ISU Team Looks at Beef Production "Down Under"

Contacts:
Susan Thompson, Ag Communications, Iowa State University College of Agriculture, (515) 294-0705; sander@iastate.edu
From "Agriculture in Action: Notes from ISU"

July 25, 2002

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A team of Iowa State University faculty traveled recently to Australia and New Zealand to study those countries' beef production and marketing quality assurance systems. John Lawrence, economics professor and director of the Iowa Beef Center, says they wanted to learn why the beef industries in Australia and New Zealand evolved as they have, and if there are lessons to be learned for the U.S. market.

"Australia and New Zealand are major beef exporters. Australia exports approximately two-thirds of its supply while nearly 85 percent of New Zealand beef is sold overseas," Lawrence says. "Together they supply about half of the beef that's imported to the United States. Plus, Australia is a major U.S. export competitor in Japan and other Asian markets."

The team found both countries pursuing innovative quality assurance (QA) and market access programs. In Australia, the QA system is led primarily by a single industry organization, Meat and Livestock Australia (MLA), plus government agencies. For each lot of cattle sold, producers complete and sign a form that carries a unique farm identification number.

The form provides information on the seller, general characteristics of the cattle and feeding program details. The sales agent adds information about the buyer and keeps a copy of the form for two years. The MLA also developed and operates a program that uses radio-frequency identification tags and a national database for a trace-back system in case food safety or quality problems arise.

New Zealand's program is led primarily by processors. Although not as far along, the country is creating a system that will contain many of the same elements as Australia's.

Lawrence says beef production and marketing are more standardized in the United States than in Australia or New Zealand. "Less than 10 percent of U.S. beef is exported. U.S. consumers by and large still trust the USDA to ensure beef safety and quality based on inspection at the plant rather than trace-back to the farm," Lawrence says. "There is perhaps less incentive for U.S. producers to attempt to differentiate their product based on safety or quality."

But Lawrence thinks that is changing. "Slowly, individual U.S. supply chains are focusing on production practices or genetics that often require additional documentation and quality assurance systems," he says. "And export markets require additional information. These changes may provide U.S. producers the economic incentives to follow the lead of Australia and New Zealand."