A few days ago I was chatting with a beef producer from Northern NSW about my recent overseas trips to China and Malaysia. He was very interested in the work I was doing with supply chains in Malaysia. However he was much more interested in my take on the Chinese expectations for food to be safe and healthy.
As we talked about my experiences, he asked me what I thought about criticisms of the National Livestock Identification System (NLIS). I reckon I should share my response to that question. The NLIS is absolutely essential to our industry and essential for any beef producer serious about their business.
I have to admit I feel so incredibly frustrated when I hear claims of how much NLIS costs individual producers, what a burden it is, and how it achieves nothing.
Our industry has so many unique advantages. We have an international reputation for the safety of our food; the quality of our food and the reliability of our supply chains. As I've said before, this reputation has been earned, but is underpinned by our ability to trace and prove our cattle are exactly what we claim them to be.
We export to over 140 countries. Without our ability to prove our integrity of supply and safety, plenty of those countries wouldn't buy our product. There are other countries who want to take our share of these markets. They can probably do it more cheaply than we can. Yet we keep that share because consumers value safety and health when it comes to their food.
I reckon if we lost a few export markets the flow on effect to farm gate prices would be significant. So at that level NLIS is essential.
So how much does NLIS cost an individual? I spent a little time looking at the NLIS tag costs on line. The price per tag ranged from $2.70 to $3.50
Now some people will instantly multiply these figures by the number of animals they own and tell me the cost is crippling them. Instead of arguing next time I'm going to ask what is their actual Cost of Production for a kilogram of beef.
The last time I did that, the person didn't know. If you know your Cost of Production you can start to hone in on costs, like NLIS.
A couple of years ago I had a producer show me their figures for their Cost of Production per kilogram.
They spent: * 0.6c on animal health
* 3.2c on Drench
*7.5c on commission
*14.7c on Fertiliser
Their NLIS cost was 0.8c. This operation was an EU Accredited operation and had over 3300 cows. All of these had NLIS tags, yet the cost of this was less than a cent per kilogram of beef!
For producers who use NLIS in most basic form, to transfer sale cattle off their property, the cost per kilogram of beef is much lower than 0.8c
For the producers I work with, minimising costs is one thing. However we know costs only account for 20% of the variation in an enterprises Cost of Production figures. The kilograms of beef produced per hectare accounts for 80% of the variation. If you are serious about becoming more profitable, you are much better off focussing on improved production.
In this case NLIS is a vital tool to record and monitor the essential parts of your herds production. I reckon if you can't identify a cow which hasn't or doesn't calve every 12 months you are already losing kilograms of beef per hectare. If you can't monitor growth rates to a target market specification, you are potentially missing the full grid price for your cattle. If you can't identify the calves of the sire you spent $4000, can you tell if those genetics are taking your enterprise in the right direction?
I'm passionate about helping producers achieve their goals for production and profitability. If we can't measure how we are going, we can't manage what we are doing, and we won't achieve those goals.
So I reckon if you are really serious about making money in beef production, NLIS is essential to you and to the industry.