Facebook Twitter

JBS launches price premium for ‘high performers’ among grassfed cattle

by Jon Condon, 19 November 2018
8

IN A significant milestone for branded beef supply chains, JBS Australia has this morning announced a new pricing incentive for high-performance cattle entering the company’s Great Southern farm-assured grassfed beef brand program.

Little Joe marbling score 4 and up cube roll. Click on image for a larger view

On top of a Great Southern brand program premium that is already worth around 50c/kg over everyday grassfed MSA, the company from this week is offering a sizeable 20c/kg premium for elite carcases reaching AusMeat marbling scores of 4 or better, while delivering MSA index scores of 64+.

Such carcases are eligible for JBS’s ‘Little Joe’ program, a super-premium sub-brand that sits within the company’s broader Great Southern farm-assured grassfed brand. Click here to see an earlier story about the launch of the Little Joe brand.

The new premium adds an additional $66 a head on a typical 330kg carcase meting the MSA and company specs for 0-4 tooth cattle. About 3pc of carcases slaughtered for Great Southern at JBS Brooklyn in Victoria produce a marbling score of 4 or higher. Some individual consignments can contain as high as 20-40pc score 4 carcases.

In an email to its suppliers this morning, JBS said the premium was designed to encourage producers engaged with the Great Southern farm assured program to focus on higher marbling genetics.

JBS processes 3000 to 4000 grassfed steers and heifers each week for Great Southern, through the company’s Brooklyn (VIC), Scone (NSW) and Longford (TAS) plants.

A reasonably common trend among MSA-backed brand programs in recent years has been brand ‘segmentation’, where higher quality carcases are harvested from the general population of bodies qualifying for a brand under MSA and company specs, and sold at a premium under a separate identity.

Such moves by brand managers, including JBS, has prompted questions from beef producers at several recent industry gatherings about the prospect of sharing in the rewards further along the supply chain.

JBS has done exactly that in its initiative announced this morning.

The company’s farm assurance and supply chain manager Mark Inglis said the company had carried out a lot of analysis in the lead-up to the launch of the Little Joe program early this year, and today’s  new premium offering.

Over time, JBS would examine whether it could add a premium also for carcases eligible for its mid-range Pinnacle program (marbling scores 2 and 3, average MSA index around 63) within Great Southern.

While it’s still early days, one recent assessment ‘on the back of an envelope’ by a genetics consultant had suggested the new marbling/index premium could elevate the value of elite herd bulls capable of delivering progeny able to hit higher marbling scores off grass from $8000 a head to perhaps $15,000-$16,000, across his lifetime, Mr Inglis said.

JBS Southern’s livestock manager Steve Chapman said the response from suppliers to this morning’s announcement had been “extremely positive.”

“Over time’ we’d hope the price signal will help deliver more carcases hitting marbling score 4s or higher. It’s really the next phase of development for the Great Southern premium beef program, which is now five or six years old,” he said.

JBS had also recently adjusted its Great Southern grid, removing an earlier 10c/kg deduction on heavier cattle 360-420kg carcase weight.

“Add that to the new 20c/kg Little Joe premium, and it can add up to $100 a head pretty quickly on the better performing cattle,” Mr Chapman said.

Victorian western districts cattleman and Great Southern program supplier David Allen, from Boorook, near Mortlake said JBS’s premium offer was a great step in the right direction in encouraging producers to sharpen their focus in producing higher-performance carcases.

“Both genetics and management contribute to higher carcase and marbling merit, but genetics is a big part of the game. It was quite clear to us last year when we came third in the Great Southern supplier of the year awards that marbling is a big contributor to achieving those very high MSA index figures,” Mr Allen said.

‘Generally, there’s still a lot of potential left in lifting marbling performance in grassfed cattle. That doesn’t mean that current eating quality in brand programs like Great Southern is not good, but it’s a premium for a reason, and the Little Joe product is obviously highly sought-after in the market – and that’s mainly about the marbling.”

“The benefits are all around – the producer is winning, the consumer is winning, and everybody is happy,” Mr Allen said.

 



Reader's Comments


Comment
  • Justin MacDonnell November 19, 2018

    This is bloody brilliant. It has taken some time but finally processors and supermarkets are seeing the quality and potential in Grass Fed Beef. Only trouble is the good folk at JBS need to realise that Quality Grass Fed Beef isn’t unique to Southern Australia. It took a while to break the Grain Fed = Quality Beef Paradigm, I just hope it doesn’t take as long to break this one!

  • Julian Carroll November 19, 2018

    This is huge! A crystal clear price signal directly attributable to IMF. I would say this is the most significant move towards transparent value based marketing (VBM) that we’ve been calling for, for many years. Well done JBS.

  • Pam McGregor, Kojonup WA November 19, 2018

    There’s also a former feedlot (grain) near Manypeaks in the Great Southern of WA producing grass fed beef for Coles.

  • David Murray November 20, 2018

    At long last there could be serious price differences between Angus that perform and Angus that don’t perform. How do you identify Angus that perform compared to Angus that do not perform. CHECK WHERE THEY RANK ON THE EBVS AND INDICES.

    So the game is on?

    Thank you JBS.

  • Ian McCamley November 20, 2018

    Would beef from a MSA index 64, MB score 4 carcase eat better than the same cut of beef from a MSA index 65, MB score 3 carcase?

    Let’s ask that question during MLA’s series of meetings and AGM in Canberra in coming days, Ian. Editor

  • Pam McGregor, Kojonup WA November 20, 2018

    Can’t make it toCanberra but would be very interested in the answer! Can you post it on this article please?

  • Alisdair Robertson November 20, 2018

    Are the grass fed cattle going into this program,
    Actually standing grass and legume, non sedentary finished cattle or are they sedentary, cooked silage finished cattle , just wondering as NSW and Victoria are in the middle of some very bad seasons but THIS grass fed brand is going ahead in leaps and bounds,?
    Fair Question Editor

  • Paul Franks November 20, 2018

    What I have always wondered about is why marbling which is just fat in the meat is so sought after, given the improved health benefits of lean meat, it seems promoting fatty beef is counter intuitive to the modern urban health conscious consumer.

    I know fat through the meat improves flavour and tenderness as the human body has evolved to enjoy the flavour of fat (an evolution from the early hunter gatherer days), but we mostly do not have to run around spearing our dinner these days, and most people have far more sedentary lifestyles. Is this seemingly infatuation with marbling healthy for the industry?

  • Leave a comment

    (First Name and Surname Required) - read our Comment Policy

    (Required)

    (Required)