Economic benefits of adopting Meat Standards Australia to the Beef Industry

The Meat Standards Australia (MSA) beef grading scheme uses commercial inputs from the production, processing and value adding sectors to predict eating quality of individual muscles which are graded into 4 categories (ungraded, 3, 4 and 5 star) specific to the cooking method. From small beginnings in 2000 with only 200.000 carcasses graded, the voluntary scheme has grown in Australia to over 2 million carcasses sourced from 22,794 registered producers in 2012. Overall a benefit cost ratio of about 4 to 1 out to 2020 has been attributed to the MSA research and adoption program. Further studies have estimated the financial benefits through the supply chain to the retailer, wholesaler and the producer which deliver on average $AUS 0.3 per kg carcase weight. These benefits were obtained despite the majority of retailers simply selling MSA 3 star beef and not dividing it further into quality categories. Taste panel studies consistently indicate that consumers are willing to pay substantial premiums for 4 and 5 star grades. Already supply chains are moving to market the 4 and 5 star graded cuts which have the potential to double the benefit. Increasingly there is pressure from industry to develop transparent feedback systems which link the payment for carcases to eating quality and saleable meat yield. Additional attributes of beef like healthiness, animal welfare and carbon footprint may also be important considerations for beef consumers, especially in the European market, but it is unclear if these attributes will be incorporated into value based trading or simply be demanded at no extra cost