“I’m a beef farmer in Ireland. What is my competitive advantage?”

It would be fair to say that when US cattle breeder Lee Leachman posed this question to a 50-strong audience of Irish suckler farmers in Kilkenny Livestock Mart last month, they listened keenly. Were any regular speaker to ask this question, the answers might be taken with a pinch of salt. However, there was something about what Leachman told farmers that evening that got a lot of minds thinking. Perhaps this was because of his charisma, but his in-depth knowledge of cattle breeding and the beef industry throughout the world was probably the main factor.

Leachman is based in Colarado, a western US state. He and Dallas Horton founded the Leachman Cattle Company of Colarado in 2003. The company has since become the third-largest cattle breeder in the US. Leachman explained the scale and working of the operation: “We produce around 1,500 bulls each year for big bull sales throughout Colarado. To achieve this scale, we produce our bulls through a network of breeders called multipliers all over the state. The company also exports embryos and semen right across the globe.”

But this success didn’t happen by accident. “We have been in the breeding stock business for three generations. My grandfather did it, my father did it and I’m doing it now. My grandfather was raising Angus cattle. They won all kinds of premiums across the country and he made his way into the Angus hall of fame in the US. From that, we moved out west and started getting into Stabiliser cattle and Red Angus ourselves.”

Leachman was in Ireland to speak at a Stabiliser promotional evening organised by the Stabiliser Cattle Company, which focused on the breed’s maternal traits and beef production abilities.

With that, all talk about Leachman’s successes ended, and the hour-long discussion turned back towards his first question: “Let’s say we were going to open up a restaurant downtown. To succeed, we would have to have a strategy to differentiate what we produce. We either have to make something that is better than what other people make or we have to make it cheaper than other people could make it.”

But what is Ireland’s competitive advantage, he asked? “Realistically you have to compete with so many other enterprises,” he said. “Look at chicken. It is a cheaper source of protein than beef. Cereals are a very popular alternative too. Even poorer-quality beef from dairy cows can make burgers and today those cows would make far more money on your land than beef cows. And then of course there’s Brazil. They can make the same amount of beef for about half of what you make it for.”

But of course Irish farmers don’t, for a second, expect to compete on volume or on cost of production. Irish beef is all about quality. Leachman didn’t deny this, but asked: “How can we define high quality?”

Define quality

For Ireland, animal welfare was the first quality Leachman pointed out. “If I come out here and I look at your cows, your cows look pretty happy, they have a nice environment.” He also pointed out that greenhouse gas emissions were another quality of our beef, with Ireland’s grass-based system producing less methane emissions than intensive high-concentrate systems.

But most importantly, the final parameter for high-quality beef is taste, according to Leachman. “If Ireland could have a beef product that was really safe, really environmentally friendly and tasted great, maybe somebody would pay a little more for it. But consumers right now aren’t paying you a premium and why do you think that is?”

Fat for flavour

The reason, Leachman said, that Ireland isn’t securing this premium is that the taste of our beef isn’t what it could be. “If you cook a steak, you have got to start it out on a grill with way more fat than you want,” said Leachman. Fat is key to high-quality, tasty meat. And in this case, the fat being referred to is marbling fat. “Fat cover does affect eating quality as well,” he said, “but the difference of what I am telling you about is not fat cover but marbling fat.”

He said that since 2011, the University of Colorado has been doing tests based on how fat is sorted and stored in the meat tissue and how that affects taste. On one such test, 300 trained food professionals were asked to give steaks a thumbs-up or a thumbs-down based on taste. From the results, only 15% gave steak with low marbling a thumbs up, 62% gave medium-marbling steaks a thumbs up but 99% gave high-marbling steaks a thumbs up. Leachman asked: “If I go through a supermarket in Ireland and pick up meat, what will I find? The norm will be the low-marbling beef and maybe some medium marbling. That’s crazy. Can you tell me one other product that you buy, that has an acceptance rate of less than 62%? You wouldn’t buy it again.”

It is for that reason, Leachman explained, that the US has an intricate grading camera in each slaughterhouse. When the carcases are cut at the 12th rib, it scans them, and details how much marbling is in each side of beef. “It can do that in a factory that kills 5,000 head of cattle per day so it’s very efficient,” he said.

“In the US, about 20 years ago we started selling carcases on grids, just like Ireland. However, the Irish grid pays primarily on leanness and muscle. In the US they pay almost nothing for leanness and we get premiums for marbling,” Leachman explained. In the US earlier this year, the difference between a 420kg carcase of low-marbling beef and high-marbling beef was about $500. He asked: “What difference would that make to you here?”

Leachman highlighted that other countries are now starting to follow suit. “Australia already pays on marbling. Four years ago New Zealand decided they wanted to do away with their yield-based system and focus more on marbling so they could produce a higher quality product to compete better on the world market.”

Making the change

Marbling and fat content is based on genetics according to Leachman. But is it breed specific or can it be achieved across all breeds? “Apart from the double-muscling breeds, you can virtually take any breed and select it to get 70% of cattle at the high marbling level,” he said. The difficulty is that achieving this is going to take time, possibly 20 years or more. “I firmly believe if you can do this you are going to get paid more for it.”

The most obvious flaw in this idea is the fact that, right now, across the continent, the demand is primarily for lean beef and farmers in attendance questioned what is the point producing something that there is no market for? However, in response Leachman said: “That’s all going to change because the data I’m giving you is real. Nobody says ‘this is too fat I don’t want to eat it.’ There are people queuing up in the US to eat these steaks in restaurants. We can’t make enough of it.”

Industry criticism

“Your industry 20 years ago decided it would place a heavy emphasis on muscle and they thought they could manage eating quality by using technology. You adopted a EUROP grading system which paid on high muscle and high growth rate and how is that working? It’s not great because your product is not earning a premium on the world market. Our product is,” he argued.

“In the UK, obviously they are leaving the EU now and there are rumblings that they are planning to change the grading system. I’ve even learned recently that meat research centres in the UK are getting a lot of money from the industry right now to find out what is driving eating quality.”

With that, Leachman finished his argument and put very simply what he believed Irish farmers need to do in order to really create a competitive advantage on quality: “You make a standpoint to move towards an eating-quality-based grading system and you use your replacement index type systems to make sure you have cows that are really efficient and still produce a high quality product. It’s a simple recipe for success.”

Leachman on Irish breeding

Speaking about Irish cattle breeding, and in particular the ICBF, Leachman was very complimentary: “We haven’t come across a more comprehensive index anywhere in the world as the one you have here in Ireland.” However, he also pointed towards some areas that he would alter:

“One of the things that is not quite right in your index is milk. Is milk a trait where more and more is always better? No. Too much milk takes weight off the cow. There is an optimal amount of milk and for that reason you shouldn’t favour a half-dairy cow for a suckler herd. I guarantee when they take the feed costings of those females, which they haven’t done yet, they are not going to be five-star females, they are going to be one-star females. This index will come back in a number of years and tell you that they made a mistake and the best cows actually had a middle-range on milk.” These were startling words to hear for many of the farmers in the audience and raised some eyebrows.

Furthermore he said: “the other thing that is not on your index, is hybrid vigour. Fertility, longevity and production are all proven to be higher in cross bred cows. Now when I drive down the road, I can see that most Irish suckler farms are cross-breeding, but I don’t think it’s structured. If I have a beef production unit and I had three different breeds of bulls there, I would sort my cows so that they are as unrelated as possible to the bull so the progeny will have hybrid vigour. I think in the long run, ICBF will help you manage hybrid-vigour. It’s as important as the maternal index.

ICBF comment

Thankfully the work in terms of meat quality is well under way through our involvement in Meat Technology Ireland, an Enterprise Ireland-led initiative involving Teagasc, ICBF and the meat processing industry. We expect to be rolling out genomic evaluations for beef tenderness, juiciness and flavour in 2019, which will be a world first in the context of this important trait. Looking at milk in suckler cows, we have a replacement index that includes the benefits of the extra milk against the cost of producing it. Both the cost of cow maintenance and the cost of holding body reserves are included in the replacement index, with a combined index weighting of 41%, which should more than cover the cost of producing the milk, which has a weighting of 18%. Hybrid vigour is also an area we are acting upon. This year we launched a tool on the diary side called COW which includes additional benefits of heterosis (cross-breeding) – Andrew Cromie, ICBF technical director.