Background to the MGB programme
Internationally, high-quality beef is usually produced from cattle housed in feedlots and fed corn and other grains. As a result, there is consumer demand for grass-fed, free-range, high-quality beef.
Much of New Zealand's beef is lean and destined for use in burgers and smallgoods. MGB aimed to develop premium, high-quality, marbled, grass-fed beef that is internationally recognised for its superior eating qualities. This would be more profitable to all parts of the value chain.
MGB was a 7-year Primary Growth Partnership programme between:
- the Ministry for Primary Industries (MPI)
- Firstlight Foods Ltd and Firstlight Wagyu (NZ) Ltd
- Brownrigg Agriculture Group Ltd.
MGB used Wagyu sires with high-marbling genetics crossed with dairy and Angus dams to produce cattle with 50% Wagyu genetics. The programme also developed rearing and grazing systems to support year-round growth of these cattle.
Evaluation of the MGB programme
As part of its monitoring process for PGP programmes, MPI commissioned an independent evaluation. This looked at:
- outcomes and benefits
- programme execution
- any lessons.
What the evaluation found
The overall finding was that MGB was a "successful and worthwhile" programme for all parties. The programme's major achievements and benefits include:
- First Light grass-fed Wagyu can be produced year-round, to provide consistent and reliable supply
- 80% of First Light Wagyu cattle are now from dairy industry calves, providing a higher-value alternative for bobby calves
- the go-direct marketing model is well established in New Zealand and on the west coast of the USA, and both markets are expected to grow
- progress has been made towards a farm-gate price premium target of $2.12/kg for First Light grass-fed Wagyu
- First Light grass-fed Wagyu has achieved premiums of $0.80 to $1.22/kg throughout the programme. This reached a high of $2.93/kg in April 2020 during disruptions to the global market due to COVID-19
- processing numbers are increasing and will soon reach 20,000 head of cattle per annum
- a target annual volume of 30,000 head of cattle is feasible by 2025/26
- farmer support and feedback shows that adding Wagyu to their operations has been profitable
- First Light grass-fed Wagyu is profitable, and produces higher returns than typical prime beef operations
- farmers, processors, and retailers see social or "values-based" benefits
- the MGB value chain has been profitable for everyone involved
- there is value in working closely with in-market partners, and cooperating to create products that consumers want
- it's possible to create a product that's worth more by growing it the right way in the right place
- the economic benefit-cost ratio from the programme is 2.0, confirming that it has been a worthwhile investment.
The lessons learnt include:
- farmer support is required to improve performance and increase scale
- farmers will be more supportive of change if they believe in it, instead of just looking at increased profits
- parts of the value chain needed to be streamlined, and connections and communication needed to be improved
- the governance approach of the Primary Growth Partnership (now Sustainable Food & Fibre Futures) can be integrated into the way industry co-investors operate
- programmes run better when staff turnover is low
- it's helpful for people starting in governance roles to go through a good "on-boarding" process to make sure they understand the role of governance
- programme partners can benefit from continuing work together even after the programme finishes.