Value-based pricing through DEXA can deliver up to $20 added value per carcase

By: "Farm Tender" News
Ag Tech News
Aug 16, 2018
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A shift to value-based pricing brought on by the adoption of DEXA technology at meat processing plants could deliver up to $20 per carcase in added value to the supply chain.

Historically, the industry has used a simple measure of fatness to predict lean meat yield, meaning that lamb was traded as a weight-based commodity, poorly reflecting the value of the saleable meat that consumers demand.

However, dual energy x-ray absorptiometry (DEXA) is allowing abattoirs to accurately measure the lean meat yield on each carcase at the processing line speed, enabling the industry to quickly and accurately assess the actual value of each individual carcase.

New analysis using the ‘cuts-based calculator’ developed by the Cooperative Research Centre for Sheep Industry Innovation (Sheep CRC), has found that the real value difference to a processor between a 27 kilogram score 2 carcase and a 21kg score 5 carcase could be up to $20 per carcase.

“This is a substantial difference if the abattoir had paid the same price per kg for each carcase in dollars per kilo,” Sheep CRC Meat Program Leader Prof. Dave Pethick said.

“The challenge for producers to gain their fair share of that extra value is to ensure they produce sheep that meet these tighter specifications if grids start to encourage larger carcases and penalise excess fat.”

Speaking at LambEx in Perth today, Prof. Pethick said the cuts-based calculator used the carcase weight and its DEXA values to estimate the weight of any commercial cut specified by a processor.

“The weight per cut information is then combined with the wholesale or retail price per kg for each cut to value each carcase,” he said. “The processor can also use the cuts-based carcase calculator to determine what cutting specifications to apply to maximise the return per carcase.”

Prof. Pethick said there were three factors contributing to the value of lean meat yield: carcase size, fatness and the extent of ‘fabrication’ (the breakdown of a carcase into cuts for sale).

“With increasing fat content, at any given carcase weight, there is a corresponding decrease in the value of the carcase to the processor, because as the carcase is broken down into more specific retail cuts, with increasing levels of fabrication, higher levels of fat have an increasingly negative impact on the value of the carcase due to the extra labour involved,” he said

“At the same levels of fat, heavier carcases have higher levels of saleable meat, but the benefits of heavier carcases are eroded if the additional weight is a result of increasing fat and not lean meat.”

He recommended that producers focus on genetics and nutrition to ensure they deliver to processors animals at a premium weight with the right amount of fat, and recognise that selecting fast growing genetics had implications for eating quality.

“Breeders and producers should recognise that as lamb and sheep meat becomes more expensive and measuring systems become more sophisticated, the market will introduce premiums and discounts that encourage production of meat the consumer wants and is prepared to pay for,” Prof. Pethick said.

The research collaboration which developed DEXA included the Sheep CRC, Murdoch University, Scott Automation and Robotics, JBS Australia, Meat and Livestock Australia (MLA), Sheep Producers Australia, Coles, the Australian Meat Processor Corporation, AgBiz Solutions, South Australian Research and Development Institute and the Victorian Department of Economic Development.

DEXA systems are now being installed in lamb and beef processing facilities across Australia, with the impact of the innovation expected to continue increasing as the value of accurate information on carcase composition is captured by all sectors of Australia’s red-meat value-chain.

More information is available at www.sheepcrc.org.au.