Successful Victorian Wagyu producer David Blackmore has something of a reputation as a free-thinker. In 1979 he ran some of the first commercial embryo transfer programs in Australian cattle, for example.

But his latest beef production project is so left-field that it has left some industry stakeholders struggling to understand where he is heading.

After a decade of being a permanent custom feeding client at the ICM Peechelba feedlot in Victoria, Mr Blackmore has over the past 12 months abandoned conventional lotfeeding systems for his multi-award winning high-value fullblood Wagyu beef program.

In its place is a novel production system he has developed, largely on instinct, which he loosely terms ‘Farm-fed.’

So what’s motivated him to tamper with a beef production system which has seen Blackmore Fullblood Wagyu beef elevated into one of Australia’s best known and most highly-decorated niche beef brands?

While he recognised that input costs for feedlot programs had risen in recent years, he said the shift to the ‘farm-fed’ system had nothing to do with production cost savings. In fact he expects the process to be pretty much cost-neutral.  

“It’s all about the consumer,” Mr Blackmore said.

Marbling-abundant Blackmore Wagyu beef regularly appears in some of the world’s best known restaurants, including Per Se, Thomas Keller’s word famous New York dining house, and Heston Blumenthal’s Fat Duck. It currently features on the menu in the Nobu restaurant in Melbourne’s Crown Casino at $52/50 grams – the equivalent of $1042/kg.

Mr Blackmore goes to great lengths to point out that he is not trying to upset the mainstream feedlot industry, stressing that his particular application is built around high-value Wagyu cattle, and was unlikely to make any financial sense ‘feeding yearlings for Coles or Woolies.’

“We’re not knocking the conventional grainfeeding business at all – this is just where we want to go with our specialised business,” he said

“We’re doing it because we think we can get a better outcome doing what we are doing. Our cattle are on feed for 650 days, which is a very long time. But more importantly, our customers expect us to move with the times, and be responsive to high-end consumers in areas like environmental management and animal welfare.”

“We think this production system is setting us apart, in a marketing sense, and responds to where we think our core consumers’ expectations are heading,” he said.

“We’ve had probably 100 international food service visitors through our business in the past 12 months, and countless chefs and people involved in the trade in Australia. Neil Perry, Shannon Bennett and Matt Moran, and their key staff have either been or are coming to the farm to have a look at what we are doing. They are vitally interested in this process. A lot of stakeholders are really keen to see how this project goes.”

Mr Blackmore said he had not yet started embedding messages about the change in production systems in the broader marketing effort behind Blackmore Wagyu beef, but it would start early next year.

$2 million investment

He conceded that the $2 million investment made so far in transforming his Alexandra district property northeast of Melbourne into the ‘farm-feeding’ operation was a somewhat risky step, given that the process is largely unproven.

So where has the money been spent?

Small mobs of 25-30 Wagyu cattle (numbers vary depending on age and time-on-feed) are held in a series of 40 five acre (2.3ha) grassed paddocks, set up in a cell-like configuration. Each has access to water and feed-bunks, just as they would in a more intensive feedlot setting.

The big difference is in stocking rate, with pen densities of around 330sq m/beast. The intention is that the paddocks will remain fully-grassed while under production.

Laneways provide access for feed delivery, and the project has also required the installation of a feed milling system, mixing trailer and commodities shed, just as in a conventional feedlot. The ‘feeding farm’ area totals 100ha, with a further 80ha under permanent irrigation off the Goulburn River.

The ration being fed is basically unchanged from that fed to the Blackmore cattle in the ICM Peechelba feedlot for the previous decade. Former Peechelba manager Gina Lincoln now heads up the feeding and livestock operations on the project.

While the 1200 Fullblood cattle in the program have unfettered access to their surrounding grass paddock, the pasture is not designed to represent a significant part of their diet.

Trials staged before the full project was launched showed that cattle ate very little from the paddock itself, continuing to rely mostly on the roughage-based Japanese style ration.

The paddock itself provides little more than space to roam and camp, and would be promoted in marketing messages as cattle ‘laying on grass, under gum trees.’

More than 6000 native trees have been planted on the site, to provide paddock shade. Shade shelters are being erected to fill-in until the natives grow to a useful height.

Mr Blackmore said the only similar livestock project he had identified around the world was a dairy farm in Holland, which still used shedding at certain times of year – but the Alexandra project had instead been designed primarily with the ideals of providing an animal-friendly environment.

High expectations over marbling

Given that the entire Blackmore Wagyu business model is built around achieving the highest possible marbling scores, for which customers around the world are prepared to reward handsomely, much interest will now focus on carcase performance, and how it compares with the previous conventional feedlot model.

A marbling score or two difference in Fullblood Wagyu cattle can easily represent $2/kg difference in price at carcase level, amounting to close to $1000/head.

The first turnoff from the new production system will take place in February, but Mr Blackmore has high expectations. He thinks there will be no compromise in historic marbling performance – and if anything, it may improve.

“On the same ration, the cattle are doing better daily gains and consumption rates than we have seen previously – about 5pc in front on gain,” he said.

Animal health performance had also improved, he suggested.

“We put the gain performance and herd health down to the change in the environment, and lower pen density” Mr Blackmore said.

While still open to conjecture, there is an expectation that longfed fullblood Wagyu will be able to be turned off 100-120 days earlier on age, due partly to the feeding performance, and partly to a modified pre-feedlot entry process.

Calves are now weaned at six months, going straight onto irrigated pasture and a weaner ration fed from a trough. They spend 100 days there, before another 100 days in a backgrounding stage, still on a non-grain based ration.

At 12 months of age, the cattle go onto a grower ration, exactly the same as used previously in the feedlot environment, before progressing to a finisher ration when they reach around 550kg liveweight.

While the total feeding period will still be 650 days in order to maintain marbling and meat quality levels previously achieved, that period is now broken-up differently, and cattle are started earlier. Previously cattle did not enter the feedlot until 15-16 months of age.  

“We do not anticipate any significant cost saving in total feeding cost, using the feeding farm. That was never a motivating factor in this project,” Mr Blackmore said. “It’s all to do with environment and animal welfare, and our ability to highlight that in our marketing strategies.”

There were currently cattle in the program that were already 900kg liveweight, that would not be ready to go for another 100 days, he said.

“Looking at the younger cattle, we certainly have more leg under them. Our business now competes directly with Japanese-produced Wagyu in six or seven countries. Our beef is dearer, for the same product, because theirs’ is so heavily subsidised.”

“But despite that, we haven’t lost any market share, because customers like our beef, and appreciate the quality and other attributes.

Blackmores has already started talking with customers overseas about its new project and the animal welfare and environmental implications, and sees that as a marketing edge against Japanese-produced Wagyu beef, which is produced under quite intensive shedded conditions.              

The Environmental Protection Agency recently paid the site a visit and carried out a 33 point check, Mr Blackmore said.

“The inspectors said there was nothing they could see that needed to be improved or changed, and confirmed that with pen densities as low as they are, the project does not qualify as a feedlot.”

Mr Blackmore expects his ‘feeding farm’ investment will pay for itself in about four or five years.

“While our feed cost will not vary from what we paid previously, we obviously will now avoid the administration/yardage/management cost associated with using a custom feedlot,” he said.

Turnoff from the Alexandra facility will build up to 80 carcases/month next year, from which about 60pc of material is exported and 40pc domestic. The target is average carcase weights of 550kg, and already individual carcases have weighed more than 600kg.

• Blackmore Wagyu was named Livestock Producer of the Year at the 2012 Australian Farmer of the Year Awards in Melbourne recently. The awards were hosted by Kondinin Group, ABC Rural and the Australian Rural Leadership Foundation. Click here to view report.