for them. For example, while there may be large differences in mean gross margins between the Fast and Slow treatment groups, there may be significant differences in individual farm businesses in relation to input requirements and availability, and pasture types and growth rates through the year and consequent implications for stocking rates at different growth rates. Sale weights and prices received for both weaners and finished cattle will also vary through the year as will supplementary feed requirements, availability and price. A specialised software package like Beef-N-Omics makes consideration of all these various factors formal and explicit.