IS IT time for Australian grainfed beef processors to start rewarding export shortfed cattle for marbling performance?

Generic 100-day programs are easily the largest grainfed category in the Australian beef industry, yet currently none of the nation’s large export processors include specific marbling performance in their direct consignment grid payment systems.

Conversations with several producers involved in large carcase competitions recently suggests they feel the time has arrived for higher marbling performers among 100-day cattle to be acknowledged.

“Doing so would in fact incentivise producers of feeder cattle entering shortfed programs to target marbling more through genetic selection,” one Queensland producer said.

The recent Brisbane Show Paddock to Palate competitions provided some insight into where marbling performance is going in 100-day cattle. This year’s HGP-free 100-day class carried a wide spectrum of breed types from Queensland and NSW beef herds, and an equally wide spread of MSA marbling performance, ranging from 0s to 4s.

There were 196 steers involved in last month’s competition (28 teams of seven) fed 105 days at JBS Beef City feedlot near Toowoomba:

• 14pc (27 head) produced a marbling score of 3
• 2pc (four head), produced a marbling score of 4, and
• Marbling score 2’s were reasonably abundant, representing 47 head, or 24pc of all entries.
• Two teams of seven steers produced an average marbling score of 2.86 each.

Add all the score 2’s and higher together, and it accounted for 78 head or 40pc of all the cattle involved in the competition. The percentage was lower (understandably) for Brisbane Show’s separate HGP-treated 100-day class involving 217 head this year, but still statistically significant.

Yet if these cattle had been direct-consigned into an everyday 100-day grid offered by any of Australia’s top four or five grainfed export beef processors, none would have been rewarded for superior marbling.

That’s despite many export processors having brand programs where the better marbling performers (typically scores 2 and higher) are segmented off and sold at a higher price. A large Brisbane show producer audience last month was told that that value could be worth at least $200 a head.

Industry improvement in marbling performance?

So has typical marbling seen in 100-day grainfed cattle improved over time, and if so, does it hasten the need for pricing recognition?

Genetic progress, although difficult to measure, would suggest it has, as does the fact that many Australian so-called ‘100-day’ grainfed programs are now in fact fed 120-130 days, to encourage greater marbling expression.

The Brisbane Show HGP-free 100-day carcase class results last month support the theory that there’s been gradual improvement. The marbling average for all cattle in the class this year was 1.46, compared with 0.82 back in 2021, and 1.11 in 2019 (no competition held in 2020 due to COVID).

Proxy payments through breed, MSA

So why aren’t processors prepared to differentiate better marbling performers in their over the hooks grids for 100-day cattle?

To be fair, several, but certainly not all, offer price incentives for 100-day cattle based on MSA eating quality index or boning group. In that case they would argue that marbling plays a big part in the index or boning group result for better performers, and is priced accordingly. In one NSW grid, MSA premiums of up to 20-30c/kg are offered for best boning group grainfed cattle of export weight.

Other processors argue that breed-specific grainfed programs where premiums apply (ie Angus) are clearly designed as a proxy for marbling. However a Brisbane Show producer audience in August was told by a large export processor that his company recently had ‘rows’ of Brahman cross 100-day ox in its chillers, showing marbling scores of 3.

Another Queensland processor told Beef Central his business had experimented with a 100-day marbling incentive pricing trial for a short period, but backed out, largely on the basis of having “too many beef categories to manage already.”

“The problem is, a lot of it is about logistics on the abattoir side. We run that many different programs and categories now – breed specific, HGP/no HGP, days on feed – it all adds cost, and makes it that much harder to fill specific orders and get loads away, in a timely fashion,” he said.

“In the end, the carcase purchase price is all averaged up and priced out based on what the processor can sell the product for. Its all about what the meat customer is prepared to pay for it.”

A large Queensland feedlot business livestock manager was less optimistic about any move to marbling premiums for 100-day cattle, saying a price reward on score 2 or better carcases would inevitably lead to processors paying lower prices on the rest of each mob, to compensate.

“Processors are more likely to start to discount the 0s and 1s, rather than reward the 2s – no question,” he said.

US chilled beef opportunity

One of the catalysts for recent industry interest in incentivising marbling performance in 100-day cattle has been recent export developments.  An export trade contact pointed to the emerging opportunity to sell larger volumes of chilled Australian grainfed beef into the US over the next year or two as important.

“The US domestic consumer, as well as US export customers in North Asia and elewhere, are accustomed to USDA Choice grade beef or better (roughly equivalent to Australian marbling score 2 or better), he said.

“I’m not saying that somewhere down the track the Australian industry does not adopt direct payment model for generic 100 day cattle that recognises marbling,” he said.

“It’s just that presently, the growing shortage of US beef is making this issue really shine out. Customers overseas are looking to replace US beef with something similar, marbling wise, out of Australia.”

“For anything shortfed producing marbling score 2 or 3, we’ll pack that into a separate carton – picking up extra margin,” a Brisbane Show producer audience was told by an export processor.

“A lot of that is driven by customer familiarity with US grainfed product, where customers are so used to seeing some marbling – and now want it in substitute supplies from Australia.”

Another export processor argued that the overall price paid for generic 100-day grainfed ox already factored-in a percentage of higher marbling performers.

“We often put together large consignments of grainfed meat where a certain percentage of higher marbling beef (say score 2s and better) is required in the consignment,” he said.

“If that was dropped out, and replaced with marbling score 0-1 beef, the next time we went into battle on price, they would discount us. It’s already part of the price equation,” he said.

“There’s obviously also some smaller customers who specify marbling score 2s or better, but a large chunk of that better product is rolled into large sales, that include a range of marbling scores.”