The New Zealand pastoral farming industries have a great opportunity is to shift the dysfunctional bobby calf output to functional beef-on-dairy production, 2023 Nuffield scholar Matt Iremonger believes.
It needs greater value in the supply chain for mating, rearing, growing, processing, marketing and delivering a beef product to the end consumer from the NZ dairy industry.
“Unless there is more money for the end product of non-replacement calves, the value chain will continue to focus on cost minimisation of the calf as a by-product of milk production,” he said.
To change the value chain requires knowledge of the customer needs, including perhaps grain-fed finishing, improved integration and communication of farming systems and greater efficiency and cost optimisation.
Iremonger called for improved technology in meat grading for confidence in product quality and consistency in the eating experience.
He also called for innovation and improvement in marketing beef-on-dairy products.
“By shifting from a production-driven to a consumer-demanded beef-on-dairy value chain there is a prospect to enhance value and provide an opportunity for beef on dairy and the non-replacement dairy calf.”
Farmers will need to communicate transparently, engage with consumers, and build trust through storytelling, education and advocacy efforts to promote the benefits of beef on dairy and address consumer concerns around sustainability and quality.
Iremonger is general manager of Willesden Farms, running 40,000 sheep and beef stock units on Banks Peninsula and for the twin Kaimoo dairy farms milking 1500 cows in Central Canterbury.
On his Nuffield scholarship travels Iremonger found that New Zealand is almost alone among the dairying countries in having a “bobby calf problem”.
The 1.8 million bobby calves killed in their first week after birth are an underutilised resource.
Among the reasons for inability to access value, he cited lack of consistency in NZ beef, intermittent supply and problems with grading.
About 40% of NZ beef production already comes from culled cows and slaughtered bobby calves from the dairy industry, being mainly manufacturing beef.
Within $4.6 billion of beef exports in 2022-23, nearly $2bn went to China and $260 million to Japan.
Meat companies are poorly represented in China, supply is inconsistent and grass-fed beef is discounted in many Asian markets because the market prefers grain-fed.
Iremonger said the supply of beef-on-dairy cattle is developing as a specialisation involving selected beef genetics such as Charolais, Wagyu, Angus and Hereford with desirable traits such as high growth rates, meat quality and suitability to NZ growing conditions.
“One of the main challenges to success has been the lack of financial participation along the value chain; someone is often missing out, often the calf-rearer.
“Also, the product is often less than successful as a farming system, [with] either underperforming animals or underperforming at processing with lower quality meat or both.”
The low carbon footprint and the pastoral system provide a unique point of difference for NZ beef on dairy.
The International Dairy Federation has a carbon accounting methodology that stipulates that 85% of the dairy cow’s emissions are attributed to her milk and 15% to her calf. By contrast a beef on beef calf starts life with 100% of the dams’ emissions attributable.
When NZ cattle are finished and processed the per kilogram beef GHG emissions are 29% lower for beef-on-dairy animals compared to a beef on beef animals.
The NZ birth-to-farmgate carbon footprint for beef-on-dairy animals is about half that of cattle in the United States and Australia.
Iremonger suggested opportunities with the beef-on-dairy market for grain finishing in compost bedded barns for 70 to 100 days.
Beef genetics with high calving ease and short gestation length in addition to the sires having high EBVs for growth, eye muscle area, yield and marbling (IMF) and feed efficiency would be desirable.
Iremonger identified what he called the market challenges, including effective branding and marketing strategies.
“Achieving consistent beef quality and meeting market specifications can be challenging, particularly for pasture-based beef production.
“Variability in factors such as genetics, nutrition, management practices, and processing methods can affect beef quality attributes such as tenderness, marbling, flavour, and consistency, which may impact market acceptance and consumer satisfaction.
“Consumer preferences and trends in the beef market are continually evolving, influenced by factors such as health and nutrition concerns, sustainability considerations, animal welfare standards and culinary trends.”
NZ farmers must navigate regulatory requirements related to animal health, welfare, traceability, food safety, labelling, and environmental stewardship to ensure compliance and market access.
He wanted adoption of beef on dairy to be independently financially driven and not forced by processing companies.
“Adopting beef-on-dairy practices should be a financial strategy to improve business performance and demonstrate commitment to sustainable farming practices, thereby enhancing their social licence to operate.
Appropriate beef-on-dairy genetics and feed strategies are needed.
The USDA beef grading system is an example of what NZ needs, for quality assurance, market value, consistency and in some cases market access.
The Meat Standards Australia (MSA) grading system and its index scoring for eating quality is another example.
After visiting the US, he reported that the development of the beef-on-dairy market has been called “arguably the most significant advancement for the US beef industry in a generation”.
The numbers of cattle in that category have increased from 50,000 in 2014 to over 3 million in 2024.
A collaboration between family-owned Sustainable Beef in Nebraska and Walmart has grown to 1500 head a day through the packing plant.
“Beef-on-dairy genetic cattle are providing a $150/head advantage over the standard due to the uniform product and performance,” he said.
Iremonger also found a Californian company, Grimmius Cattle, that raises 700,000 calves annually as a vertically integrated business that supplies genetics to dairy farmers, rears calves and finishes the cattle at feed yards.
It operates a calf buyback system with dairy farmers using Angus and Charolais genetics.
Technological advances in genomics and precision feeding systems are increasing the efficiency of calf-rearing and finishing.
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