Final Report: Red Meat Co-Investment Committee: Lamb Supply Chain & Animal Information RD&E Plan

final report
Project code: B.LSM.0029

Prepared by: Scott Williams, Russell Pattinson
and David Hall
Date published: April 2013

ISBN: 9781741919950
PUBLISHED BY
Meat & Livestock Australia Limited
Locked Bag 991
NORTH SYDNEY NSW 2059
ished by
Red Meat Co-investment Committee:

Lamb supply chain & animal information
RD&E plan
Meat & Livestock Australia acknowledges the matching funds provided by the Australian
Government to support the research and development detailed in this publication.
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Red Meat Co-investment Committee: Lamb supply chain & animal information RD&E plan
Executive summary
Overview
This plan presents a draft RD&E strategy to improve efficiency of the lamb value chain
including the role of individual animal information (IAI). The plan is aligned with other
national sheep meat RD&E strategies.
The present supply chain for Australian lamb from seedstock through to retail product is
somewhat disjointed with very little information flowing between sectors in either direction.
This RD&E plan presents a strategy to improve efficiency and information flow with the
aim of developing a true value chain for the industry.
Individual animal identification for the Australian sheep industry is the subject of
considerable debate, conjecture and angst for some, whilst for others it creates
excitement about opportunities it creates. While the two are not inextricably linked, the
topic of individual animal identification almost immediately turns to electronic identification
(EID), a subject upon which opinions again vary significantly.
This report does not seek to dictate industry policy on the adoption of EID or any other
form of individual identification. However, it does recognise that the adoption of EID by
some or all of the Australian sheep industry is a high probability, in part to improve value
chain efficiency. Accordingly, this report provides a plan for RD&E to enhance existing
sheep identification systems and for new initiatives to facilitate further implementation of
EID depending on policy and industry support.
The following are key findings from the review of the present situation and previous
RD&E, discussions with many current and potential participants and independent
consideration of all the issues:
1. Over the last decade, there has been a significant body of work undertaken, by
regulators, researchers, extension staff, processors, leading farmers and other
commercial entities on individual and mob identification.
2. There is strong support for the role of animal identification from a traceability,
biosecurity and market access perspective. The debate arises as to whether
individual electronic identification is needed (noting that IAI systems currently have
very limited adoption) or whether mob identification is sufficient.
3. The commercial sector (software and hardware systems) is highly active and
competitive. There is little market failure in this space. It will be important not to
crowd out commercial operators in any future activities.
4. Fundamental research (i.e. starting again) should not be a priority for RMCiC
Partners. Emphasis should be placed upon building on what has already been
done – that is, on development and extension.
5. State agencies all support mob identification and their support for IAI / EID
depends on the type of information that can be transferred using IAI and its benefit
versus cost. Some agree that IAI is inevitable, but their commitment to invest
specific resources at this time, while the industry position is unclear, varies.
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6. Individual lamb identification does have a potential role in value-based marketing,

for example facilitating producers to be paid on meat yield.
7. The benefits of IAI are not clear to all sectors and can only be determined after
present systems are improved and more efficient systems are developed including
better transfer and interpretation of data.
The vision for this Plan is of a streamlined lamb value chain along which information on
animal management, genetics, heath status, carcase yield and product quality flows freely
in both directions, increasing the overall productivity and efficiency of lamb production, as
well as delivering other potential benefits such as improved market access, increased
biosecurity, reduced costs and increased consumer satisfaction and loyalty.
This Plan foresees an RD&E investment of approximately $13.5 million over four years
across three key outcome areas. It also makes recommendations in relation to a
governance structure to oversee implementation of the Plan and the appointment of a
part-time project officer ($0.4 million) for a total investment of $13.9 million. The Plan is
designed to contribute to the increased information flow, management and utilisation that
is targeted to deliver an increase in lean meat yield of 0.2% pa whilst maintaining or
improving eating quality.
The plan – at a glance

Three key outcome areas (investment strategies) form the basis of this RD&E Plan. They
are:
Outcomes Projects
1. Collect and transform data 1.1 Develop technology for real-time assessment of meat quality
into information of value to attributes and meat yield in the live animal (leverage off beef work
participants if successful)
1.2 Develop and/or demonstrate better technologies for in-abattoir
measurement of sheep meat and carcases based on specification,
meat yield and meat quality attributes, especially the linkages
between NLIS and carcase tags
1.3 Develop expert systems that integrate information to assist
producers to interpret and utilise data collected on farm and via
processors as a result of projects 1.1 and 1.2
1.4 Develop systems to collect animal health data and interpret and
transfer this data to producers and animal health / biosecurity
agencies
2. Improve sharing of 2.1 Analyse the lamb value chain and points for value-add and
information along the value intervention; quantify benefits of tracking animals from farm to
chain processing to retail at each point in the chain
2.2 Investigate social, commercial and financial opportunities and
barriers to information collection, sharing and use throughout the
value chain
2.3 Develop and extend national standards for information
exchange along the pipeline – language, formats
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Outcomes Projects
2.4 Develop technology to allow processors / consumers to

establish the ‘provenance’ (origin, at property or individual animal
level) and credence of sheepmeat products
3. Demonstrate, communicate 3.1 Establish a forum for the exchange of information and improved
and extend the benefits of communication between participants in the value chain
improved information flow
3.2 Design, implement, demonstrate and evaluate a number of
integrated information systems; quantify costs and benefits of
these
3.3 Develop and implement a national extension / education
program on lamb value chain, linked to 3.2 but also including
stand-alone modules (e.g. through Making More from Sheep)
3.4 Examine role of IAI in enhancing industry logistics
It is envisaged that the successful completion of these projects would lead to the following
outputs:
 System(s) to allow interpretation and use of data by producers;
 System(s) to collect and communicate animal health data from abattoirs;
 Understanding of the ‘what’s-in-it-for-me’ for individual participants of interventions to
improve information exchange, incorporating both economic and cultural/social
factors;
 Standardised definitions and rules to facilitate information exchange along the chain;
 Technology to allow retailers/consumers to establish the provenance (source,
environmental and welfare credentials) of a lamb product;
 Establishment of a vehicle (a forum) by which value chain participants can exchange
information and ideas – acknowledging that there will be commercial constraints to
the information that is shared;
 Demonstration and validation of integrated value chain(s) systems;
 Delivery of extension and training programs; and
 Establishment of baseline data that can be used to monitor progress of IAI.
A benefit/cost analysis of the R,D&E Plan, focusing only on technology to collect and
transform data along the chain and the price premiums realised as a result, estimates a
benefit/cost ratio of between 6.52 (pessimistic) and 8.73 (core scenario).
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Table of Contents
ABBREVIATIONS USED IN THIS DOCUMENT .................................................................... 9

1. RATIONALE ..................................................................................................... 10
1.1 Planning context ......................................................................................................................10
1.2 Objective .................................................................................................................................10
2. SITUATION ANALYSIS ....................................................................................... 11

2.1 Overview of the sheepmeat value chain .................................................................................11
Production ................................................................................................................................................. 11
Lamb selling systems ............................................................................................................................... 13
2.2 Processes and systems ..........................................................................................................14
National Livestock Identification System (NLIS) .................................................................................... 14
Livestock Data Link................................................................................................................................... 16
Sheep Genetics ......................................................................................................................................... 16
Precision sheep management .................................................................................................................. 17
Meat Standards Australia and Livestock Production Assurance ......................................................... 17
Summary .................................................................................................................................................... 18
2.3 Analyses of the value of EID / IAI ...........................................................................................19
2.4 Models from other agricultural industries ................................................................................21
Beef 21
Pork 22
2.5 Models from overseas .............................................................................................................22
New Zealand .............................................................................................................................................. 22
European Union (EU) ................................................................................................................................ 23
USA 23
Canada ....................................................................................................................................................... 24
2.6 SWOT of present value chain and value of individual animal information (IAI) ......................24
Strengths of IAI to improve value chain efficiency ................................................................................ 24
Weaknesses of IAI systems ..................................................................................................................... 24
Opportunities for IAI to improve value chain efficiency ........................................................................ 24
Threats to using IAI ................................................................................................................................... 25
3. STAKEHOLDER PERSPECTIVES AND POTENTIAL CONTRIBUTIONS ......................... 25

3.1 Funding bodies ........................................................................................................................26
Meat & Livestock Australia ....................................................................................................................... 26
Australian Meat Processor Corporation .................................................................................................. 26
LiveCorp ..................................................................................................................................................... 26
3.2 State agencies ........................................................................................................................26
DPI Victoria ................................................................................................................................................ 28
NSW DPI ..................................................................................................................................................... 28
PIRSA / SARDI ........................................................................................................................................... 29
DAFWA ....................................................................................................................................................... 29
DPIPWE ...................................................................................................................................................... 29
DEEDI 29
3.3 Universities ..............................................................................................................................30
The University of Melbourne .................................................................................................................... 30
Charles Sturt University ........................................................................................................................... 30
3.4 Sheep CRC .............................................................................................................................30
3.5 Commercial operators .............................................................................................................31
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Identification system suppliers ................................................................................................................ 31

Saleyard operators .................................................................................................................................... 32
Processors ................................................................................................................................................. 32
4. VISION ............................................................................................................ 32
5. GAP ANALYSIS ................................................................................................ 34
5.1 What is needed to reach the vision? .......................................................................................34
5.2 Links and associated activities ................................................................................................38
6. LAMB SUPPLY CHAIN RD&E PLAN ................................................................... 38

6.1 Outcome areas ........................................................................................................................38
Outcome 1: Collect and transform data into information of value to participants .............................. 39
Outcome 2: Improve sharing of information along the value chain ..................................................... 43
Outcome 3: Demonstrate, communicate and extend the benefits of improved information
flow .................................................................................................................................................. 46
6.2 Portfolio characteristics ...........................................................................................................49
Summary of timeframes for delivery ....................................................................................................... 49
Summary of indicative budget ................................................................................................................. 49
6.3 Links to other programs ..........................................................................................................50
6.4 Portfolio risks and risk management .......................................................................................50
7. ECONOMICS .................................................................................................... 51
Economic evaluation, plan outcomes and analysis approach .............................................................. 51
Costs incurred to realise economic benefits .......................................................................................... 52
Benefit identification and estimation....................................................................................................... 53
Summary of benefit/cost analysis results ............................................................................................... 54
Economic evaluation conclusion............................................................................................................. 55
8. ALIGNMENT WITH INDUSTRY / GOVERNMENT PRIORITIES ..................................... 55

9. MANAGEMENT STRUCTURE AND REPORTING ...................................................... 56
9.1 Steering Committee ................................................................................................................56
Overview and role ..................................................................................................................................... 56
Membership ............................................................................................................................................... 57
9.2 Program and project management .........................................................................................57
APPENDIX 1: RELEVANT EXCERPTS FROM RELATED INDUSTRY PLANS .......................... 58

National Sheepmeat Production RD&E Strategy ..............................................................................58
Sheepmeat Industry Strategic Plan (SISP) .......................................................................................59
MLA Strategic Plan 2010-15 .............................................................................................................60
APPENDIX 2: FURTHER INFORMATION ON R&D FUNDERS AND PROVIDERS ................... 60

AMPC ................................................................................................................................................60
DPI Victoria........................................................................................................................................61
NSW DPI ...........................................................................................................................................62
Sheep CRC .......................................................................................................................................63
APPENDIX 3: SCENARIOS FOR 2020 .......................................................................... 64

A producer perspective .....................................................................................................................64
Sylvia’s story ............................................................................................................................................. 65
Jack’s story ............................................................................................................................................... 67
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A consumer perspective ....................................................................................................................68

Jenny’s story ............................................................................................................................................. 68
APPENDIX 4: LISTING OF ORGANISATIONS CONSULTED ............................................... 69

APPENDIX 5: DOCUMENTS REVIEWED IN THE PREPARATION OF THIS PLAN .................... 70
Plans and programs for improved lamb value chain efficiency from Australia and overseas ...........70
Research papers, evaluations, extension and media articles ............................................................... 71
List of Tables
Table 1 – Sheepmeat production R,D&E priorities in state agencies................................ 27
Table 2 – Gap analysis .................................................................................................... 35
Table 3 – Summary of indicative budget for RD&E Plan .................................................. 50
Table 4 – Plan risks and mitigation .................................................................................. 51
Table 5 – MLA and co-investor budget to deliver Outcome 1 ........................................... 52
Table 6 – Plan benefits for industry .................................................................................. 53
Table 7 – Summary of assumptions ................................................................................. 54
Table 8 – Benefit/cost analysis results (discount rate 7%, 30 years) ................................ 55
Table 9 – Alignment with Rural R&D Priorities ................................................................. 56
Table 10 – Distinction between ‘supply chain’ and ‘value chain’ approaches (Vic DPI) .... 61
List of Figures
Figure 1 – Number and size of slaughter lamb-producing farms 1989-90 to 2009-10....... 11
Figure 2 – Sheep flock (millions) and lamb production ‘000 tonnes cwt ........................... 12
Figure 3 – Lamb selling methods for farms that slaughter more than 200 lambs .............. 13
Figure 4 – Lamb selling methods used by farm performance groups ............................... 14
Figure 5 – Simplified diagram of current data generation and flows along the lamb value
chain ......................................................................................................................... 19
Figure 6 – Summary of timeframes for delivery of RD&E Plan ......................................... 49
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Acknowledgements
The authors gratefully acknowledge the assistance of the many people who provided
input to this report. In particular, we thank the members of the Project Development
Team (PDT), who provided the reference point for the RD&E Plan. We also thank
Andrew Alford of MLA for undertaking the benefit/cost analysis on the proposed
program.
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Abbreviations used in this document

ALPA Australian Livestock and Property Agents
AMPC Australian Meat Processor Corporation
ASBV Australian Sheep Breeding Value
BCA Benefit/cost analysis
CCW Chilled carcase weight
CIS Client and Innovation Services (of MLA)
CRC Cooperative Research Centre
CRRDC Council of Rural Research & Development Corporation Chairs
DAFWA Department of Agriculture and Food Western Australia
DEEDI Department of Employment, Economic Development and Innovation (Qld)
DPI Department of Primary Industries
DPIPWE Department of Primary Industries, Parks, Water and Environment (Tas)
EID Electronic identification
EMD Eye muscle depth
H(S)CW Hot (standard) carcase weight
IAI Individual animal information
LDL Livestock Data Link
LMY Lean meat yield
LPA Livestock Production Assurance
MLA Meat & Livestock Australia
MSA Meat Standards Australia
NAHIS National Animal Health Information System
NAIT National Animal Identification and Traceability (scheme, NZ)
NLIS National Livestock Identification Scheme
NLRS National Livestock Reporting Service
NVD National Vendor Declaration
OTH Over-the-hooks
PIC Property Identification Code
PIMC Primary Industries Ministerial Council
PISC Primary Industries Standing Committee
PIRSA Department of Primary Industries and Regions South Australia
RFID Radio frequency identification
RD&E Research, development & extension
RMCiC Red Meat Co-investment Committee
SAMRC Southern Australian Meat Research Council
SARDI South Australia Research & Development Institute
RTO Registered Training Organisation
SG Sheep Genetics
TIAR Tasmanian Institute of Agricultural Research
UNE University of New England
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1. Rationale
1.1 Planning context

This Plan has been prepared for the Red Meat Co-investment Committee (RMCiC),
representing the major players in red meat research, development and extension
(RD&E): Meat & Livestock Australia (MLA); State Departments of Primary Industries;
CSIRO; CRCs for Beef Genetic Technologies and Sheep Industry Innovation;
Department of Agriculture, Fisheries & Forestry; and member faculties of the Australian
Council of Deans of Agriculture.
The Plan is one of 4-5 implementation plans for key program areas arising from the
National Sheepmeat Production RD&E Strategy. The National Sheepmeat
Production RD&E Strategy was developed by the RMCiC under the leadership of the
NSW Department of Primary Industries (NSW DPI) and MLA and published by the
Primary Industries Standing Committee (PISC) in January 2010. The Strategy identifies
seven strategic imperatives for sheepmeat RD&E that align with Government and
industry priorities.
The Sheepmeat Industry Strategic Plan (SISP) 2010-2015 captures industry
priorities. It contains a number of deliverables, relevant to this Plan, that are related and
additional to those of the National Sheepmeat Production RD&E Strategy.
Finally, the MLA Strategic Plan 2010-15 contains several imperatives and strategies of
relevance to this Plan.
The specific elements of each of these plans with relevance to this Plan are reproduced
in ‘Appendix 1: Relevant excerpts from related industry plans’.
1.2 Objective
This RD&E Plan aims to describe a path which will lead to a streamlined lamb value
chain along which information on disease, carcase yield and product quality flows
freely, increasing the overall productivity and efficiency of lamb production as well as
delivering other potential benefits such as increased biosecurity and on-farm animal
welfare. The Plan is designed to contribute to the increased information flow,
management and utilisation that is targeted to deliver an increase in lean meat yield of
0.2%1 pa whilst maintaining or improving eating quality.
1
Target agreed with Project Development Team, 25 June 2012.
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2. Situation analysis
2.1 Overview of the sheepmeat value chain

Production
The Australian lamb industry is now a profitable and growing industry that has changed
significantly in the last 20 years. These changes are well documented (e.g. ABARES
2011, CIE 2008a, MLA 2009, PISC 2010) and are not repeated here.
However, there are some key statistics pertinent to the development of an RD&E plan
for improved use of individual animal or mob information. This information has been
referenced from the above documents, plus others such as Goers & Craig (2008) and
Martin & Phillips (2011).
 Around 19,240 Australian broadacre farms are classified as slaughter lamb
producers (those farms that sold more than 200 lambs for slaughter in 2009–10).
 Around 9,400 slaughter lamb producers earn more than 20% of their total farm
receipts from the sale of slaughter lambs and are classified as specialist slaughter
lamb producers.
 The scale of lamb producers varies significantly – there are few large producers
(>1,000 lambs per year) but many smaller producers (< 500 lambs per year). The
number of producers with less than 200 lambs has declined in the last 20 years.
Figure 1 – Number and size of slaughter lamb-producing farms 1989-90 to 2009-10
 Lamb producers’ average income has increased markedly over the last three years
and in real terms is the highest it has been for over 20 years (as is the level of
investment in new equipment).
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 The total sheep flock is approximately 74 million, having increased slowly over the
last couple of years from its lowest point since the early 1900s. Numbers by state
are NSW 25m, Victoria 15m, WA 16m, SA 10m, Qld 4m and Tasmania 2m.
However, the proportion of ewes is at record levels, which provides an opportunity
for some flock rebuilding depending on seasonal conditions and relative commodity
prices.
 Despite the low total sheep numbers, the number of slaughter lambs has remained
fairly constant (increased by 4% over the last 10 years), with the slaughter number
in 2011-12 expected to be 18.4m.
Figure 2 – Sheep flock (millions) and lamb production ‘000 tonnes cwt
 Average carcase weight has increased by 10% over the last 10 years (20% over
20 years), while total lamb production increased by 14% over the same period.
 There is no doubt that leaner lambs are being produced but there is limited industry
data on fat scores or other measures of fat, nor on how many producers sell and
meet preferred buyer specifications. It is an AUSMEAT mandatory requirement for
accredited abattoirs to provide feedback on fat and hot standard carcase weight to
vendors, but no summary data is available and there is no central reporting.
 The National Livestock Reporting Service (NLRS) collects data on weight and fat
cover from pens of lamb sold at saleyards but there is no data collected for direct
sales to processors. In recent years, data collected by NLRS has not been
collated. If individual animal identification (IAI) was used throughout the industry
and was linked to weight and fat measures within the abattoir, there would be data
available to determine weight and fat on a regional and seasonal basis and over
time. This could be used to assess industry progress in meeting required market
specifications.
 Lamb consumption per head in Australia was about 18kg in 1980, declined to
about 12kg in 1993 and now appears to have stabilised at a level between 11 and
12kg.
 The total value of the sheepmeat industry is $4.32b, a 93% increase since 1998-
99.
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 Total exports in 1994 were $190m compared to $823m in 2007, with exports
increasing from 15% to 45% of production over the period.
There are a large number of processors in Australia that slaughter lambs, but accurate
data on the numbers of lambs killed by key processors is difficult to obtain. However it
seems that about half the lambs are killed at abattoirs owned by T & R (SA & NSW) and
JBS (Vic & SA) with the dominant WA processor being WAMMCO.
Lamb selling systems

At present most lambs in Australia are sold through saleyards. The proportion of lambs
sold over the hooks (OTH) increased from 3% in 1989-90 to 36% in 2006-07 but has
declined since to an estimated 18.2% in 2009-10 (Martin & Philips 2011). Anecdotal
information suggests that the percentage of lambs sold direct is higher than shown
below.
Figure 3 – Lamb selling methods for farms that slaughter more than 200 lambs
The selling method employed varies with farm financial performance, with higher
performing producers being more likely to sell direct to processors (i.e. OTH or in the
paddock).
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Figure 4 – Lamb selling methods used by farm performance groups
In any of the lamb-selling systems, the sale could be per head or could include an
actual or estimated carcase weight and/or price variations for actual or estimated fat
levels. There are generally penalties for lambs being overfat or being too lean. Ideally,
payment should be on lean meat yield to reward producers who have slaughter lambs
with preferred weight, muscle and fatness levels. Two Australian and eight New
Zealand processing plants have systems that can pay on lean meat yield. It is more
likely saleyard prices will be on a per head basis, with weights and any fat levels being
estimated on an average sale-mob basis.
Only in direct sales to a processor, or OTH, will prices vary with hot carcase weight and
often also with fat level. A range of grids is used by processors with prices varying
according to where the lamb fits into the grid by weight and fat depth. Direct selling has
been promoted to producers over many years because it provides the best way to link
price to performance against buyer specifications and to allow feedback to the producer
on the most valued attributes.
Saleyards do not provide any carcase or other feedback to the producer. Theoretically
this would be possible but it is unlikely that once ownership has passed from the
producer at the saleyards that the new owner will see any advantage in providing (say)
carcase information to the previous owner.
2.2 Processes and systems

National Livestock Identification System (NLIS)
The unique identification of livestock has been a hotly debated subject for many years.
Recent demonstrations of this debate have included the introduced requirement for full
traceability of cattle exported live to Indonesia to enable the continuation of the trade
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and the need of the horse industry for a system to identify and manage horse
movements in case of a disease outbreak (such as Hendra virus).
The ability to identify and monitor sheep in Australia has similarly been the subject of
much discussion and research over many years. There seems little disagreement that a
system to identify and monitor sheep and other livestock movements is crucial to
support Australia's biosecurity and market access efforts. Thus there is a regulatory
need, but not necessarily a domestic marketing need. Opinions differ as to how that
should best be managed.
Many argue that radio frequency identification (RFID) provides the most comprehensive
approach to animal identification. It is also argued that RFID can provide benefits to
producers through enhanced ability to manage individual animal information (genetics,
production, management, health) and to processors. However, very few Australian
sheep producers seek to keep detailed production information at a mob level, let alone
at an individual animal level. In addition, while the costs are reasonably clear (electronic
tags, readers, scales, computer hardware and software), the benefits are less well
clarified and may not be equitably allocated along the pipeline (see below).
There is currently no regulatory requirement for sheep producers to use an electronic
identification system. However, all sheep and farmed goats must now be identified with
an approved NLIS (Sheep – visual) tag prior to dispatch to a saleyard, abattoir, or
property with a different Property Identification Code (PIC). NLIS (Sheep) tags must be
stamped with the Property Identification Code (PIC).
Sheep and goat producers are also required to:
 Ensure their properties have a PIC; and
 Provide a National Vendor Declaration (NVD) when dispatching sheep or farmed
goats of any age to a saleyard or abattoir, or to another property.
There are two types of visual NLIS (Sheep) tags approved for the permanent
identification of sheep and farmed goats:
 NLIS breeder tags (colour coded for year of birth); and
 NLIS post breeder tags (always pink).
Sheep producers also have the opportunity to purchase electronic tags for use as part
of the NLIS (Sheep & Goats). The use of electronic sheep tags is voluntary. The cost of
these tags has recently been reduced to $0.90 in Victoria (through a Government
subsidy) and is approximately $1.10 – $1.20 in other states. To support those wishing to
use EID, an NLIS Device Standard for Sheep RFID was finalised in early 2009.
In relation to the uploading of information onto the NLIS database:
 All mob-based movements of sheep and goats between properties have been
required to be uploaded to the NLIS database since 1 July 2010 (WA commenced
in 2011). Uploading of the information contained on the movement document to the
NLIS database is the responsibility of the person receiving the sheep or goats at
that property. This must be done within 7 days of the arrival of the sheep or goats.
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 For saleyards, mob-based uploads to the NLIS database for sheep and goats have
been occurring since 1 September 2009. The mob-based upload is done by the
owner or person in charge of the saleyard and usually within a day after the sale.
 For abattoirs, feedlots, goat depots and export depots, mob-based uploads to the
NLIS database have occurred since 1 January 2010.
NLIS identification ceases to accompany the individual animal once the head is
removed from the carcase. Individual traceability can only continue through the chain if
the NLIS identifier is transferred from the eartag to the carcase. This has been achieved
in some abattoirs by attaching an electronic device to the gambrel on which the carcase
hangs and linking this device to the NLIS code.
Livestock Data Link

Livestock Data Link (LDL) is a pilot project being run by MLA, NSW DPI and Victorian
DPI to use the NLIS database to deliver carcase feedback to beef and lamb producers.
It will allow participating processors to upload carcase feedback, which can be
accessed by producers via their NLIS account. Carcase performance data can be
benchmarked against regional performance and also mapped for compliance against
industry generic grids (e.g. 100-day grainfed). The system will calculate the cost of non-
compliance against the relevant grid and will also provide links to sources of information
to address identified problems – for example, where carcases are too light, it will refer to
‘More Beef from Pastures’ on finishing systems.
Phase 2 of LDL will incorporate data from Meat Standards Australia (MSA – see below)
into the system and will also provide an interface to assist processors. LDL will also be
expanded to include sheep, at both mob and individual level, using weight, fat, yield and
dentition. One of the challenges for Sheep LDL will be that sheep grids are far less
defined and are more linear than for cattle. Once the sheep system is established there
are plans to incorporate data on skins, on health issues and from MSA.
Sheep Genetics
Sheep Genetics (SG) is the sheep industry’s national database of estimated breeding
values (Australian Sheep Breeding Values, or ASBVs). ASBVs exist for a wide range of
traits relating to meat and wool production as well as reproduction, parasite resistance
and other traits with economic value. ASBVs can be combined in weighted indexes to
provide a summary of an individual’s genetic merit according to an identified market
objective.
Sheep Genetics is a joint program of Meat & Livestock Australia and Australian Wool
Innovation and on its creation brought together previously unlinked databases from
Merino and non-Merino breeds. SG operates as both a wholesaler and retailer of
genetic analyses. Sheep breeders or consultants provide data files in certain agreed
formats (including spreadsheets) that are checked by SG staff before being uploaded to
the database and analysed by the Animal Genetics and Breeding Unit (AGBU) at the
University of New England.
ASBVs are calculated using Best Linear Unbiased Predictor (BLUP) algorithms which
estimate the genetic merit of an individual from its own measured characteristics (e.g.
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growth rate) and the measured characteristics of animals related to that individual (e.g.
brothers, sisters, parents, offspring). The greater the number of relatives and the closer
the relationships the more accurate the ASBV. The ASBV provides a prediction of
performance relative to the average; for example, a particular sire may produce
offspring that grow 25% faster than the average across all sires.
ASBVs are now used by a significant proportion of maternal and terminal sire seedstock
breeders when purchasing outside genetics and when making internal selection
decisions. ASBVs are also made available at sale where they influence the purchasing
decisions of a proportion of commercial producers and possibly the management
decisions of an even smaller number of producers. However, the link between ASBVs
and other data stops at this point. Data on the performance of commercially-bred sheep
is not collected and fed into the ASBV calculation process, where it would increase the
accuracy of ASBVs, nor is the ASBV ‘heritage’ of commercially-bred sheep used to
predict their performance.
A recent review showed that the SG database can accommodate NLIS identifiers so
that individuals on the SG database could be linked to the NLIS database.
Precision sheep management

With the advent of EID over the last decade or so there has been increased interest in
individual animal-based – as distinct from mob-based – performance management on
farms. The Sheep CRC was established with this opportunity, in both wool and meat
production systems, as a major focus of its RD&E. The concept is also known as
‘precision sheep management’. Precision sheep management does not require EID but
has been facilitated by it and by developments in the associated equipment (weighing,
recording and drafting systems).
The potential benefits of precision sheep management include:
 More efficient allocation of resources – for example, scanning ewes and removing
non-pregnant ones to lesser-quality pasture or out of the flock altogether;
 Increased accuracy of retain / cull decisions within the flock, from both lifetime
production and breeding perspectives; and
 Increased returns from marketing, for example by segregating animals on
bodyweights for targeted sale and/or by objective classing of wool.
Information gained from precision sheep management stays on the individual farm
where it may be captured in a proprietary software system or simply in spreadsheets. It
does not become available for any purpose further down the chain (fattening,
processing or retail) or up the chain (seedstock).
Meat Standards Australia and Livestock Production Assurance

Meat Standards Australia (MSA) is the red meat industry’s eating quality program. It
provides a system by which meat can be graded according to its optimal cooking
method and resultant eating experience. The gradings are based upon extensive
research linking juiciness, tenderness and other aspects of consumer preference with a
wide range of cattle and sheep management practices, processing systems, cuts,
ageing periods and cooking methods.
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Lamb (and beef and goat) producers must register with MSA to have their product
graded. For beef, a range of three gradings is available, while sheepmeat either meets
the standard or it does not. To meet the standard, a producer must meet several basic
criteria:
 Lambs are consigned with a national vendor declaration which must continue to
the processor;
 Lambs must be minimum fat score 2;
 Lambs are recommended to have a growth rate of at least 150g/day at least one
month prior to processing;
 Lambs must not be shorn within one month prior to processing;
 Different age groups of lambs must be penned separately;
 Merino and Merino-cross breeds must be penned separately;
 Lambs must have access to water at all times other than time required for sale;
and
 Lambs must be processed within 48 hours off-feed.
Market acceptance of MSA for sheepmeat has accelerated in recent years. In 2009/10
approximately 0.5m lambs were presented for MSA grading, whereas the
corresponding figure for 2011/12 is approximately 3.3m carcases2.
Summary
Various ‘islands’ of data are produced along the lamb value chain. These provide useful
information on:
 Individual identity;
 Genetic merit;
 On-farm performance and management; and
 Performance at processing.
However, as the term indicates, there is limited communication between these ‘data
islands’, which diminishes the value of the data. The NLIS database provides a
mechanism by which this communication could occur and there are moves through the
Livestock Data Link project to establish these linkages.
The various information systems are shown in overview in Figure 5, which emphasises
the disconnectedness between them.
2
David Jones, MLA, personal communication.
Page 18 of 76
Figure 5 – Simplified diagram of current data generation and flows along the lamb value
chain
SEEDSTOCK COMMERCIAL SALEYARD ABATTOIR W’SALE/ CONSUMER

RETAIL
POTENTIAL INTEGRATED SYSTEM
Preparation
Storage and
handling
CONSUMER
EXPERIENCE
Storage and
handling Tenderness
Juiciness
Flavour
Processing
performance Integrity
Handling
Most
Most
Nutrition,
husbandry,
handling,
Small (via MSA)
Small welfare, Most
environment -
on-farm systems
Most
Genetic merit -
Sheep Genetics Most Current
Potential
2.3 Analyses of the value of EID / IAI

There have been a large number of analyses and case studies on the benefit/cost of
specific elements of the sheepmeat value chain from the introduction of IAI or EID for
the sheep industry in Australia. While these analyses focus on the likely area of benefit
(enhanced genetic progress, reduced costs etc) it is evident from discussions with
industry that there are also numerous ‘benefits’ that may apply to an individual's
circumstances as distinct from the generic benefits accruing to the industry or a sector
of it. So-called ‘light bulb moments’ can cover a variety of situations, such as making it
easier to sort ‘boxed’ mobs of sheep, guarding against or monitoring diseases such as
OJD, facilitating drafting of sheep in inclement weather, and so on. Thus, many of the
concepts inherent in the Precision Sheep Management program of the Sheep CRC
depend on IAI as do programs to assess the actual value of sires.
More formal analyses include:
 A comprehensive examination of NLIS Technical and Operational Barriers from
farm to abattoir commissioned by the Sheep CRC (O'Halloran et al, 2008). This
review identified the practicalities, limitations, indicative costings and technical
development required for the implementation of a full RFID system. While the
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integrated use of RFID is possible along the sheep value chain, several barriers
exist particularly in relation to arrangements in saleyards and the cost of gearing up
for processors.
 A study of sheep identification options to meet National Livestock Traceability
Performance Standards (NLTPS) for biosecurity, food safety / integrity and market
access by CIE (2010a). The study found that the existing arrangements as
currently applied for sheep identification in Australia (mob-based visual tags) did
not meet NLTPS. A disease outbreak such as FMD may cost $1 to $2 billion. While
EID was a more costly option than enhancements to the current system (0.5% to
1% of GVP), CIE concluded that EID also provided greater potential benefit (BCA
of 1.6 to 3.8 for EID options).
 A similar analysis for DPI Victoria (PWC 2010a), which arrived at very similar
conclusions.
 An evaluation of the Victorian DPI NLIS (Sheep & Goats) Extension project. Within
this review, PWC (2010b) modelled the costs and benefits (such as labour saving
and genetic improvement) of EID and, similar to the MS&A (2010) report described
below, found that benefits were dependent upon the size and type of enterprise.
Producers with less than 500 sheep (wool producers) to 1000 sheep (non wool
producers) were unlikely to receive net benefits under the assumptions made.
 A comprehensive study by MS&A (2010) for DPI Victoria which showed that the
economic benefits of RFID were property-specific and dependent on scale of
operation, enterprises run and level of production. On-farm benefits included
quantifying the characteristics of individual animals, culling of poor performing
individuals, selection of elite sheep, flexible allocation of sheep to different mating
groups and within-season management for different feeding/breeding strategies.
RFID was found to be ideal for any flocks/studs using measurement, while the
benefits for commercial flocks (especially first-cross) were less clear. The
management of data collected from the RFID system was considered the weakest
link.
 An analysis by Greenleaf Enterprises (2010) that examined the potential value of
individual carcase identification and automated chiller sortation for a lamb
processing plant. This ‘preliminary scoping study’ indicated that there is a return on
investment of 12.6% pa to processors through reduced costs, better occupational
health and safety and enhanced traceability. It also suggested that EID provided
the basis for the integration of other technologies, such as objective carcase
grading, for total benefits estimated at $2.73 per head.
 A report by the Victorian DPI (Anon 2009) on the costs for an abattoir to install a
small stock carcase correlation system. This report documented the benefits of
RFID, but did not include any dollar values.
 An evaluation of MLA’s lamb production RD&E, specifically ‘Clear Market Signals
and LIDS (Livestock Identification and Description System)’ by Agtrans (2008).
 An evaluation of the benefit/cost (GHD 2011) of e-surveillance for a small stock
chain in Australian abattoirs so as to identify (and provide information to producers
and processors on) ten important diseases able to be detected by routine meat
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inspection. The study estimated a benefit/cost ratio of 3.3 : 1, 80% of which would
be gained by producers, although this does not necessarily depend on EID.
 A summary of ‘Individual animal ID, monitoring & traceability’ for sheep which
estimated benefits from increased productivity in Merino breeding of $2.50 -
$3.50/head and wool marketing of $0.60 - $2.40 /head, but unclear benefits in
specialist prime lamb flocks. The value in abattoirs was assessed as less clear
(Anon 2010).
 Numerous studies showing the benefits of selecting various ram types and
following progeny through to the processor sector which requires IAI. For example,
selection of flock rams for large eye muscle depth improved boning room
profitability of their progeny by 2.4% (McLeod et al 2007) and selecting high growth
rate lambs improved profitability by $11.26 per lamb (McLeod & White 2005).
Industry benefits will follow the use of IAI.
2.4 Models from other agricultural industries

Beef
RFID tags for cattle have been required for many years under NLIS. The following
process takes place:
 Cattle producers apply a white NLIS device (either an ear tag or a rumen bolus/ear
tag combination) to cattle bred on their property.
 When cattle move from one PIC to another, devices are scanned electronically with
a tag reader, or the NLIS ID number printed on the outside of the device is read
visually and the numbers noted. The transaction details are then recorded on the
database and automatic notifications are sent to the appropriate account holders
and authorities via email.
 If cattle are bought or sold through a saleyard or sold to an abattoir, the saleyard or
abattoir records the transaction.
 If cattle are bought or sold privately, the person who receives the cattle is
responsible for notifying the database.
 If cattle move between properties with a different PIC, the movements must be
recorded on the database, even if the properties have the same owner.
 If cattle move to an agistment property owned by someone else, the movement off
the owner's property and onto the agistment property must be recorded on the
database.
Despite the use of RFID tags for several years, few producers or processors use them
to enhance management. The challenge for the lamb as well as beef industries is to
capitalise on what EID can offer. There are examples of integrated value chains in beef
that capitalise on animal traceability. One such example is meat processor Greenham
Tasmania Pty Ltd which has established several premium beef brands (including Cape
Grim, Pure South and Greenham Tasmania). Producers are paid according to MSA and
other quality gradings (such as organic certification) achieved by their cattle.
Page 21 of 76
Pork
All pigs over 20kg in SA, 25kg (NSW and Vic), 30 kg (Qld) or over 10 weeks of age (Tas
and WA) must be tattooed with the owner’s registered swine brand. Pigs under the
minimum branding weight are recommended to be ear tagged with the PIC of property
of origin prior to property movement but this is not mandatory, creating a gap for
traceability. The tattoo identification is lost at skin removal during processing unless
another tracing system is in place.
The PIC must be included on the NVD form that is part of the PigPass System, which is
equivalent to NLIS. The PigPassNVD serves two purposes:
 It enables traceability of pigs in the event of an animal disease outbreak; and
 It identifies areas of potential risk for processors in supplying their markets.
The PigPassNVD can be electronic or paper-based. An individual pig carcase number
or batch number can be attached as a label to the carton of pork cuts / products in the
boning room so traceability through to retail is possible. PigPass is not designed to
provide carcass feedback to the producer. However, abattoirs provide kill sheets with
carcase data and most pigs are sold direct.
For improved traceability the pork industry is developing the Physi-Trace system which
allows traceback from a retail pork cut to the slaughter establishment and subsequently
to the farm where the animal was raised. Physi-Trace uses trace element and isotopic
analysis together with the PigPassNVD. Physi-Trace is in the final evaluation stages
before being implemented.
Australian Pork Limited is working with one of the most integrated chains in the
Australian pork industry to improve objective measurement, buyer/seller relationships
and the flow of market signals in the industry, with the ultimate objective to provide a
much more efficient value chain with better links between value and quality.
Thus there is a chicken-and-egg situation with EID: it may only have a place when the
lamb value chain is well integrated, but on the other hand, it could help to create this
integration.
2.5 Models from overseas

New Zealand
The National Animal Identification and Traceability (NAIT) project in NZ dates back to
August 2004 when industry approached the Government to work together to improve
animal tracing in New Zealand.
New Zealand’s mandatory NAIT scheme (based on RFID) is set to commence for cattle
on 1 July 2012 and for deer on 1 March 2013. The Ministry of Agriculture and Forestry
have previously advised that if sheep were to be included at some time in the future, it
would likely be at a flock or mob level rather than at an individual animal level. It
believes the addition of any other species to NAIT should only be considered once the
system is up and running for cattle and deer.
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Livestock companies (including saleyards and stock and station agents who act on
behalf of farmers) and meat processors will have to invest in tag readers to record
individual animals entering their premises. In addition, they may need to modify their
premises and amend their processes and management systems. One-off costs for New
Zealand’s 45 meat processors to set up for NAIT are estimated to be $1.2 million in
total. For New Zealand’s saleyards and stock and station agents, set-up costs will be an
estimated $6 million in total. Annual costs for livestock companies and meat processors
are estimated to be $1.3 million and $250,000 respectively.
We understand there are some 250,000 sheep and 40,000 cattle on the NAIT system
linked to Silver Fern Farms (Peter Bailey, personal communication).
European Union (EU)

In the EU, rules on the identification of sheep and goats were reviewed and reinforced
after the outbreak of foot-and-mouth disease (FMD) in 2001. The system, which was
adopted in December 2003 and entered into force in July 2005, was based on the
principle of individual traceability and included animal identification, maintaining an up-
to-date register on each holding; a movement document for each movement of groups
of animals; and a central register of all holdings or computer database at a national
level.
Following a report from the European Commission, electronic identification has become
obligatory, although the degree of implementation across member states is unclear.
In the UK, for example, electronic tagging for all animals born after 31 December 2009
is required as follows:
 For breeding sheep, or any sheep intended to be kept beyond 12 months of age,
two identifiers are required, one of which must be electronic and both must have
the same number.
 For sheep intended for slaughter under 12 months of age, only one tag is required
which can be electronic or non-electronic, with only the flock number shown
visually.
 Recording of individual animal codes during movements (individual tracking) is
required from 1 January 2011 for all animals born after 31 December 2009, and
from 1 January 2012 for all animals.
USA
In the USA, sheep identification is driven largely by the scrapie control program.
However, in early 2010 USDA announced a new, flexible framework for animal disease
traceability in the United States. The program:
 Only applies to animals moved interstate;
 Is administered by the States and Tribal Nations to provide more flexibility;
 Provides a number of options for identification, including electronic implants, ear
tags and tattoos; and
 Includes requirements for various travel documents and records.
Page 23 of 76
Canada
The Canadian Sheep Identification Program is a traceback system that began in 2004.
National legislation now requires livestock industries to mandate traceability, using
radio-frequency identification tags, for the purposes of disease control.
Key timeline events are:
 From 1 Jan 2012, all sheep producers must use an RFID CSIP tag (current
minimum cost $1.65 – the Allflex RFID tag or the Shearwell RFID tag) and the
appropriate applicator. An incentive is available to reimburse CSIP RFID tags for
all lambs born after 1 December 2010.
 After 31 Dec 2012 visual tags will no longer be accepted at sales, abattoirs or by
the Canadian Food Inspection Agency (CFIA) for shipping, transfer or sale of
sheep in Canada.
2.6 SWOT of present value chain and value of individual animal information
(IAI)
The following SWOT is a summary and distillation of discussions with a number of
stakeholders. Respondents were asked to consider IAI in the context of improving value
chain efficiency. This assumption does not necessarily imply that EID or even IAI is
inevitable.
Strengths of IAI to improve value chain efficiency

 A number of sectors see IAI as inevitable;
 Many components of the system exist;
 Market access and biosecurity will drive IAI; and
 There will be cost savings / benefits for processors and producers if fully
implemented.
Weaknesses of IAI systems

 The costs of tags and associated hardware are seen to be too high compared with
the possible benefits, particularly for farmers;
 Saleyard systems are not yet conducive to efficient RFID data transfer;
 Many farmers do not presently capture or utilise mob or individual data nor do they
have a desire to use such data;
 Mob-based identification has to be functional first, followed later by IAI;
 Mandatory IAI may deter implementation, but may be necessary for whole-of-
industry benefits; and
 Systems need to be integrated along the value chain before significant industry
adoption.
Opportunities for IAI to improve value chain efficiency

 With traceability from farm to consumer, markets may be maintained or expanded
in the future;
Page 24 of 76
 IAI could allow more product branding and price premiums for quality product;
 IAI allows feedback on carcase quality parameters to producers including studs,
assisting with breeding and management;
 IAI provides the opportunity for producers to be paid on a direct proportion of the
retail / wholesale value of each lamb;
 Producers can more accurately supply lamb to markets with different specifications
and predicted product knowledge will empower growers;
 IAI will increase efficiency and rigour of quality assurance schemes and biosecurity
programs including emergency and endemic animal disease management and
control;
 IAI will increase opportunities to manage lambs and carcasses at farm and
processor level to increase sale and processor efficiency as lambs can have highly
variable specifications;
 Producers can manage lambs better when responding to drought, changed market
conditions etc; and
 Producers and processors can benchmark their product across the whole of the
industry.
Threats to using IAI

 Strong and variable opinions in industry and government on the value of IAI (from
an EID perspective) are hampering a consensus on the value of IAI in its own right
(electronic or otherwise);
 Software systems are complicated, making it difficult to merge data sets;
 The culture of most lamb producers is not favourable to IAI and in many cases
even to mob feedback;
 Non-specialist and / or small lamb producers (less than 1,000 sheep) may receive
little benefit from IAI and mob based feedback may be adequate for now;
 There will be farmer resistance if Government intervenes too strongly (e.g.
regulation);
 Even if more information on lambs or carcasses is available there will be no impact
unless benefits are well defined and communicated; and
 For some participants there will be negligible benefits.
3. Stakeholder perspectives and potential contributions

This section identifies the various stakeholders in sheepmeat RD&E and attempts to
understand their perspectives and capacity to contribute to the national program.
Summaries are presented below, with greater detail provided in Appendix 2.
Page 25 of 76
3.1 Funding bodies

Meat & Livestock Australia
MLA is the key provider of RD&E funding through producer levies, matching
Government R & D contributions, voluntary contributions and through funds provided
through processors and livestock export industry bodies. Levies in 2010 were 2% of
sale price with a maximum of $1.50 for a lamb and $0.20 for a sheep. In 2009-10 lamb
and sheep levies totalled $31m and the R&D component attracted matching Federal
funds.
Australian Meat Processor Corporation

The Australian Meat Processor Corporation (AMPC) aims to maximise the long term
efficiency, financial viability and sustainability of the Australian red meat processing
industry. Policy for the industry is set by the Australian Meat Industry Council (AMIC).
AMPC spent $4m on sheep and lamb research in 2009-10. Funds are raised by levies
(sheep $0.15 /head, lambs $0.16 /head at processor) and R&D investments are
matched by the Federal Government. AMPC has previously been involved in relevant
projects such as with NLIS and national traceability. For further detail see ‘Appendix 2:
Further information on R&D funders and providers’ and AMPC (2010).
AMPC sees benefits of IAI and some key individual processors have a commitment to
adopting it in the abattoir and providing information back to producers. Nevertheless,
views vary within AMPC and the processing industry on the value of individual- versus
mob-based identification and certainly with respect to whether IAI should be mandatory.
LiveCorp
LiveCorp is a provider of R&D, marketing, training and communication services to the
Australian livestock export industry. Levies are collected on each sheep sold (see MLA
above).
LiveCorp, perhaps until recently, would have had little interest in investing in IAI.
However the recent ‘Independent Review of Australia’s Livestock Export Trade’ (Farmer
2011), the outcomes of which have been supported by the Government, includes a
recommendation (No. 8): ‘…that the Australian Government should work with the states
and territories and industry to implement individual identification of all sheep and goats
as soon as practicable’. This situation may influence LiveCorp and the livestock export
industry to view favourably investments into relevant IAI RD&E.
3.2 State agencies

State agencies all support the need for improved value chain efficiency and for mobs of
sheep (at least) to be identified. DPI Victoria is committed to the implementation of EID
for sheep and lambs and Qld DEEDI regards it as inevitable. The other states support
research that improves value chain efficiency and the need for more information to flow
seamlessly up and down the value chain. This has an influence on their commitment to
the types of RD&E activities proposed and their willingness to contribute staff and
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resources. Many state agencies, especially Victoria and NSW who are ‘Major’ providers
to the sheep industry, have already been very active in relevant RD&E.
The National Sheepmeat RD&E Strategy (PISC 2010a) categorises state agencies as
either ‘Major’, ‘Support’ or ‘Link’, as shown in Table 1. This table is adapted from Tables
3.1 and 3.2 in PISC (2010b).
Table 1 – Sheepmeat production RD&E priorities in state agencies
State agency Intended role FTE capacity FTE capacity Comments on value
in sheepmeat in sheepmeat in areas chain efficiency (VCE)
RD&E (2009) related to capability
value chain
efficiency 1
Primary Industries Research Support 21.7 21.1 Major capability is in

South Australia productivity rather
than VCE, but is
doing VCE research
Department of Food and Support 30.5 27.8 Major capability is in
Agriculture Western Australia productivity rather
than VCE, but is
doing VCE research
Department of Primary Major 53.6 30.2 Includes staff
Industries Victoria working on IAI,
production systems
and with processors
Tasmanian Institute of Link 4.9 2.6 Relatively limited
Agricultural Research capability and
resources. Focus is
on traceability
Department of Employment, Link 1.5 1.4 Relatively limited
Economic Development and capability and
Innovation Queensland resources. Focus is
on traceability
Department of Primary Major 50.5 33.3 Includes Meat
Industries NSW Quality group,
product development
staff, extension
officers and vets
Total 162.7 116.4
1
Staff nominally allocated to strategic imperatives 1, 3, 4, 5 and 6 (PISC 2010b), which still
cover a range of very general areas.
It is noted that the FTE capacities presented above are likely to have changed since
2009, although the relativities between agencies are likely to be the same.
While all of the state agencies were contacted, the focus of consultation for this plan
has been on the Major partners (NSW and Victoria). Support and Link partners have
expressed a keen desire to continue to work in the field but have generally been either
unable or unwilling to commit specific resources (FTEs, cash or in-kind), pending a
clearer understanding of the industry's priorities and funding base.
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DPI Victoria
With NSW DPI, DPI Victoria is one of two main agencies for the delivery of sheepmeat
RD&E. DPI Vic makes a clear distinction between supply-chain and value-chain
approaches and places a strong emphasis on the development of the latter by the lamb
industry (see Appendix 2).
DPI Victoria is developing an integrated series of activities to serve lamb industry
development, delivered by Farm Services Victoria (the delivery arm), Future Farming
Systems Research and Biosciences Research. These programs span all aspects of the
lamb value chain from genetics, nutrition and management to information systems and
economics.
The DPI lamb program will span the whole of industry, from producers (using focus
farms and the Bestwool / Bestlamb producer network), through collaborating processors
to retailers. A strong State commitment to sheep EID underpins the program. DPI
already has several focus farm pilot programs involving lamb and reproductive
production systems implementing EID tags, infrastructure and software.
Infrastructure developments to the value of $1.28m have been undertaken during
2010/11, with a further $2.05m requested in 2011/12 for an animal house with imaging
and other capability at Hamilton. Facilities have been consolidated to a Centre of
Excellence in Hamilton with strategic research also being at Bundoora and Attwood.
The staffing budget for has been increased by $3.3m over three years then $1.0m pa
ongoing, with emphasis on accelerating adoption of new technology in farm systems
(35%), improving the exchange of information through the value chain (10%),
developing targeted technology to increase productivity and lamb supply (35%) and
building a leading lamb RD&E capability to meet national obligations and attract
investment (20%).
NSW DPI
The vision of NSW DPI is that producers should be paid a direct proportion of the retail /
wholesale value of each lamb and that the benefits of a more efficient value chain need
to be equitable. NSW DPI works with a range of processors to develop ways to
measure carcase properties and provide better information to producers. See Appendix
2 for further information.
NSW DPI is prepared to include a number of staff, including research and development
officers, in new value chain projects. New industry funding would allow project staff to
work with a number of NSW processors, representative of both the domestic and export
markets. NSW DPI maintains an extensive network of livestock officers (sheep), district
agronomists and funds staff who work directly with processors. At least one large
processor has offered to contribute to a new RD&E program.
With improved animal health feedback from processors, NSW DPI and the Livestock
Health and Pest Authority (LHPA) veterinarians as well as animal health diagnostic
laboratories such as EMAI, Camden, will be involved in new programs to reduce the
incidence of downgrading and condemnation of carcasses. Key infrastructure is at the
Centre for Red Meat and Sheep Developmentat Cowra. NSW DPI may have access to
some cash to help leverage projects that are predominantly funded by MLA.
Page 28 of 76
PIRSA / SARDI
PIRSA is a Support agency to the Sheepmeat RD&E plan. It has recently completed a
major project analysing the meat value chain and consumer / market requirements (the
National Lamb Value Chain Project – report pending). PIRSA seeks to continue its
focus on understanding consumer / market needs and relating these back to industry.
PIRSA will play its role as a Support agency to the industry but does not have firm
commitments (staff, cash) to IAI for sheep, pending clarification of industry priorities,
projects and funding.
South Australia is in the unique position of having access to the Sheep Industry Fund
(SIF), a ‘voluntary’ levy on sheep producers that raises approximately $2m per annum
and which can be used for the development of the SA sheep industry. While its
application is currently the subject of review, some money for SA-specific activities
relating to IAI may be available.
DAFWA
The ‘Departmental Plan to Support Livestock Industry Development: 2009-12’ (DAFWA
2009) does not specifically refer to individual animal measurement, nor to electronic
identification of sheep, but it does list individual animal measurement as a priority. This
Plan also refers to the fact that DAFWA will lead national planning for wool RD&E with
AWI and ‘Support’ the National Sheepmeat RD&E plan.
DAFWA has not developed a strategic position on its investment in the area of
individual animal ID to improve value chain efficiency. Once this is in place the agency
will be seeking co-investment from MLA and its commercial partners with its current
focus on biosecurity through its support for NLIS. DAFWA aspires to investigate new
opportunities to use electronic tags and extend the return on the existing investment in
tags and readers, plus develop management and analysis software to use the data
collected.
WA's main issues are supply and the consistency of supply. The one major abattoir
uses Viascan to assess estimated meat yield.
DPIPWE
As a very small lamb-producing state, Tasmania does not have firm commitments (staff,
cash) to IAI for sheep, pending clarification of industry priorities, projects and funding.
DPIPWE is also in a period of transition as it progressively moves its research capacity
to the Tasmanian Institute of Agricultural Research (TIAR).
DPIPWE supports the concept of IAI / EID for the sheep industry, especially from a
biosecurity / stock theft point of view but, like several other agencies, is wary of its
imposition on industry. A national approach is favoured and one which has equivalence
between sheep and cattle so as to remove duplication of infrastructure and direct costs.
DEEDI
DEEDI is listed for only 1.5 FTE for the Sheepmeat strategy but with vacancies across
its sheep program has less than this capability available at present. DEEDI will ‘Link’
with the National Sheepmeat RD&E Strategy. It is unlikely to provide cash. In the future
Page 29 of 76
it seeks to support any major lamb supply chain project, mainly in extension. It is
anticipated DEEDI would link in with any NSW DPI Northern D&E programs.
DEEDI considers RFID to be inevitable with food safety / quality assurance / biosecurity
the primary role followed by provision of feedback on carcase parameters. It accepts
that mob-based identification has to be functional first before there are any moves to
IAI.
3.3 Universities
Key universities operating in this field tend to be aligned with the Sheep CRC (Murdoch,
University of New England (UNE)) and are considered under the CRC below.
The University of Melbourne

The University of Melbourne, through the Mackinnon Project at the Faculty of Veterinary
Science, has expertise in farm production systems, including pastures, health, genetics
and in particular the use of data to drive decision making. There are four senior staff
and three Masters / PhD students in the unit. The Mackinnon Project is available to
deliver RD&E if funding is made available.
Charles Sturt University

CSU, in particular the School of Animal and Veterinary Sciences and especially the
Morley Unit, has expertise in animal production and health. CSU has current research
on live sheep exports and with local sheep abattoirs. It would participate projects in the
sheep value chain including the development regional animal health programs based
on data fed back from abattoirs. PhD students would be available depending on
funding.
3.4 Sheep CRC

Participants in the Cooperative Research Centre for Sheep Industry Innovation (Sheep
CRC) include a range of RD&E providers such as Murdoch University, UNE, NSW DPI,
DPI Victoria, SARDI and DAFWA plus commercial providers. The CRC receives
Commonwealth and industry contributions.
The aim of the CRC is to turn Australia's sheep innovations into successful new
products, services and technologies, and make the Australian sheep industry more
efficient, productive and competitive. The Sheep CRC has conducted much of the
research on precision sheep management which is where IAI may have a significant
role (Rowe 2010).
For the purposes of this RD&E plan, we assume that the Sheep CRC will not be
extended past 2014 and thus will not be available to undertake key programs from this
proposed RD&E plan after this time.
With respect to the lamb and sheep value chain and IAI, CRC priorities are:
 Fully integrated feedback systems for improved management of the supply chain
and lamb quality. This would include automatic weighing systems to aid inventory
management;
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 Better use of genetics to improve product quality which would include known
genetics and genomics of individuals. This requires IAI. This information could then
could be incorporated into MSA grading;
 Animal and product tracking and ‘online’ bidding for the (predicted) supply. The
animals could have predicted tenderness, fat levels, lean meat yield and growth
rate at sale point; and
 Demonstrations of supply chains that are fully integrated.
Specific current programs relevant to supply chain efficiency and IAI are the meat
quality program (3) including sub-program 3.3 on Lean Meat Yield & Supply Chains.
Present projects include:
 Assessment of technologies for measuring lean meat yield including the Hennessy
probe, the Carometec fat-o-meter probe and further assessment of ultrasound;
 Using data from benchmarking activities with early adopter processors to develop
industry-relevant descriptive statistics on lean meat yield;
 Developing a skin scoring system that will consider carcase hygiene and skin value
in relation to soiling. This project will develop an objective language for industry to
use in communication and value based trading systems along the supply chain;
 Training in the use of EID for sheep management and breeding; and
 The Lamb Supply Chain Group. This group works with supply chains, processors,
supermarkets and software and hardware providers to increase the accuracy of fat
measurement and explore other carcase measurement such as lean meat yield
and feedback systems that will enhance supply chain efficiency.
3.5 Commercial operators

Identification system suppliers
The commercial sector developing and providing software and hardware (e.g. Allflex
and Shearwell) for EID in livestock is very active. Market failure cannot be said to exist.
Software providers have tended to commence operations by targeting a specific
segment of the industry and then working their way up or down the value chain. For
example, Practical Systems was initially farm-oriented, Sapien supply-oriented,
Livestock Exchange saleyard-oriented and Cedar Creek processor-oriented. Over time
these companies have sought to provide whole-of-industry solutions so competition is
strong.
Discussions indicate that all providers are very keen to cooperate to progress the
implementation of EID for the sheep industry and to develop their businesses. In fact a
common comment was the view that the sheep industry is potentially a more important
market and would reap greater benefits from EID than cattle. However, any such
investment by software or hardware suppliers would understandably be towards
assisting in the evaluation of systems and processes, rather than the provision of
research for whole-of-industry benefits.
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A further consistent comment was that software development costs are small compared
to those for infrastructure / hardware and that the industry would benefit by having a
consistent system of how data should be handled (format, length etc).
Saleyard operators
In a press release of 5 September 2011, the Australian Livestock and Property Agents
Association (ALPA) indicated that NLIS for sheep must be rolled out in a nationally-
coordinated manner for it to be effective. It indicated that the costs to saleyards of
installing electronic sheep tracking systems in saleyards would be substantial and that
the cost would need to be recouped ‘from somewhere’. The release also points out that
‘the current visual tag system (is) failing because producers (are) not tagging their
sheep or filling out the National Vendor Declaration form correctly’, and that an
electronic system would not fix this problem.
The Livestock Saleyards Association of Victoria is currently involved with 12 saleyard
complexes piloting the potential introduction of sheep RFID tags to create a whole-of-
chain traceability system.
Processors
As noted in Section 3.1, the commitment of lamb and sheep processors to IAI varies
enormously. Some are very publicly vocal in their support, while others want to be
directly involved in R&D but wish to do so under commercial-in-confidence
arrangements (which we are unable to document for obvious reasons). Others are quite
content with the status quo and only see costs to producers from IAI without any
substantial benefit to producers or themselves.
In general, there is a lack of commitment and investment by many in the processing
industry in new tools and technology such as hook tracking and carcase scanning.
The review team has been in touch with abattoirs in NSW, WA and Victoria. It is evident
that the strong relationships between state agencies and some processors will be
important in the roll-out of any RD&E plan. Many processors are keen to continue to be
involved and contribute to further value chain efficiency R&D. Some benefits of IAI at
the processor level have been documented in Section 2.3.
4. Vision
The vision for this plan is a streamlined lamb value chain along which information on
animal management, genetics, heath status, carcase yield and product quality flows
freely in both directions, increasing the overall productivity and efficiency of lamb
production, as well as delivering other potential benefits such as improved market
access, increased biosecurity, reduced costs and increased consumer satisfaction and
loyalty.
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Adding more substance to the vision…

The sheep meat industry of the 1980s/90s could have been described as supplying a
mob-based commodity. Following the transformations of the last 20 years, it is probably
best characterised today as supplying a mob-based product. Within the next 10 years it
is quite plausible that the Australian sheep industry will have moved to an individual
animal-based product that is even more driven by customer and consumer needs.
Essentially, producers and processors will be paid for what consumers prefer.
So what might this look like in practice? Appendix 3 gives an example scenario of a
segment of the industry in 2020. The scenario shows that by 2020 the lamb and
sheepmeat industry could be characterised by the following:
 All sheep and lambs carry individual electronic tags.
 The range of measurements taken on animals far exceeds that of today.
 Specifications for sheep meat products, especially lamb, are more precise and are
based on consumer (e.g. eating quality) and processor (e.g. saleable meat yield)
requirements. Producers and processors are paid on these factors, not just weight.
Systems are in place to measure and to pay on lean meat yield.
 Such requirements are selected for in on-farm breeding programs, using
molecular-enhanced breeding values, and managed on individual animals not
mobs.
 There will be far greater sharing of data up and down the pipeline due to:
 rapid changes in information technology capability;
 a recognition that the competition is not within the Australian lamb value chain
but external, that is from other meat products within Australia and overseas;
 the availability of improved genetic selection;
 the ability to measure (or predict) key processor / consumer traits on live
animals;
 the need for greater transparency and traceability to meet government and
consumer requirements in relation to biosecurity and origin of product;
 standardisation of trait definitions and formats for data transfer; and
 the existence of an industry-owned central database that holds animal
production data, animal health data, carcase data including predicted
processing and eating quality data, specific processing data such as saleable
meat yield and consumer feedback. This database could be used for industry
benchmarking, to enhance or maintain market access and to respond to
emergency disease incursions.
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5. Gap analysis
5.1 What is needed to reach the vision?

Some producers and processors collect large amounts of data on individual animals (or
on a mob basis), while others collect very little. Much of this data is not analysed or
interpreted rigorously to enhance decision making for productivity, efficiency or product
improvement and it is rarely transferred freely along the value chain in either direction.
The variety of data becoming available (e.g. breeding values, carcase traits, product
quality) is changing quite quickly and is expected to continue to do so in coming years.
Hardware and software to capture and analyse such data are commercially available.
However, there are a number of challenges facing improved flows of information along
the lamb value chain, including increased use of IAI, such as:
 There is no agreed vision or strategy as to how this may be done;
 There is no clear understanding of how value is added at various stages of the
chain – who pays and who benefits;
 The value proposition of capturing and analysing animal information, either on the
mob or on individual animals, is not evident for a significant proportion of the
industry;
 There is no standardised / agreed system for transferring data up and down the
value chain. Data tends to become protected information within one sector or
organisation or business unit of the chain;
 There is industry experience that it is difficult to get various pieces of individual
measuring equipment to ‘talk’ to each other;
 There is fear that a substantial investment in technology will be wasted because
the technology is superseded or is made redundant if industry introduces some
form of standardisation;
 There is no mechanism by which the results from the significant body of RD&E
work already done (and continuing to be done) can be readily shared and utilised
by all participants; and
 There are limited short-term incentives to share information along the chain – often
there is a fear of doing such and trust between stakeholders is an issue.
Table 2 provides an overview of current information, potential new information, gaps in
the provision or application of that information and commentary on who could fill those
gaps, including via this plan.
Note that some of the potential new information will be more valuable if on an individual
basis (e.g. animal health status, hot carcase weight (HCW) or lean meat yield (LMY)),
while other data will still be very valuable if on a mob or group basis (e.g. pedigree,
NVD, consumer feedback on a branded product).
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Table 2 – Gap analysis
Sector Information available Information potentially What value could Where are the gaps?
now or easy to obtain available in the future this new information (*see RD&E plan below)
have?
Seedstock  Live weight  ASBVs for new  Seedstock 1. ASBVs for new
 ASBVs for traits such as producers traits (in part
carcase, Omega-3 fatty breed for covered by other
maternal traits, acids, consumer traits programs)
reproduction, tenderness, IM  Studs 2. Enhanced
fibre fat, LMY etc potentially get electronic data
 Breed,  Better feedback paid for what capture (covered
pedigree, age from processors they produce by NLIS and
etc  Enhanced  Commercial commercial
 Growth rates, electronic data producers get operators)
nutritional data, capture and preferred rams 3. Standardised
health status interpretation  Feedback on formats for data -
 (Can be on mob  Estimated LMY commercial national dBase
or individual on live animals lambs and sector dBase*
basis) slaughtered to 4. National genetic
seedstock benchmarking
increases database*
values all
round
Commercial  Live weight  Full pedigree  Producers get 5. Understanding the
producer  Fat score  Lamb growth rate paid for what benefits*
 Breed, – lifetime and pre- they produce 6. Understanding
sometimes slaughter  Processors can how the system
pedigree  Environmental buy preferred works
 Numbers and and animal lambs commercially*
expected sale welfare  Improved 7. Efficient mob-
date  Better feedback genetic based feedback
 PIC registration from processors selection/cullin from processor*
and number  Estimated LMY g 8. Efficient individual
 MSA animal feedback
accreditation from processor*
Farm to  NVD on paper  Electronic NVD  Reduced 9. More robust and
sale  Financial – fax  Direct and transaction accurate NLIS
(saleyard or and mail electronic transfer costs for buyer (covered by NLIS)
direct) of animal and seller
movement  Enhanced
traceability and
market access
 Direct-to-farm
financial
management
programs
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have?
Processor  Supplier  Estimated lean  Can pay 10. Measurement or

 Carcase weight meat yield, eye producer on predictors of LMY*
(HCW + chilled muscle depth LMY / meat 11. Predictors of
carcase weight (EMD), meat eating quality meat eating
(CCW), eating quality  Can have quality*
sometimes fat) predictors, preferred 12. Feedback
 If condemned pedigree / breed, suppliers systems to
or retained and animal health  Processor can producers on
trimmed status buy on LMY, animal
 Vendor  National supply eating quality, performance and
inventory breed, other health status*
 MSA
 All electronically traits etc 13. Systems to
transferred  Better manage regional
opportunity for animal health
branding and information*
selling on 14. Systems to
specifics convert data to
(breed, welfare information for
etc) producers to
 Inventory inform decisions
management (largely covered
aids plant by commercial
efficiencies e.g. operators)
chiller space, 15. Systems to
yard space, provide
labour, robotics processors with
 Producer and information for
regional decisions
improvements (covered by
in animal commercial
health operators)
Wholesaler  May get some  Consumer to  Greater brand 16. Ability to trace
/ retailer / ad hoc producer loyalty specific carcases /
exporter feedback from feedback  Allows cuts*
(including next sector. No captured improvement
processors industry capture  Provenance
that export) of feedback
 Point of
 MSA difference in
product
Consumer  Maybe MSA  Feedback  Greater brand 17. Mechanisms to
 Lamb or sheep provided loyalty obtain supplier
 Product or  Can source lamb  Consumer gets information*
supplier brand with specific consistent lamb 18. Mechanisms to
attributes experience provide feedback
 Additional  Provenance to supplier*
provenance
information
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have?
Whole of  Many ‘isolated’ Clear benefits  Integrated 19. Integrated

industry reviews, identified for each value chain demonstrations of
demonstrations sector with enhanced value*
and economic  Identification of information 20. National
analyses value added flows extension plan*
along pipeline  Co-operative 21. Lack of an IAI
and areas for value chain forum to share
intervention.  Collaboration latest information
 Segmentation of and and results
the market partnerships between industry
depending on across the sectors and
benefits value chain service providers
 Degrees of (including
specialisation hardware &
creates software)*
production
efficiencies
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5.2 Links and associated activities

The plan presented below is inextricably linked into, and in part dependent upon, other
RD&E activities within the lamb value chain such as:
 Enhancements to current animal identification systems (NLIS (Sheep & Goats)
working groups at national and state level);
 The work of MLA and others on Livestock Data Link;
 Collective work (MLA, Sheep Genetics, Sheep CRC etc) on improvements to
ASBVs and a better understanding of (and prediction for) meat eating quality etc;
 Work being undertaken by private and public organisations to improve and
demonstrate the role of RFID in the sheep industry; and
 Policy positions taken by Government in conjunction with the lamb and sheep meat
industry and associated working groups. For example, PIMC has formed a working
group to explore the feasibility of electronic identification devices for sheep and
goats, including looking at technical and commercial barriers to its uptake. The
details of the working group will be determined by PISC.
6. Lamb supply chain RD&E Plan
6.1 Outcome areas

Three key outcome areas form the basis of this RD&E plan. They are:
1. Collect and transform data into information of value to participants;
2. Improve sharing of information along the value chain; and
3. Demonstrate, communicate and extend the benefits of improved information flow.
Each of these contributes to the overarching objectives of producing the right product
for the market, increasing market access and food security and managing compliance.
For each of the key outcomes, the plan provides a rationale for the investment, outputs
sought, linkages to other RD&E programs, early thoughts on the level of funding that
may be required, specific projects to achieve the outcome, KPIs, timeframes, likelihood
of success (risks) and potential partners or means to attract partners.
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An important note on funding

The indicative funding requirements provided below are based upon consultation with
the Major state agencies (NSW and Victoria) about the expected cost of projects in the
respective project areas. However, budget figures must be regarded as approximate at
this stage. Budgets cannot be finalised until specific project proposals are received and
decisions made on, for example, whether projects are conducted in just one state or
across several.
In any case, decisions on funding will naturally be based on more detailed, project-
specific benefit/costs analyses than are possible here. The actual investments made
and the split of funding between partners will depend on the BCA and who gains the
benefits. If the overall plan is supported by the RMCiC then, during implementation,
budget totals and allocations between partners will need to be flexible.
Outcome 1: Collect and transform data into information of value to participants

Rationale:
Data is of no value unless it becomes collated information which can be interpreted to
improve knowledge and understanding to drive decisions. Much of the data currently
collected on farm, in abattoirs and by retailers is not used and therefore has no value.
Collated / aggregated information has a value and should be demanded by chain
participants.
There are commercial providers offering hardware and software systems for the
collection, interpretation and use of data by producers, in abattoirs and by retailers.
Thus, there is no apparent market failure in these outcome areas and no argument for
industry RD&E funding. However, there is a limit in linking of systems even within an
abattoir. There is also a failure to use the information in the market as it resides in
individual databases.
The development of expert systems to enhance the use of individual animal information
for producers is a less clear-cut commercial proposition, especially in respect to the use
of animal health data for regional animal health surveillance and intervention programs.
Outputs:
 System(s) to allow interpretation and use of data by producers and processors
 System(s) to collect and communicate animal health and performance to
specifications data from abattoirs (AW)
Linkages:
 Sheep CRC3, animal genetics and genomics strategies – RD&E on measurement
of new parameters on live animals (e.g. ASBVs for eating quality, LMY etc)
3
As noted in section 3.4 it is assumed that the Sheep CRC will not be extended past
2014 and thus will not be available to undertake key programs from this proposed
RD&E plan after this time.
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 Sheep CRC – RD&E on better tools to measure carcase parameters such as LMY,
eating quality etc
 NLIS / Livestock Data Link (LDL) – reporting of traceability, performance to
specifications, carcase value and animal health data
 National Animal Health Information System (NAHIS, through Animal Health
Australia) – collection and reporting of national animal health data
 Commercial parties – providing hardware and software systems for the collection,
interpretation and use of data by producers, abattoirs and retailers
Funding:
 Indicative $5.8-7.3m over 4 years
Funding sources:
 MLA, AMPC, State agencies, processors, commercial sector
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Projects KPIs Comments RD&E providers Indicative $
1.1 Develop technology for real-time Accurate and cost effective  2012-15  Vic, NSW  MLA $500k
assessment of meat quality attributes and meat systems being used  High priority DPI interest  Agencies
yield in the live animal (leverage off beef work if  Links to similar project in beef, but  Private and others
successful e.g. high intensity scanning / may be more technically difficult companies $1m
cameras for scoring etc) because of wool – start with
feasibility study
1.2 Develop and/or demonstrate better Accurate and cost-effective  2012-15  Vic, NSW  MLA $1-2m
technologies for in-abattoir measurement of systems being used  High priority DPI interest  AMPC
sheep meat and carcases based on  Already work in the demonstration  AMPC  Agencies
specification, meat yield and meat quality area  Processors and others
attributes, especially the linkages between NLIS $1-1.5m
 Links to similar project in beef
and carcase tags
1.3 Develop expert systems that integrate Availability of interpretive models  2012-15  Vic, NSW  MLA $600k
information to assist producers to interpret and for producer use  High priority DPI interest  Agencies
utilise data collected on farm and via processors  Will incorporate new tools emerging  Other state and others
as a result of projects 1.1 and 1.2 from research work (ASBVs for agencies $300k
eating quality, improved carcase  Software
measures/ predictors) providers
 Merging of data still a problem; need
simple applications
 LDL is moving this way
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Projects KPIs Comments RD&E providers Indicative $
1.4 Develop systems to collect animal health Systems in place to collect,  2012-15  Vic, NSW  MLA $1m
data and interpret and transfer this data to tabulate and transfer and  High priority DPI interest  Agencies
producers and animal health / biosecurity interpret data for producers and  Systems to collect animal health  Other state and others
agencies processors (e.g. ‘HealthBoss’ SG information in abattoirs exist and this agencies $500k
and skins information) information can be transferred back  Software
to producers and animal health providers
authorities, but often it is not
 Systems to enhance the ease of
capture on a mob basis, transfer
information to producers and then
provide guidance as to what
producers should do are required
 LDL is moving this way and private
software providers are also engaged
 Legal issues will need to be
addressed (e.g. by Sheep / Goat
NLIS Working Group)
 Linked to Victorian bobby calf
process
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Outcome 2: Improve sharing of information along the value chain

Rationale:
Information has value not only at the point of collection but at other points upstream and
downstream in the value chain. Information-sharing systems are not yet fully integrated.
There are opportunities to reduce value chain costs and improve performance in
meeting consumer demand, although the critical points along the chain need to be
identified first and the benefit/cost of interventions estimated as such information is not
currently available.
Healthy competition between commercial hardware and software providers is highly
desirable but value will be lost if there is a lack standardisation and therefore the
capacity for data to be exchanged.
Outputs:
 Understanding of the ‘what’s-in-it-for-me’ for individual participants of interventions
to improve information exchange, incorporating both economic and cultural/social
factors
 Standardised definitions and rules to facilitate information exchange along the
chain
 Technology(ies) to allow retailers/consumers to establish the provenance (source,
environmental and welfare credentials) of a lamb product
Linkages:
 NLIS / Livestock Data Link and other providers
 Sheep Genetics (LAMBPLAN and MERINOSELECT)
 NLRS
 Commercial parties – providing hardware and software systems for the collection,
interpretation and use of data by producers, abattoirs and retailers
Funding:
 Indicative $3.1m over 4 years
Funding sources:
 MLA, AMPC, State agencies, hardware and software providers, processors
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Projects KPIs Comments RD&E Indicative $

providers
2.1 Analyse Situation  2012-14  Vic DPI  MLA

the lamb value analysis of  High priority  Other $200k
chain and case studies in  Several studies on specific agencie  AMPC
points for 1.2 to examples of this conducted. Need s  Agencies
value-add and benchmark to draw conclusions together  Private $400k
intervention; current, then provider
 Should include market access /
quantify compare to s
growth / maintenance opportunities
benefits of situation
tracking analysis in 5  Some being done by the CIS
animals from years when group in MLA
farm to system is in  There should hopefully be a
processing to place number of critical intervention
retail at each points identified at farm and
point in the processor levels
chain
2.2 Investigate Shared  2012-15  Vic DPI  MLA
social, understanding  Medium priority  Other $100k
commercial of drivers and  Some information on this already agencie  Agencies
and financial barriers to e.g. MSA study on EID in Vic s $150k
opportunities allow greater  Private (one
 Vic DPI and MLA have two PhD
and barriers to uptake provider PhD)
EOIs on offer in this area
information s
collection,
sharing and
use throughout
the value chain
2.3 Develop Incorporation  2012-14  State  MLA
and extend of standards  High priority agencie $400k
national into software  Previous work in this area by s  Agencies
standards for applications CSIRO in AWI / CRC project has  Private $60k
information and not been taken up. Initially provider
exchange specification undertake modest review of why s
along the databases (eg first project failed (barriers) and
pipeline – standardisation build on that (Software?
language, of tag font) Language? Complexity?)
formats
 Must aim to reduce rather than
increase complexity/admin time
 Recent project completed to link
SG and NLIS databases
 There is a Standards Committee
 Needs policy support
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providers
2.4 Develop Accurate and  2012-15 – but could leave until  Vic and  MLA
technology(ies) timely later once abattoir tracking NSW $1m
to allow traceback systems are in place to the boning DPI  AMPC
processors / system room, to determine if there is a  Other  Agencies
consumers to available market driver agencie $750k
establish the  Low/medium priority s
‘provenance’  Will enhance or maintain market  Private
(origin, at access to have systems in place, provider
property or but critical to do BCA before s
individual implementation – may only need to
animal level) be mob-based provenance
and credence
 Addresses key biosecurity needs
of sheepmeat
products  AMPC needs to be involved
 Private benefit, not industry benefit
– maybe outside public funded
research
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Outcome 3: Demonstrate, communicate and extend the benefits of improved

information flow
Rationale:
There is good evidence that a value chain approach will benefit the entire lamb industry
but more some than others. It will be imperative to segment the market and identify
benefits that can accrue to each and demonstrate these in convincing ways. A key
element of any change program is to ‘model the way’; that is, to show what can be
achieved. In the case of the lamb value chain, this means demonstrating how the parts
fit together in a technically and commercially feasible way.
There is a sound ‘market failure’ justification for RD&E activity in this area, because
single players have limited incentives to link all parts of the value chain. Where they do
have an incentive, it is driven by increasing profit at that point in the chain and not along
the chain as a whole. Producers (as individuals) have the least market power of all the
players and should seek to manage the development of an information-sharing system
so that they gain a share of the benefit from it.
Outputs:
 Establishment of a vehicle (a forum) by which value chain participants can
exchange information and ideas – acknowledging that there will be commercial
constraints to the information that is shared
 Demonstration and validation of integrated value chain(s) systems
 Delivery of extension and training programs
 Establishment of baseline data that can be used to monitor progress
Linkages:
 Numerous participants including AWI, CRC and State DPI advisory and training
providers and private Registered Training Organisations (RTOs) including those
that CRC has licensed
 MLA’s proposed demonstration sites for ASBVs
 Making More From Sheep and Producer Demonstration Sites
Funding:
 Indicative $4.6m over 4 years
Funding sources:
 MLA, State agencies, commercial operators
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providers
3.1 Establish a forum  Technical  2012-15  All  Component

for the exchange of forum  Medium/high agencies of program
information and established priority  Private management
improved across sectors  While several providers budget
communication with industry forums on NLIS etc  $20k per
between participants in involvement already exist there agency
the value chain is no avenue to
address industry
wide issues,
exchange of ideas
and results of
research across
sectors.
 Difficulty of
achieving desired
outcomes
understood – but
should be offer
open to all
 Need to cover
expected outputs
and reporting
mechanism
 NSW DPI is
organising smaller
rep group, as is Vic
DPI
 Link to 2.3
3.2 Design, implement,  Five systems  2013-15  Vic,  MLA $3.2m
demonstrate and in place  High priority NSW  Agencies
evaluate a number of  Some within-sector DPI $800k
integrated information systems in place, interest
systems; quantify but none fully  Other
costs and benefits of integrated agencies
these
 Can be linked to
SG’s ASBV
demonstration sites
and LDL
 NSW and Vic are
establishing, WA
and SA may wish
to contribute
 Engaging of
processors the key
and should be first
focus
 Will utilise more
sophisticated
linking of data
(follows 2.3 to
some extent)
Page 47 of 76

providers
3.3 Develop and  Producers  2012-14  Vic,  MLA $400k

implement a national understand the  Medium priority NSW  Agencies
extension / education genetics and  The Sheep CRC DPI $160k
program on lamb value management has an active interest
chain, linked to 3.2 but to improve program in this  Other
also including stand- conformance area, but the CRC agencies
alone modules (e.g. to is not a long term  RTOs
through Making More specifications provider
from Sheep)  Producers and  Vic DPI has an 8-
processors module business
understand development model
where IAI can for value chains
benefit them
 PIRSA has a value
 Market chains group
segmentation
 NSW DPI through
available
Sheep Connect /
Making More from
Sheep
 Engage service
providers and
agents
 Link to 3.1 and 3.2
3.4 Examine role of IAI  Reduction of  Timing TBC  State  TBC
in enhancing industry the  Medium priority agencies
logistics administrative  Need to involve  Saleyard
burden on the NLIS and LDL operators
pipeline (examining
electronic weigh bill
and NVD)
 LPA has already
endorsed this and
the PIMC RFID
Working Group is
examining this
 Link to 3.2
Page 48 of 76
6.2 Portfolio characteristics

The RD&E plan recommended by this report has a primary focus on development and
extension / education. As noted throughout this report, much of the pure research has
already been undertaken either by research agencies or by the private sector. The focus
of attention should now largely be on further developing the technology and the
infrastructure which supports it and demonstrating the technology to a broader range of
industry participants.
Notwithstanding the above point, the likelihood of a far greater utilisation of the technology
should not be over-estimated – due to the complexity of the issue and polarised views
across industry.
Summary of timeframes for delivery

Figure 6 provides an indication of the likely distribution of investment in project areas over
the life of this plan.
There are few if any specific dependencies between projects – any could be progressed
prior to completion of any other project. The timeframes are deliberately shaded to
indicate the most likely emphasis between projects in given years where decisions must
be made to prioritise investments. Thus, for example, 3.2 is likely to precede 3.3 because
the outcomes of demonstration chains will form part of the content of extension packages.
Figure 6 – Summary of timeframes for delivery of RD&E Plan
Outcome / Project 2012 2013 2014 2015
Outcome 1: Collect and transform data into information of value to participants

1.1 Real-time assessment of meat quality attributes and yield in the live animal
1.2 Carcase tracking and measurement systems to determine value in abattoirs
1.3 Expert systems to assist producers’ interpretation and utilisation of data
1.4 Systems to collect, transfer and interpret animal health data
Outcome 2: Improve sharing of information along the value chain

2.1 Analyse value chain and points for value-add and intervention and quantify benefits
2.2 Investigate opportunities and barriers to information collection, sharing and use
2.3 National standards for information exchange along the pipeline – language, formats
2.4 Technology to establish provenance of products
Outcome 3: Demonstrate and extend the benefits of improved information flow

3.1 Forum for the exchange of information and ideas between participants in the value chain
3.2 Integrated information systems
3.3 National extension / education program on lamb value chain
3.4 Role of IAI in enhancing industry logistics
Summary of indicative budget

The indicative budget for the program described in this plan is shown in Table 3.
As described above, this is very much a preliminary budget based primarily on the input of
NSW and Victoria Departments of Primary Industries. It requires much greater
development following tighter definition of projects including geographic coverage.
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Table 3 – Summary of indicative budget for RD&E Plan
Outcome/project Indicative $
Outcome 1: Data into information $5.8m

Outcome 2: Improve sharing of information $3.1m
Outcome 3: Demonstrate, communicate and extend the benefits $4.6m
Program management (see Governance) $0.4m
Total $13.9m
6.3 Links to other programs

The RD&E program described here has overlaps with and links to other programs
developed under the RMCiC and through other arrangements as described in Section 5
for each of the Outcome areas. No doubt there will be linkages into other strategic plans
either developed (e.g. Feedbase) or under development (e.g. Genetics / Genomics).
Communication between the governance body for this plan and other plans / activities
described in this report will need to be comprehensive so as to:
 Minimise duplication of work;
 Take advantages of opportunities for joint projects where the resources needed may
be similar (for example, where carcase traits are measured as part of a grazing
systems evaluation); and
 Minimise the opening of gaps in the overall sheepmeat portfolio (in which programs
assume that other programs are covering a specific investment area).
It is for these reasons that this Plan suggests an overarching governance group to
manage and monitor progress in this area (see Section 10).
6.4 Portfolio risks and risk management

Table 4 lists risks, and associated mitigation strategies, associated with this plan.
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Table 4 – Plan risks and mitigation
Risk Likelihood Mitigation strategy / Comments

without
mitigation
1. State agencies may not be Medium Clarify that this Plan does not
supportive of work that is seek to provide industry policy in
solely IAI relation to sheep ID
2. Agencies may not be prepared Low / Ensure agencies (via the PDT
to invest in identified projects Medium and RMCiC) are supportive of the
Plan prior to release (note: much
liaison has already been
undertaken with agencies in the
development of this plan)
3. AMPC may not support Medium / At the initial stages at least, this
because of confidentiality High plan should provide improved
issues with some processors options for those who wish to
participate rather than imposing a
national system for all
4. Mandatory electronic IAI may Medium Outside of the control of this Plan.
be imposed While such a policy decision will
have implications for this Plan
(particularly in relation to timing) it
should still be able to operate
effectively as it has been
developed with this possibility in
mind
5. Electronic tag costs and cost Low / This plan does not suggest
of obtaining data may Medium mandatory use of electronic IAI
outweigh benefits
6. Only large enterprises will Medium This plan does not suggest
realise benefits and rest of mandatory use of electronic IAI.
industry will not support In the early stages at least,
targeting of specific market
segments will be important
7. Other issues (e.g. drought, Low While other issues will regulate
animal welfare, regulations, speed of adoption, it is unlikely
major decline in lamb prices) that enhanced IAI will removed as
may become a priority for a priority for the reasons listed in
industry and improved IAI will this report
get lower priority
7. Economics
Economic evaluation, plan outcomes and analysis approach
Ex ante economic evaluation provides insight into the likely performance of Plan
investments and guides data collection to facilitate monitoring and ex post evaluation.
Economic evaluation was completed in a standard benefit cost framework (see CRRDC
Guidelines 2007) and a real discount rate of 7% was applied. Sensitivity analysis was
Page 51 of 76
completed on the percentage of the flock adopting research outcomes and receiving a
price premium – a major assumption driving the analysis.
The Lamb Supply Chain and Animal Information RD&E Plan will deliver three major
groups of industry outcome, i.e.:
1. Transformation of data into information valued by industry;
2. Improved sharing of information along the value chain; and
3. Demonstration, communication and extension of the benefits of improved
information flow.
To illustrate the benefits that might be generated from the Plan a case study approach
was adopted. Plan outcome number one4 was analysed and is expected to deliver a real
time assessment tool for processors. The assessment tool will measure meat quality
attributes and meat yield in the live animal and leverage off beef work already completed
(e.g. high intensity scanning / cameras for scoring etc.).
Costs incurred to realise economic benefits

To achieve this lamb industry outcome investment will be required by MLA, other co-
investors and industry. MLA and other co-investor costs are budgeted at $5.15 million
over four years and are shown in Table 5 below.
Table 5 – MLA and co-investor budget to deliver Outcome 1
2012-13 2013-14 2014-15 2015-16

1.1 Develop real-time assessment MLA 125,000 125,000 125,000 125,000
tool
Other co- 250,000 250,000 250,000 250,000
investors
1.2 Demonstrate tool in abattoir MLA 375,000 375,000 375,000 375,000
Other co- 312,500 312,500 312,500 312,500
investors
1.3 Develop expert systems for MLA 150,000 150,000 150,000 150,000
producers
Other co- 75,000 75,000 75,000 75,000
investors
Total 1,287,500 1,287,500 1,287,500 1,287,500
In addition to these direct Plan investment costs, cost will be incurred by lamb producers
to capture additional data and turn the resulting information into industry benefit. These
include costs of sire selection, labour and weighing costs to grade lambs and ensure they
meet processor specifications. A cost per lamb assessed of $1.50/head was deemed
reasonable following discussions with MLA (personal communication April 2012).
4
Note that only projects 1.1-1.3 were included in the analysis. The expected of outcome
1.4 (animal health information) provides a benefit that is more difficult to quantify and
stands apart from the other three.
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Benefit identification and estimation

Benefit types and industry impact associated with the Plan are summarised in Table 6. All
potential benefits are economic in nature. No social or environmental benefits have been
identified.
Table 6 – Plan benefits for industry
Benefit type Industry impact
Improved information delivering increased Additional sales at premium prices

productivity and efficiency Production cost savings
Improved market access Additional sales at premium prices
Increased biosecurity – endemic and exotic Avoided losses associated with exotic disease
disease management events (additional sales)
Production cost savings
Consumer satisfaction Additional sales at premium prices
Additional lamb sales at premium prices dominate expected industry impacts and this
benefit is quantified in the economic analysis. The benefit is estimated using data gleaned
from published industry statistics (e.g. ABARES) and experience in Western Australia with
improved processor feedback on the performance of slaughter lambs (i.e. WAMMCO).
Data used to quantify industry benefit is summarised in Table 7.
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Table 7 – Summary of assumptions
Variable Assumption Source and comment
Price premium paid to $0.22/kg WAMMCO Western Australia data provided by

lamb producers as a result MLA. The premium is the actual payment made
of better information and to lamb producers for complying stock. It is
meeting processor therefore a proxy for processor profit and is net
specifications of any capital or operating costs incurred by the
abattoir
Average slaughter weight 21.8 kg per head ABARES 2011 – average carcase weight 2005
of Australian lambs to 2010
Per head gross benefit of $4.80/head Premium per kg ($0.22/kg) X average slaughter
adopting Plan outcomes weight (21.8 kg)
Cost per lamb assessed $1.50/head Consultant estimate – including both capital and
labour and an estimate for those stock that do
not receive a premium
Net benefit to producer of $3.30/head Gross benefit of $4.80 less grading cost of
lambs that better meet $1.50. This estimate is broadly consistent with
processor specifications the literature e.g. McLeod 2007 found a benefit
of $3.32/head while Anon. 2010 identified a
benefit of $3.50/head
Australian lamb kill 19.6 million head ABARES 2011 – average of turnoff for slaughter
2005 to 2010
Percentage of the 15% Consultant assumption – tested with sensitivity
Australian lamb kill analysis
adopting Plan outcomes
and receiving the price
premium
Year in which improved 2018 Consultant assumption based on review of the
information flows and RD&E Plan
some adoption of plan
outcomes first occurs
Year in which maximum 2023 Consultant assumption based on review of the
adoption occurs RD&E Plan
Year when premium 2031 Consultant assumption based on review of the
begins to decay RD&E Plan
Probability of research 80% Consultant estimate based on plan quality and
success delivering price low risk profile of MLA investments
premium to producers.
Summary of benefit/cost analysis results

Benefit/cost analysis results associated with delivery of outcome one for both a ‘core’ and
‘pessimistic’ scenario are summarised in Table 8.
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Table 8 – Benefit/cost analysis results (discount rate 7%, 30 years)
Criterion Pessimistic scenario Core scenario

(10% of flock receive premium) (15% of flock receive premium)
Present value of benefits ($’ million) 26.55 35.56

Present value of costs ($’ million) 4.08 4.08
Net present value ($’ million) 22.48 31.49
Benefit/cost ratio 6.52 8.73
Internal rate of return (%) 30.4 33.2
Breakeven analysis reveals that the percentage of the flock receiving a price premium
would need to fall to 2% before investment costs would equal investment benefits.
Economic evaluation conclusion

Investment in outcome one of the Lamb Supply Chain & Animal Information RD&E Plan
has been assumed to produce a number of benefits, one of which has been valued (i.e. a
price premium for lamb carcases that comply with processor requirements). A total
investment in outcome one of $4.08 million (in present value terms) has been estimated to
produce gross benefits of $35.56 million (present value terms) providing a net present
value of $31.49 million and a benefit/cost ratio of almost 9:1 (over 30 years, using a 7%
discount rate).
8. Alignment with industry / Government priorities

The planning context for this document is described in Section 1.1. Further detail on
relevant plans, namely the National Sheepmeat Production RD&E Strategy, Sheepmeat
Industry Strategic Plan (SISP) and MLA Strategic Plan 2010-15, is presented in Appendix
1.
In summary, these plans envisage the development of a low-cost individual animal
identification (IAI) system and associated hardware, software and data flows between
producers and processors, with benefits from the improvement of:
 Supply chain efficiency;
 Product integrity and quality;
 Disease tracing and surveillance; and
 Remote monitoring and management of sheep on-farm.
This plan largely addresses the strategic priorities of these three plans. We note however
in respect to the National Sheepmeat RD&E Strategy that:
 Some of the target dates identified are in the National Strategy are unlikely to be met
– in particular, for several deliverables in imperative 1 with a target date of 2011
(although some have arguably already been met, for example ‘software and systems
that provide tracking capability for individual carcases to final inspection’).
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 This current plan has not included the deliverable: ‘By 2019, commercialise a low
cost animal ID system with the required management and traceability features’. This
is considered to be a matter for the private sector.
Table 9 shows the Commonwealth Government’s Rural Research and Development
Priorities and the degree to which the RD&E recommended in this plan aligns with those
priorities.
Table 9 – Alignment with Rural R&D Priorities
Priority Outcome Alignment of this plan
Productivity and Improve the productivity and profitability of High – potential

Adding Value existing industries and support the productivity benefits as
development of viable new industries highlighted
Supply Chain and Better understand and respond to domestic High
Markets and international market and consumer
requirements and improve the flow of such
information through the whole supply chain,
including to consumers.
Natural Resource Support effective management of Australia’s Low
Management natural resources to ensure primary industries
are both economically and environmentally
sustainable.
Climate Variability Build resilience to climate variability and adapt Low
and Climate Change to and mitigate the effects of climate change.
Biosecurity Protect Australia’s community, primary Medium – opportunity
industries and environment from biosecurity to increase traceability
threats. and animal health
surveillance
Supporting the Rural Improve the skills to undertake research and High
Research and apply its findings.
Development Promote the development of new and existing
Priorities: technologies.
Innovation skills
Technology
9. Management structure and reporting
9.1 Steering Committee

Overview and role
Primary oversight of this plan should be the responsibility of a Lamb Value Chain
Efficiency Steering Group or Committee. It is envisaged that this group would report to
either the RMCiC because of its national focus or, potentially, the Southern Australia Meat
Research Council (SAMRC), which brings together representatives of peak industry
bodies, funding bodies, research providers and other stakeholders.
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A committee of SAMRC – similar to those already in place for programs such as

Feedbase – is likely to be the most suitable ‘home’ for Lamb Value Chain Efficiency,
because the focus of work is clearly in southern Australia.
The role of the Committee will be to take a strategic role, ensuring monitoring and
evaluation of current activities, identifying gaps / future work and allocating resources
appropriately.
Because the three outcome areas proposed for this plan are closely interlinked, there will
not be a second-tier governance structure at outcome level. Project steering teams would
be justified for larger projects.
Membership
The starting point for the Committee is the Sheep CRC and MLA-convened Lamb Supply
Chain Group, which comprises managers from various sections of MLA, the Sheep CRC,
NSW DPI, Vic DPI and DAFWA (that is, the principal investing partners). This Group will
cease at the conclusion of the sheep CRC. A new steering committee should be
established and the membership adjusted with the following considerations in mind:
 While some representation of investors is inevitably required, the membership should
provide a range of core skills. The skills needed at the table include:
 Sheepmeat production;
 Sheepmeat processing;
 Livestock exchange;
 Information systems;
 Animal health surveillance;
 R&D management; and
 Extension/capacity building.
 The membership should reflect the emphasis on ‘D’ and ‘E’ rather than ‘R’ in this
plan.
 The level of competition between private providers of hardware and software systems
would seem to argue against their inclusion in the Committee. Instead, this plan (see
Project 3.1) suggests a forum for exchange of information and ideas between
participants across the value chain.
9.2 Program and project management

Program and project management – coordinating calls for proposals, contracting,
milestone monitoring, variations, IP management and so on – will be the responsibility of
MLA. MLA has established contractual relationships with each of the agencies and the
required processes and systems are already in place. The $3m+ annual investment
justifies a part-time equivalent staff member or external contractor to manage the program
and provide executive support to the Steering Group. As noted in the proposed budget,
$100,000 per annum (5%) has been allowed for to cover professional fees and expenses
associated with program management.
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Appendix 1: Relevant excerpts from related industry plans
National Sheepmeat Production RD&E Strategy

Outcome SMART deliverable
Imperative 1: Enhancing food safety, product integrity and biosecurity

2. Develop a low cost individual animal  By 2014, enhance animal ID systems that
identification system that provides for; provide lifetime identification for management
- individual animal tracking in the yards and purposes and traceability through the supply
remotely in the paddock chain.
 By 2019, commercialise a low cost animal ID
- improved productivity through collection and
analysis of lifetime production data to aid system with the required management and
selection and breeding decisions traceability features.
 By 2011, in collaboration with the private
- traceability through the supply chain for
sector, develop software and systems that
producer feedback and to meet biosecurity
provide tracking capability for individual
requirements
carcases to final inspection.
- the development of automated animal  By 2011, in collaboration with the private
handling systems that reduce labour and sector develop the relationships and culture
handling costs that will improve the feedback of carcase/
disease information to producers.
 By 2011, integrate individual ID with
automated animal handling systems to reduce
labour and handling costs.
 Imperative 4: Enhancing integration and value-adding in supply chains (including cost
efficiency)
1. Develop a tool for real time live animal  By 2012, quantify the marginal value of real
assessment of meat yield and other meat time technology to predict yield compared to
quality attributes. using weight and fat score measures.
 By 2015, complete technical and commercial
feasibility studies for portable real time live
animal yield assessment.
 By 2015 assist sheep processors develop
abattoir systems to measure and pay suppliers
on saleable meat value.
2. Develop best practice systems for effective,  By 2011, undertake market research to
individual animal, carcase and disease understand grower requirements from
feedback from abattoirs to producers. processor feedback systems.
 By 2012, develop a framework and protocol
for best practice feedback to sheepmeat
producers from the processing sector.
Imperative 7: Aligning animal welfare practices with consumer and community expectations
2. Use individual animal ID technology to  By 2015, provide proof of concept for
remotely monitor animal health and welfare technology to remotely monitor individual
through automated systems that reduce animal health and welfare.
labour and management time.  By 2020, commercial systems for remote
monitoring individual animal health and
welfare available to producers.
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Sheepmeat Industry Strategic Plan (SISP)

Strategic theme Action
1. Meeting demand 3. Improve supply chain efficiency

Examine and work with five supply chains representing at least 50% of the
industry capacity to develop a framework to improve measured efficiency
in those chains by 2012 (MLA/Sheep CRC).
Trial the framework in five chains and extend results to industry by 2015
(MLA/Sheep CRC).
2. Quality 4. Increase the relevance and availability of feedback along the supply
chain to facilitate quality improvement in lamb and sheepmeat.
Implement five systems that accurately measure carcase fat and yield by
2012 (Sheep CRC/MLA).
Implement carcase data feedback in three sheep supply chains by 2014
(MLA).
Investigate the viability and implementation of a practical national value
based trading system for lamb by 2015.
4. Consumers, 3. Improve nationally integrated product integrity systems
product integrity and Implement an integrated traceability system that meets the National
market Traceability Performance Standards by 2013.
Evaluate and quantify the on-farm value of traceability systems by 2011.
Increase the uptake of on-farm integrity systems.
Residue risk is proactively managed through a program of property audits
and both targeted and random residue monitoring programs to maintain
current excellent risk profile (NRS).
Residue monitoring programs meet overseas market requirements to
underpin all trade (NRS).
6. Health 1. Improve traceability and surveillance (tracking for disease)
Maintain and where appropriate enhance the national disease/surveillance
system which captures information from farm, abattoirs and diagnostic
laboratories by 2014 (AHA/MLA/SCA/AMIC).
Integrate the national system with the planned traceability system (see
4.3) to enhance information flow through the supply chain
(AHA/MLA/AMIC/SCA).
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MLA Strategic Plan 2010-15

Imperative Strategy
Imperative 1: Improving market access

1.1 Enhancing product integrity 2. Develop and promote appropriate meat and livestock
traceability systems
1.3 Maximising market options for 2. Improve industry capabilities and livestock
producers and exporters in the livestock performance through the supply chain.
export trade
Imperative 2: Growing demand
2.1. Achieving consistent eating quality 2. Develop and maintain standards and measurement
tools to underpin guarantees of eating quality
3. Partner with supply chains to support brands and
adopt eating quality systems
2.6 Aggressive promotion in export 4. Under co-operative programs support the growth of
markets - sheepmeat branded lamb supply chains to develop trade and
consumer loyalty
Imperative 3: Increasing productivity across the supply chain
3.1 Increasing productivity – on farm 3. Optimise business performance in supply chains
3.2 Increasing productivity – off farm 3. Develop new systems to improve processing
decision-making
3.3 Improving supply chain and market 4. Facilitate improved information flows and risk
information management within supply chains
Imperative 5: Increasing industry and people capability
5.3 Building industry innovation 2. Provide a range of tools, methodologies and
capability enabling support structures at enterprise and supply
chain levels
Appendix 2: Further information on R&D funders and providers
AMPC
The Australian Meat Processor Corporation invests in 3 programs:
1. The Joint program, which operates in accordance with an agreed Memorandum of
Understanding across the red meat industry organisations, focuses on marketing
activities and some R&D, directed at supply chain, market access and developing
and marketing products in international and domestic markets.
2. The Core R&D program, which is the main program directed at research in the
meat processing industry, is administered by AMPC and delivered by MLA and is
supported by industry-wide consultation processes. This program addresses
issues facing the red meat industry such as climate change research,
environment, sustainability, technology and innovation, livestock management and
capability. The program is directed to address R&D issues that impact industry,
Government and the community.
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3. The Plant Initiated Program (PIP) is a program directed at enhancing uptake of

Core R&D through plant-initiated projects, allowing for company-specific
innovations and facilitated adoption through applied R&D.
DPI Victoria
DPI distinguishes between a ‘supply chain’ and a ‘value chain’ approach to the lamb
industry. The distinction between the two – that is, what DPI believes needs to change –
is shown in Table 10.
Table 10 – Distinction between ‘supply chain’ and ‘value chain’ approaches (Vic DPI)
‘Supply chain’ ‘Value chain’
Producer-led and production driven Consumer-led and market-driven, innovative

RD&E
‘Long’ with more interventions ‘Short’ with fewer interventions
Uncoordinated, disjointed communications Database and software integrates
with poor feedback communications from end to end with effective
feedback loop
Minimal inventory management and mob- Uses inventory management and EID to
based with a disconnect in scheduling and schedule production and inform breeding
ability to meet product specification objectives to meet product specification
Random contracts, wide-ranging specifications Specific contracts and value-based marketing
and speculative pricing impedes production / used to drive on-farm production and profit
profit
Ad hoc market compliance and undefined food Excellent market compliance and food security
security standards advantages
DPI is developing an integrated series of programs to serve lamb industry development,

delivered by Farm Services Victoria (the delivery arm), Future Farming Systems Research
and Biosciences Research. These programs include:
 ‘Lamb Directions’, managed by DPI’s Future Farming Systems Research division.
Lamb Directions seeks to conceptualise and model – both virtually and on real farms
– cutting-edge lamb production systems which are then used to inform RD&E and
policy.
 Flexible Feedbase Systems, such as Evergraze, in which flexible pasture systems
are matched to production systems such as lamb finishing.
 Innovative Animal Systems, examining issues such as ewe management, lamb
survival and early reproductive success.
 ‘Lamb Foundations’, a major 6-year research project to establish a genotypic and
phenotypic resource for all of the above.
The DPI lamb program will span the whole of industry, from producers (using focus farms
and the Bestwool / Bestlamb producer network), through collaborating processors to
retailers. A strong state commitment to sheep EID underpins the program.
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Infrastructure developments to the value of $1.28m have been undertaken during

2010/11, with a further $2.05m requested in 2011/12 for an animal house with imaging
and other capability at Hamilton. Facilities have been consolidated to a Centre of
Excellence in Hamilton with strategic research also being at Bundoora and Attwood.
The staffing budget for the lamb program has been increased by $3.3m over three years
then $1.0m pa ongoing. The indicative allocation of this funding is as follows:
 Accelerate adoption of new technology in farm systems: 35%
 Improve exchange of information through the value chain: 10%
 Develop targeted technology to increase productivity and lamb supply: 35%
 Build a leading lamb RD&E capability to meet national obligations and attract
investment: 20%
The new positions created under this budget are a Principal Scientist; 8 Senior Research
and Research Scientists (from field to genomics); one Lamb Specialist (Extension); one
Lamb Value Chain Project Officer; and several PhD students.
NSW DPI
NSW DPI works with willing processors to measure and capture a defined value and yield
of lamb and distribute this value to their suppliers. Systems need to be in place to follow
individual carcases / animals and/or lots through to the boning room with a mechanism for
the estimation of yield and value. Systems need to be automated and allow easy
communication up and down the chain. NSW DPI seeks stronger ties between the
processor and producers and through to the seedstock producer with genetics. There are
at least 5 current lamb and sheep supply chains that have developed due to previous co-
operative work by NSW DPI.
Improving the value chain is a priority for NSW. NSW DPI is committed to continue to
work strategically with individual processors as each has different needs. Some
processors may want to develop systems with preferred suppliers and others may want to
use components of a system that improves their efficiency or improves product quality
such as reducing number of lambs outside their preferred specifications or through
specific technology like electrical stimulation to achieve MSA compliance. NSW DPI
believes that a blanket approach to value chains will not work. NSW DPI has done most of
the RFID and precision sheep management work for the Sheep CRC and worked with
Victorian DPI.
New industry funding would allow project staff to work with a number of NSW processors,
representative of both the domestic and export markets. These abattoirs process a high
proportion of the NSW kill. NSW DPI has an excellent working relationship with these and
other processors and appropriate policies to ensure commercial and in-confidence issues
are appropriately addressed. At least one large processor has offered to contribute to a
new RD&E program.
With industry support NSW DPI’s intentions are to:
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 Develop systems for information transfer including development of improved market

intelligence;
 Oversee further development of web-based feedback systems for weight, fat, yield,
eye muscle depth (EMD), PIC, animal health and commercial value. This work will
continue the development of mob-based systems for NLIS which was funded by the
Sheep CRC to investigate the use of RFID technology on-farm through to the
abattoir;
 Assist development of processing efficiency including further automation on the killing
floor and in the boning room and for the tracking of carcases;
 Develop measurement technologies for carcase traits and economic meat quality
traits for application at the processing level;
 Better understand factors that influence yield and eating quality and the relative value
of these factors;
 Develop with industry new lamb and sheep meat cuts to improve total carcase return;
 Improve lamb supply channels and timing of sale;
 Improve skills of lamb producers and buyers in livestock assessment, market
specifications, value of improved genetics and strategic relationships within value
chains;
 Continue to oversee and manage demonstration sites including use of mob and
individual animal identification for finishing systems and for improved genetics by
simple progeny evaluations for commercial traits of significance such as weight,
leanness and EMD;
 Continue to liaise with and advise industry participants of the appropriate strategies to
improve efficiency within each specified value chain;
 Demonstrate to value chains and industry that RFID is one of a number of tools that
can be used on-farm for capturing and transferring information;
 Work with producers and processors to ensure efficient and sustainable supply
chains occur through communication and trust; and
 Create understanding within supply chains that management tools can improve
efficiency, but that these don’t ensure either efficiency or sustainability. The key for
success is based on trust, good communication and flexibility.
Sheep CRC
The Sheep CRC and it predecessor have developed systems that could improve value
chain efficiency and these usually need IAI, specifically electronic ID.
These systems include precision sheep management (www.sheepcrc.org.au/industry-
tools-and-information/precision-sheep-management.php) (PSM) which focuses on
managing individual or selected groups of animals to take advantage of the large variation
between animals within a flockwith many extension and training programs and material
being developed, for example the PSMGlovebox Guide and a new training course ‘Using
eID for Sheep Breeding’.
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Walk Over Weighing (WOW) utilises the concept of remote individual animal management
(RIAM) to monitor sheep without human intervention by electronically capturing and
recording an individual sheep’s tag and weight as it passes over weighing scales on its
way to feed or water. Sheep require electronic (RFID) tags for the collection of individual
animal weights but untagged animals can be monitored as a mob. Equipment required
includes an RF tag reader, electronic weigh scales and an indicator (data logger) to record
the tags and weights. The system is powered from 12 volt solar panels and batteries. A
drafting unit can be added. With the Tru-Test indicator and telemetry systems, remote
access and data transfer from the indicator to a home computer using mobile phone and
modem technology is now available. Associated software has been developed
Pedigree MatchMakeroffers a method of collecting dam pedigree of the lamb. It is a walk-
by system with associated software that uses animal RFID data to estimate associations
between dams and their lambs, and ultimately provides an accurate pedigree match.
When added to sire pedigree, it adds substantially to the value of the information.
Various software programs to aid management have also been developed, predominantly
by NSW DPI:
 Lamb Growth Predictor uses repeated live weights to calculate individual growth
rates and predicts weights and number over a target weight at future dates.
 Simultaneous Assortment selects animals most appropriate for wool or meat
production from an existing flock. It depends on individual information on the animals.
 Selection Assist predicts genetic progress that can be made using different selection
strategies over a 5- or 10-year horizon.
 Ram Value Calculator estimates and compare value of rams in a commercial flock.
Appendix 3: Scenarios for 2020
A producer perspective
This scenario suggests that individual animal information (IAI), efficiently handled, could:
 Lead to significant productivity increases on farm through better genetics and animal
management;
 Reduce on-farm cost of production;
 Improve individual animal health and welfare;
 Provide tight carcass specifications built on consumer and processor needs;
 Build certainty about supply / demand via co-operative pipeline arrangements -
partially removing barriers between buyers and sellers;
 Allow a continuous improvement philosophy to permeate the value chain;
 Differentiate the market and enhance consumer satisfaction;
 Meet future Government and industry requirements in relation to biosecurity issues;
 Improve and demonstrate improvement in industry’s management of animal welfare;
and
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 Make farming ‘easier’.
Sylvia’s story
Sylvia Cash hit the send button. It wasn’t the old
email approach that was used last decade, she What’s the enabling
recalled with some amusement, but a cyber-file technology?
that went straight to her buyer’s database. At the A central database to house all
same time, it immediately linked into and updated pipeline information from farm
their own inventory data-base; adjusted MyAcct, genetics to consumer feedback
their accounting program; and sent the information
Direct data transfer to pipeline
(as required) to ASTORMICloud, the sheep participants
industry's national database managed by
Extensive Livestock Australia Pty Ltd (ELA). ASTORMI stood for Australian Sheep
Terminal Of Registered Measurement Information and, back in 2014 when the name was
coined, stormi seemed a good name given the kafuffle over RFID and a central sheep
database over the preceding few years.
Sylvia knew that things were now so much easier
on the farm since they had invested in soft What’s the enabling
systems to support their business. The productivity technology?
gains they made on the farm and their ability to Electronic ear tags in lambs and
meet customer requirements was something they sheep with reader, automatic
could only dream of 10 years ago in 2010. drafting and wireless transfer of
data
Sylvia had just ‘sent’ a consignment to High
Country Meats (HCM), the processor and wholesaler to whom they sold most of their
animals. This consignment was of 75 culled ewes, identified by her husband Jack who
finished pregnancy testing their ewes not 30 minutes ago. It was so simple. Jack would
electronically read each eartag, scan the ewe, type in 0, 1, 2 or 3 to signify the number of
foetuses identified and the information would be zapped back to Sylvia in the office. In
Sylvia's office, the data would be automatically checked and any ewes that were dry or
were found to have low EBVs for key production traits would be shot straight back to the
yards where these sheep would be drafted off automatically. All that was left to do now
was for the HCM truck to come and pick them up.
Out of 1600 ewes, 75 being dry or having low EBVs was unusually high given how
stringently their sheep were culled, but it had been a much tougher season this year. For
a variety of reasons, the Cashes took a pretty unforgiving approach to their business. Not
pregnant – out you go; low EBV’s – out you go; health issues – out you go. But the
resultant productivity gains warranted it.
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Being culled ewes and thus destined for

manufactured meat, the information required by What’s the enabling
HCM was quite a bit less than for the prime lambs technology?
they bought. All HCM wanted to know was sex, Prediction of processor / consumer
age, live weight (taken the standard 4 hours off traits on live animals - LMY, eating
feed and water), their calculated Lean Meat Yield quality, EMD etc
(LMY) and of course electronic ID number.
Development of and constant
Obviously the Cashes’ database held a lot of
updating of specific algorithms to
production information on these ewes (EBVs,
enhance accuracy of key processing
fleece weight and fibre diameter, FECs, number of
/ consumer traits
progeny per annum, ease of lambing etc) but that
was of little interest for these old girls now. The
Cashes were always only ever paid on LMY – they would have preferred to be paid on
Saleable Meat Yield but knew that this was a more difficult metric given the differences in
the degree of fat trimming required for processors to meet specifications for various
markets. For these cull ewes, LMY was calculated by a constantly updated algorithm
based on real results compiled by HCM over the last 10 years on the Cashes’ animals.
The processing data on these 75 animals would actually be added to the Cashes’
database and then a new algorithm produced and zapped back to Sylvia. Also returned,
once these sheep were processed, was information on any animal health issues picked
up during processing so that the Cashes could take remedial action if necessary.
Sylvia and Jack really ran a family farm, but it was
different to that of a decade ago where they had to What’s the enabling
employ 2 or 3 men part time – and that was costly. technology?
Now with the use of EID, remote sensing, Development of and constant
automatic drafting and regular animal updating of specific algorithms
measurement across a whole range of traits, the predicting key processing
two of them could easily manage the 12,000 ewes characteristics
they ran – although a good dog was still needed!
Sylvia went back to her database to save all the
files when an email alert hit Sylvia's screen. HCM What’s the enabling
advised that a client had to supply a special order technology?
for the Legends Dinner at the Cricket World Cup in Highly specified grid pricing
two weeks’ time at Turnbull Stadium in Canberra. schedules clearly understood by
They needed 100 lambs with specified eye muscle producers
depth, eating quality grade A and estimated LMY
Direct tenders for product
of 60%. Sylvia reckoned they could supply that but
the best part was that the order was 25% above Genetic markers for eating quality
yesterday’s price grid. If they couldn't get 100 lambs to meet that spec out of the flock of
Bart the 3rds (Jack's best ram) then she'd eat her hat. She hit ‘accept’ and hoped that her
bid got back to HCM first so that they won the contract.
‘Good old Bart the 3rd’, she thought. He was a ripper. His genetics were superb, and
several years of progeny testing and feedback from processors showed that Bart's
offspring regularly topped the ASTORMICloud Meat Eating Quality Awards. As a result,
Page 66 of 76
companies like HCM chased his lambs because they easily met the MSA premium grade
that was required to get lamb into any restaurants of two stars and above. Bart’s progeny
always received a 5% premium over other sires’ lambs because, not only was his eye
muscle size huge and LMY high, but his marbling for such lean animals was quite
remarkable – making meat from his progeny highly sought-after. The best part, Sylvia
thought, was that Bart the 17th showed even better potential. But HCM didn't know about
him – yet!
Jack’s story
Gee that's a good beer, thought Jack, as he took
another sip and watched Snowy and Rusty keep What’s the enabling
the sheep up to the automatic drafting race to take technology?
the culls off before he took the bulk of the mob Remote sensing of individual
back to the paddock. Suddenly his phone beeped. animals by mobile mechanical
Damn, he thought! Jack had received a text from means (the example here portrays
ROVER5 that indicated he might have a struck a vehicle, but the concept could be
sheep in the one-year-old maidens. I had better go stationary or undertaken by other
and have a look – these girls are worth $350 each means)
– and that's enough to pay school bus fees for a
month.
So while Snowy and Rusty did their stuff, Jack jumped on the 6-wheeler to see what was
wrong. ROVER wasn't another of his prize Border Collies but a strange looking
contraption, an electronic ‘shepherd’ that wandered around the paddocks day and night.
ROVER was a Remote Observation Vehicle with Extended Range. ROVER was a mobile
ration dispenser and weighing device that could also detect a range of visual, olfactory
and temperature symptoms in sheep. The sheep would step up onto a low platform on
ROVER, their ear tag would be read and if they hadn't had their holistic supplement for 24
hours, a small (100 gram) ration would be dispensed to the feed bin (if they had, no feed
would be sent down and the sheep would eventually back out). While feeding, ROVER
would weigh the sheep and its sensors would smell for any tell-tale fly strike odours, take
body temperatures etc. On this occasion, it picked up the risk of fly strike so the gates
behind the sheep closed and it sent a message to Jack.
"Good old ROVER gets it wrong sometimes," Jack
thought as he drove down the paddock. But What’s the enabling
ROVER had been invaluable. Not only did he technology?
constantly monitor the animals, but he and his Saleyards with automated
cousins had also been a key driver in the electronic readers and databases
Australian sheep industry getting the RSPCA and linked to the national database
OIE "tick" of approval for animal welfare practices,
now so important for domestic and export markets. This time ROVER was right so Jack
treated the animal, let it go back to the mob and headed home to let the sheep out. Jack
knew that their data-base would be automatically updated with this info and that the ewe
5
ROVER was a product of the LWA / AWI scenario planning project FutureWoolscapes
Page 67 of 76
just treated may soon be culled as a result. On the way home Jack thought to himself that
he must look at buying ROVER 2 as the newer model actually has the capacity to treat the
animal itself. Jack parked the trike and headed inside. Tonight old Fred was coming to
dinner.
Fred was a great old bloke. Been farming for 50 years but to be honest struggled to make
ends meet. His wife left him a few years back and with all the kids now off his hands Fred
was pretty lonely. Jack and Sylvia did the neighbourly thing and invited Fred over for
dinner every few weeks.
"How could you afford to buy the missus a new stove?," said Fred as he walked into the
kitchen, where the piquant aroma of rosemary-infused rack of lamb wafted. "I dunno how
you do it, I got 110 bucks for my best lambs at Hamilton last week and that will hardly
cover my electricity bill," Fred said. Sylvia tried to change the subject as she knew that if
she got the World Cup dinner contract, those fellas were going to bring $270 each. "I must
remember to tell Jack about that," she thought, "but not in front of Fred".
Fred was one of a small but disappearing group of sheep producers. He used EID only
because it was Government-mandated after the worrisome FMD scare of 2013 (which
turned out to be an absolute furphy but was enough to push all state Governments to
make EID compulsory from a biosecurity perspective). Fred shoved an EID tag in his
sheep and lambs just before they got on the truck but he kept no measurements of
individual animals and received no feedback from processors; information that helped the
Cashes continuously deliver a better product to their customers. Jack had tried many
times to encourage Fred down the path he had taken. "You can still sell through
saleyards, Fred,", Jack had said on numerous occasions. Indeed many producers who
sold through saleyards with individual animal ID did very well, but they did so not because
of an ear tag but because of the information that sat behind it. Information that processors
and consumers increasingly wanted.
Jack lamented the fact that his friend was still a price taker, when the investment in
software and hardware that Jack and Sylvia had made had paid for itself in a couple of
years.
A consumer perspective
Jenny’s story
What’s the enabling
Jenny had guests for dinner last week where she technology?
had served Moroccan spiced barbecued lamb
Web-based, publicly-available
using lamb rounds. Her guests commented later
information on quality assurance
how delicious the lamb was. Jenny had bought the schemes and branded product
lamb from a major supermarket chain and had
recorded the barcode on the package. She had checked the industry database with her
smartphone. The lamb had been grown in western Victoria and parentage had included a
NSW Dorset bred ram and a SA Merino ewe that both had identified genetic
characteristics for meat tenderness and higher-than-average omega-3 fatty acids. The
lamb and its dam had been grown using lamqa1, the farm industry assurance scheme for
Page 68 of 76
sustainable environment, animal welfare and food safety. It had also been slaughtered
and the meat processed using lamqa2, the processing and retail industries’ meat quality
and food safety module. Ninety-three percent of customers who provided feedback on this
product over the last 3 months had rated the product as excellent.
Based on the genetic profile of the sire, it was also likely the lamb would have zinc and
iron levels that would meet product official dietetic guidelines. The omega-3 fatty acids
were also 40% above the meat industry average, meaning that Jenny would not have to
buy highly priced fish to meet her personal health needs.
Jenny did a search and found a similar product was available at a number of local stores,
but on special at an outlet in the next suburb. She purchased the same branded lamb
rounds for her next dinner. She also provided feedback on her previous purchase and was
rewarded with double customer loyalty points for her next similar product purchase.
Appendix 4: Listing of organisations consulted

 Allflex
 AMPC
 Australian Livestock Export Corporation (Livecorp)
 AWI
 DAFWA
 DEEDI Queensland
 DPI NSW
 DPI Victoria
 DPIWE Tasmania
 Hardwicks, Kyneton (processor)
 Hillside abattoirs
 Lamb Supply Chain Group
 Livestock Exchange
 MLA – Livestock Production Innovation, CIS, NLIS, NLRS
 Murdoch University
 PIRSA
 Practical Systems
 Livestock producers
 Sapien Technology
 SARDI
 Sheep CRC
 Sheepmeat Council of Australia
 T & R Tamworth
 WAMMCO
Page 69 of 76
Appendix 5: Documents reviewed in the preparation of this plan
Plans and programs for improved lamb value chain efficiency from Australia and
overseas
AMPC (Australian Meat Processing Corporation) 2010, Annual operating plan 2010-2011.
Anon 2009, Primary Industries Standing Committee Agenda Paper: Agriculture Value
Chain Analysis, 19 March.
Anon 2010, Technical Briefs for the Sheepmeat Industry National RD&E Imperatives for
Consideration by the RMCIC, February.
Anon undated, Value chains: NZ models and experiences (Powerpoint), supplied by Vic
DPI.
AUSMEAT 2010, Livestock Production Assurance – Level 1 On Farm Food Safety
Approved Standards. Approved by the Livestock Production Assurance (LPA) Steering
Committee.
Deloitte 2011, NZ Red Meat Sector Strategy 2011. Beef + Lamb New Zealand Limited and
Meat Industry Association of New Zealand.
DAFWA (Dept of Agriculture & Food WA) 2009, Plan to Support Livestock Industry
Development 2009-12.
Farmer, B. 2011, Independent Review of Australia’s Livestock Export Trade, Report to
Commonwealth of Australia.
Fearne, A. 2009, Sustainable Value Chain Analysis: A Case Study of South Australian
Wine. PIRSA.
Food Chain Centre UK 2007, Applying Lean Thinking to the Red Meat Industry.
George Morris Centre 2007, Value Chain Analysis for the Canadian Lamb Industry. Final
report. Canadian Sheep Federation.
MLA (Meat & Livestock Australia) 2010, Strategic Plan 2010-15, June.
MLA 2011,Feedbase R & D Plan: R&D for the meat industry feedbase in southern
Australia. Approved Draft, May.
MLA (undated).MSA Lamb and Sheepmeat Eating Quality Strategy.
Parsons, J. 2008, The New Industry Transformation. How to Redesign New Zealand’s
Red Meat and Wool Supply Chains Supply Chain Relationships and Value Chain Design.
Nuffield Scholarship Report.
PISC (Primary Industries Standing Committee) 2009,The Australian Pork Industry
National Research, Development & Extension (R,D &E) Strategy, December.
PISC 2009, A National Beef Research, Development and Extension Strategy, March.
PISC 2010a, National Sheepmeat Production RD & E Strategy, January.
Page 70 of 76
PISC 2010b, Development of a National Research, Development and Extension

Framework for Sheepmeat: Imperatives, Outcomes, Deliverables and Programs, May.
PISC 2011, Grains Industry: National RD & E Strategy, April.
PISC 2011, National Wool Research, Development and Extension Strategy.
Primary Growth Partnership 2010, Media Backgrounder: Integrated Value Chain for Red
Meat NZ Silver Ferns Partnership.
Sadler, I. 2004, Improving Supply Chain Strategy for Red Meat: A Comparison Between
Australian and UK ‘Lean’ Practice. Victoria University, Working paper series 4/2004.
SCA (Sheepmeat Council of Australia) 2010, Sheepmeat Industry Strategic Plan (SISP)
2010-15.
Sheep CRC Cooperative Research Centre for Sheep Industry Innovation) 2010,
Operational Plan 2010-11.
Thankappan, S., and Flynn, A. 2006, Exploring the UK Red Meat Supply Chain. The
Centre For Business Relationships, Accountability, Sustainability and Society (BRASS),
Working paper series No. 32.
Research papers, evaluations, extension and media articles

ABARES (Australian Bureau of Agricultural and Resource Economics and Sciences)
2011, Agricultural Commodities September quarter.
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2007/08: Final Report, MLA.
Animal Health Australia (AHA) 2004, National Traceability Performance Standards.
Anon 1994, Profile of Beef and Sheep Carcases Produced in Australia During 1993/94.
Project M.369, Meat Research Corporation.
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Chain, DPI Victoria.
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Page 71 of 76
Anon undated, Update on the Consumer Evaluation for Lamb and Sheep Meat. A Note on
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Final Report: Red Meat Co-Investment Committee: Lamb Supply Chain & Animal Information RD&E Plan

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Final Report: Red Meat Co-Investment Committee: Lamb Supply Chain & Animal Information RD&E Plan

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final report

Project code: B.LSM.0029

Date published: April 2013

Red Meat Co-investment Committee:

6. Individual lamb identification does have a potential role in value-based marketing,

The plan – at a glance

2.4 Develop technology to allow processors / consumers to

ABBREVIATIONS USED IN THIS DOCUMENT .................................................................... 9

2. SITUATION ANALYSIS ....................................................................................... 11

3. STAKEHOLDER PERSPECTIVES AND POTENTIAL CONTRIBUTIONS ......................... 25

Identification system suppliers ................................................................................................................ 31

6. LAMB SUPPLY CHAIN RD&E PLAN ................................................................... 38

8. ALIGNMENT WITH INDUSTRY / GOVERNMENT PRIORITIES ..................................... 55

APPENDIX 1: RELEVANT EXCERPTS FROM RELATED INDUSTRY PLANS .......................... 58

APPENDIX 2: FURTHER INFORMATION ON R&D FUNDERS AND PROVIDERS ................... 60

APPENDIX 3: SCENARIOS FOR 2020 .......................................................................... 64

A consumer perspective ....................................................................................................................68

APPENDIX 4: LISTING OF ORGANISATIONS CONSULTED ............................................... 69

Abbreviations used in this document

1.1 Planning context

2.1 Overview of the sheepmeat value chain

Figure 1 – Number and size of slaughter lamb-producing farms 1989-90 to 2009-10

Lamb selling systems

Figure 4 – Lamb selling methods used by farm performance groups

2.2 Processes and systems

Livestock Data Link

Precision sheep management

Meat Standards Australia and Livestock Production Assurance

SEEDSTOCK COMMERCIAL SALEYARD ABATTOIR W’SALE/ CONSUMER

POTENTIAL INTEGRATED SYSTEM

2.3 Analyses of the value of EID / IAI

2.4 Models from other agricultural industries

2.5 Models from overseas

European Union (EU)

Strengths of IAI to improve value chain efficiency

Weaknesses of IAI systems

Opportunities for IAI to improve value chain efficiency

Threats to using IAI

3. Stakeholder perspectives and potential contributions

3.1 Funding bodies

Australian Meat Processor Corporation

3.2 State agencies

Table 1 – Sheepmeat production RD&E priorities in state agencies

Primary Industries Research Support 21.7 21.1 Major capability is in

The University of Melbourne

Charles Sturt University

3.4 Sheep CRC

3.5 Commercial operators

Adding more substance to the vision…

5.1 What is needed to reach the vision?

Table 2 – Gap analysis

Processor  Supplier  Estimated lean  Can pay 10. Measurement or

Whole of  Many ‘isolated’ Clear benefits  Integrated 19. Integrated

5.2 Links and associated activities

6. Lamb supply chain RD&E Plan

6.1 Outcome areas

An important note on funding

Outcome 1: Collect and transform data into information of value to participants

Projects KPIs Comments RD&E providers Indicative $