News

$1b benefit identified as Beef CRC celebrates achievements

Jon Condon, 13/06/2012

 

With the formal closure of the Beef CRC now only three weeks away, the industry is pausing to reflect on the output of the groundbreaking collaborative R&D organisation that has driven a vast catalogue of industry advances over its 20-year history.

A broad collection of industry stakeholders is gathered in Brisbane this week for the final Beef CRC forum, and potentially, to put some platforms in place to effectively drive beef research into the future.

Beginning yesterday, and continuing today and tomorrow, the industry forum at University of Queensland is touching on many of the current, third phase of the CRC’s achievements, and how they are being utilised within industry.

A team of ag economists led by Garry Griffith has conducted an economic analysis on the impact of the CRC’s third term, ending on June 30.  

This work is based on a series of scenarios based on different rates of adoption of genetic and non-genetic technologies, in both northern and southern Australian production systems.

The study found that the benefit:cost ratio for every dollar invested in the Beef CRC’s third term ranged from 7:1 in the worst case scenario to a ‘best case’ of 11.2:1.

The most like assessment is a result of around $9 in industry benefit every $1 invested, Mr Griffith said.

While these figures are lower than estimates made back in 2004 before CRC III started, it is largely because the genomic prediction equations took longer to deliver than anticipated. Those additional benefits are still likely to occur, only a little later than anticipated.

The non-genetic supply component of CRC III’s output contributed 40 percent of the calculated industry benefit, across all scenarios, while improved market access provides about 30pc, and genetic improvement, 30pc.

Both beef producers and other in the post-farmgate supply chain were beneficiaries, according to the economic study, with producers taking about 70pc of the aggregate benefit, and others, 30pc.

The ag economists involved in the study estimate that under the most likely scenario, the Beef CRC’s third phase delivers an expected benefit of just over $1 billion – almost twice that of a ‘without CRC’ scenario run in parallel.

 

Producer's view:

David WoolrychOne of the industry stakeholders participating in the final CRC forum yesterday was southern Queensland beef producer, David Woolrych.

Now a spritely 72-year-old, Mr Woolrych is best known as the dynamic former chief executive of the producer cooperatively-owned South Burnett meatworks near Murgon in southern Queensland.

During an era when beef processors in Australia notoriously rarely shared information with the broader industry, Mr Woolrych provided a priceless snapshot into market and production cost dynamics within the processing sector, and it was with a sense of some irritation among his cohorts that he liberally shared such information with his co-operative shareholders and producers in general.

He also spent a lengthy term as a director of the Beef CRC during its first term, and also as a director of its ‘predecessor’ the Meat Research Corporation.       

Today he runs about 1500 EU-accredited cattle in his own high-input, high-output cattle operation near Murgon.

“The focus during the CRC 1 era was heavily on the improvement of meat quality and consistency, how feedlots could deliver that, and related issues. I look back with a lot of pride at the progress made in those days,” he said.

Mr Woolrych acknowledged that the CRC’s focus had changed dramatically since those earlier times.

“Today’s challenges, like genomics, are very complex, and represent a different era in CRC’s evolution,” he said. “But the modern CRC’s focus on genetics is far from finished, and it is going to take a considerable industry effort to now deliver it to its potential.”

Asked whether the industry had the capacity and the motivation to maintain an adequate R&D emphasis on unfinished genomics and other work, in the absence from July 1 of a CRC, Mr Woolrych said something had to come out of the ashes, but he would be surprised if it could be delivered with great effect.

“When you look at the CRCV in its entirety, it had so many components. There were so many cross-overs in terms of the aspects of science that delivered outcomes that only the CRC could deliver upon. It wasn’t just one finite component or another, operating in isolation.”

“I can’t really see how that can be maintained in its absence. It will be interesting to see what the likes of CSIRO does, but I don’t know who in future will be able to sit down and identify a pathway for the combined research groups to follow.”

But tragically, there were plenty of cases of such bodies being dismantled, despite their value, and not only within the beef industry.

Mr Woolrych said there was now a risk of the R&D sector simply going for ‘best bet’ research options, rather than being prepared to tackle blue-sky research, where the really big advances could be made.

As an MRC director during the Fututech era, he said that massive project, designed to automate much of the processing kill floor function, was a ‘very futuristic concept,’ that nevertheless warranted making an attempt at.

“I would argue that Fututech would probably be even more relevant today, given the chronic labour issues the industry is facing. There has also been enormous technology development in the computer field in the period since Fututech was attempted in the mid-1990s. Lack of computer processing power was one of the reasons it failed,” he said.

“But every now and again, the industry needs to go out on a limb and commit to something like Fututech, because the potential payback could be enormous.”

While there is a lot of automated/robotic processes now being applied within the beef processing industry, what set Fututech apart was that it linked a chain of automated processes in an unbroken sequence from the knock-box to the chiller door, virtually untouched by human hands.

 ‘In my view, it ultimately failed because of the sheer complexity of what was being attempted, and that the project progressively started to bite-off more than it could chew. But the industry could do worse than going back and having a look at Fututech, as an R&D management case study, for future reference,” Mr Woolrych said.

One of the real challenges facing current-day CRC work was in making complex topics in areas like genomic understood and valued by the average producer, he said.

“There’s a lot of complexity, especially for blokes of my age.”

“I don’t want to know absolutely everything about DNA sequencing, but if it’s relevant to my cattle operation, I do want a simplified explanation so I can improve the performance of the animals I’m producing. But it’s a little like herding cats: everybody in the industry is at a different level, and that represents a challenge in the extension process for programs like CRC.”   

Budget allocations for R&D work also needed to be protected, Mr Woolrych said.

“MRC had a budget back then of about $50 million. We need to be careful that budgets and financial support, whether it be from industry or other sources, are not eroded to the point where they become ineffective.”   

  • More from the final CRC forum in coming days.

 

 

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