Chairman: Peter Gilmour 8th May 2015 We will cover ¡  The Wagyu value chain ¡  Getting into Wagyu – some options ¡  Making breeding decisions ¡  Registering Wagyu and performance recording ¡  DNA testing for parent verification and genetic conditions ¡  Marketing Wagyu ¡  Japanese conformation assessment -­‐ move to cattle yards Graham Truscott, Chief Executive Officer Wagyu Beef Value Chain GENETICS: EBVS INDICES Seedstock Producers WEANERS Commercial Producers FINISHED STEERS HEIFERS Feedlots FERTILITY MATERNAL GROWTH BRANDED BOXED BEEF Abattoirs/ Processors CARCASE Wholesalers Retailers EATING QUALITY Consumers Wagyu Beef Value Chain GENETICS: EBVS INDICES Seedstock Producers WEANERS Commercial Producers FINISHED STEERS HEIFERS Feedlots BRANDED BOXED BEEF Abattoirs/ Processors Wholesalers Retailers EATING QUALITY Supply Chain Pull-­‐through Consumers Wagyu Breed Descriptions Wagyu Breed Content Classification Wagyu Fullblood 100% The offspring of a Wagyu Fullblood sire and a Wagyu Fullblood dam whose forebears originate from Japan and whose pedigree shows no evidence of any crossbreeding. Purebred Wagyu F4 93+% Has greater than 93% Wagyu genetic content. For example, the result of at least four generations of crossbreeding using a Wagyu Fullblood sire and a Crossbred Wagyu F3 dam. Crossbred Wagyu F3 87+% Has greater than 87% Wagyu genetic content. For example is the result of at least three generations of crossbreeding, using a Wagyu Fullblood sire and a Crossbred Wagyu F2 dam. Crossbred Wagyu F2 75% Has 75% or higher Wagyu genetic content. For example is the result of at least two generations of crossbreeding, using a Wagyu Fullblood sire and a Crossbred Wagyu F1 dam. Crossbred Wagyu F1 50% Has 50% or higher Wagyu genetic content. For example the first generation of crossbreeding a Wagyu Fullblood sire and the dam of another breed. Fullblood Purebred F3 F2 F1 Definition Benefits: Commercial Producer ¡ 
PROFITABILITY! ¡ 
Indicative prices (ex GST) at this time are: !  Wagyu Fullblood 100% feeder steers 300kg @ $5.00/kg = $1500 (100% premium over Angus – the benchmark) !  Crossbred Wagyu F1 50% feeder steers 300kg @ $3.60/kg = $1080 (4o% -­‐ 50% premium over Angus) Benefits: Commercial Producer ¡ 
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Wagyu are more virile and fertile than Bos indicus and Bos taurus breeds. Wagyu have high calving ease compared to other breeds. Wagyu have excellent temperament. Good mothers when mature. Cow longevity, with cows remaining productive up to 13+ years of age. Benefits: Commercial Producer ¡ 
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Bull longevity, with bulls often used at 13+ years of age, resulting from their frame and athleticism preventing them from breaking down at earlier ages as other breeds readily do at 5 years of age. Leaner than Angus (so more efficient, contributing more nutrients to protein and marbling than to subcutaneous fat) No problems with eye cancer. Ability to handle a range of climatic conditions. In the North In the hot, broad-­‐acre, northern environment: ¡  Wagyu bulls retain their energy, and vigour better than other non Bos indicus breeds. ¡  Wagyu are more virile and fertile than Bos indicus and Bos taurus breeds. ¡  Good walkers, with very few bad feet issues ¡  Ability to handle a range of climatic conditions Benefits: Feedlots Wagyu perform well in feedlots, with particular benefits being: ¡  Fed: between 300 – 600 DOF
¡  Cope well with stress & travelling ¡  Excellent temperament for the feedlot environment
¡  Resistance to Bovine Respiratory Disease ¡  Handle heat stress better than many British breeds; and almost as well as Bos Indicus in a feedlot situation. Benefits: Processor ¡ 
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Wagyu carcasses are highly valuable have strong dressing percentage and high retail beef yield. High marbling delivers premium carcass value: 450 kg carcass – indicative prices at this time are: MS 3
$5.00/kg $2250 MS 4
$6.00/kg $2,700 MS 5
$7.00/kg $3,100 MS 6
$8.00/kg $3,600 MS 7
$9.00/kg $4,050 MS 8
$10.00/kg $4,500 MS 9
$11.00/kg $4,950 MS 9+
$12.00/kg $5,400 Benefits: Wholesaler/Retailer ¡ 
Carcass value at wholesale, including freight & delivery: !  450 kg carcass MS 9 @ 64% yield @ $55/kg ! $15,840 ¡ 
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Australia –virtually all leading restaurants offer Wagyu 80% – 90% Wagyu beef exported to high value markets Japan, China, Taiwan, Korea, Middle East, USA, Europe. Wagyu Beef Value Chain Seedstock Producers Commercial Producers Feedlots Abattoirs/ Processors Wholesalers Retailers $ $ $ $ $ $ FB $1500 $5000 $16,000 Consumers Target Markets – Feeder Steers & Heifers ¡ 
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AA Co. (QLD, Dalby, Emerald) Cabassi & Co. (QLD, Casino) Direct Meats (NSW, Casino) Elders International Greenham Tasmania JBS Australia (QLD, Toowoomba, Mungandi, Caroona, Griffith, Yanco) Macquarie Downs (QLD, Leyburn) Mayura Station (SA, Millicent) – Fullblood only Rangers Valley (NSW, Glen Innes) Stanbroke Pastoral Co. (QLD, Chinchilla) Warmoll Foods (NSW, Casino) Target Markets – F1 heifers ¡ 
For Commercial F2 production of steers & heifers ¡ 
For recipient dams ¡ 
F1 heifers – Live Export – with ILRIC Export Certification !  Elders International !  Livestock Shipping Services !  Wellard Rural Exports Getting into Wagyu Option 1: Terminal F1 ¡ 
Angus base herd – retain excellent maternal base 50% cow herd (youngest) – breed to Angus bulls Gives 25% replacement Angus heifers 50% cow herd (oldest) – breed to FB Wagyu registered bulls Delivers 40% -­‐ 50% premium F1 heifers sell for same price as steers – excellent embryo recipients, very high fertility
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Easy system, low risk, can revert to full Angus on next mating Getting into Wagyu Option 2: F1 cow herd ¡ 
Crossbred Wagyu F1 50% cow herd -­‐ highly fertile, excellent milk, more assured marbling in F2 ¡ 
Sell current cow herd, buy Wagyu F1 cows !  Cull cows $1500 !  Wagyu F1 cows ≈ $2,000 (if available) ¡ 
Excellent female base for Embry Transplant (ET) of Fullblood embryos ¡ 
Low risk Getting into Wagyu Option 3: Fullblood ¡ 
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Sell current cow herd, buy Wagyu Fullblood cows !  Cull cows $1500 !  Wagyu FB cows ≈ $3,000 (if available) Embry Transplant (ET) – FB embryos ≈ $500, implant $500 Longer term strategy, lack of cash flow. May switch part of cow herd to Wagyu Fullblood Alex McDonald, Technical Officer Graham Truscott, CEO FERTILITY MATERNAL GROWTH BULLS Seedstock Producers WEANERS Commercial Producers CARCASE FINISHED STEERS HEIFERS Feedlots BRANDED BOXED BEEF Abattoirs/ Processors CARCASE PROGENY Registration + Performance Data 200, 400, 600 Day WGT Feedlot Entry & Exit WGT) • Wagyu Genetic Analysis (BREEDPLAN) • EBVs -­‐ Predict Genetic Performance • Indices – combine EBVs to rank animals Ausmeat: CWT, Marbling , Fat Digital carcass imaging: Marbling, EMA, Marbling Fineness Wholesalers Retailers Consumers Wagyu Genetic Analysis Wagyu Registration ** Always use AWA registered bulls for Wagyu Fullblood and Crossbred Wagyu breeding – ensures verification Seedstock Producers Commercial Producers Feedlots Abattoirs/ Processors Wholesalers Retailers Consumers $28.60 -­‐> $23.10 Breeding animal registration – increases capital value: Fullblood: Registered > $2300 Unregistered ≈ $1000 $22.00 -­‐> $16.50 F1 : Registered > $1000 (live export or recip) Unregistered ≈ $700 (slaughter) Wagyu Registration Seedstock Producers Commercial Producers Feedlots Abattoirs/ Processors Wholesalers Commercial feeder/slaughter cattle : Commercial Registration and Wagyu Breed Verification– increasing demand from high value markets ($9 -­‐> $6) Retailers Consumers Breeder Registration – foundation of seedstock production Grand Sire Sire Grand Dam Animal Grand Sire Dam Grand Dam Wagyu Breeder Registration – 2 stage process 1. 
– correct parents DNA parent verification 2. 
Animal registration – certify details Russell Lyons, Science Leader, UQ AGL DNA Parent Verification ¡ 
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Pull a tail hair sample. Hair sample in sample bag and mark the animal ear tag identifier Complete UQ AGL spreadsheet -­‐ for each animal to be tested: identifier, sire case number, dam case number, sex, date of birth Send the sample bag and printed spreadsheet to UQAGL, and email the spreadsheet to UQAGL to advise them the sample is coming UQAGL conducts the parent verification, returns results to AWA copy to the submitting member. Results include: match/n0 match to the sire and the dam, plus the Case Number for that particular test. AWA invoices the member. Graham Truscott, CEO Registration ¡ 
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Just after birth or at weaning/marking Capture basic information about the animal: !  Dam details: AWA Animal Identifier, Cow Fate (eg Sold, Died). !  Sire details: AWA Animal Identifier, Mating Date and Service Code (Natural Paddock or AI) !  Calf details: Name, Date of Birth, Grade (F for Fullblood, P for Purebred, 3 for F3, 2 for F2, 1 for F1) Year letter (eg. K for 2014), ear tag/tattoo number (eg. 001) Sex, Horn (defaults to dehorned), Colour (Black or Red) Calving Ease, Twin status, Birth information (Birth Weight, Management Group, Fate) ET status DNA Case Number – of the DNA Parent Verification ¡ 
See AWA Bylaws for further information Registration ¡ 
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After registering the animal AWA provides a unique Animal Identifier which it uses to refer to that animal in all communications and computer systems. The Animal Identifier is composed of: [Herd Identifier] [Grade] [Year Letter] [Tattoo] eg. ABC F K 00001 Registration Methods ¡  SMARTREC on-­‐line: fully integrated DNA parent verification and registration system ¡  On-­‐line: through the AWA website ¡  Batch: Spreadsheet based batch registration ¡  Paper-­‐based W1 Wagyu Calf Recording & Registration Form Registration Methods ¡  SMARTREC on-­‐line: fully integrated DNA parent verification and registration system ¡  On-­‐line: through the AWA website ¡  Batch: Spreadsheet based batch registration ¡  Paper-­‐based W1 Wagyu Calf Recording & Registration Form AWA Website Restricted Login ¡  Both SMARTREC on-­‐line and On-­‐line registration require access to the AWA website www.wagyu.org.au Restricted Login section ¡  Apply to the Registrar for: !  Usercode !  Password SMARTREC Based on Allflex Tag Bundles ¡  Secure animal ID System -­‐ linked NLIS tag + Visual ear tag + TSU ¡  Reduces human error as there is no need to hand write animal ID (and no transcription of handwriting at the lab) ¡  TSU contains preservative buffer – can be sent chilled from anywhere in Australia Tissue Sampling
Technology
By Allflex
www.allflex.com.au
TSU – Tissue Sampling Unit Cutter Loading apparatus Tube with buffer Tissue Sampling
Technology
By Allflex
www.allflex.com.au
TSU – Tissue Sampling Unit Loading apparatus Tube Visible Sample Cutter Bar Code Tissue Sampling
Technology
By Allflex
www.allflex.com.au
SMARTREC -­‐ Ordering Allflex tag bundle NLIS/tag/TSU Order Tags Breeder Tag Invoice AWA Tag Order “Bucket” File Supply Tags & Bucket File Allflex SMARTREC -­‐ Ordering Allflex combination NLIS/tag/TSU -­‐ Match Barcode -­‐ Analyse DNA Sample Animal Record Animal Records, -­‐ Parent Verified Sire/Dam TSU Barcode & DNA Test Order Pending Website Sire/Dam Groups Tag Pick List Animals Match animal to pick list: -­‐ sire/dam group -­‐ DNA test order Confirm RegistraJon & Invoice SMARTREC -­‐ Animal Registration APPLY TAGS BREEDER UQ AWA Registered Animals On-­‐line Registration ¡  Access the AWA website www.wagyu.org.au ¡  Enter Restricted Login section ¡  Enter: !  Usercode !  Password ¡  Set up a batch of a number of animals -­‐ enter for each animal: tag/tattoo, sire, dam, DNA case no. ¡  Submit batch Spreadsheet Based Batch Registration ¡  Open AWA CSV regoTemplate ¡  Contains instructions and all the registration input data fields. ¡  Multiple calves may be listed in the spreadsheet ¡  Email to the Registrar at offi[email protected] for loading as a batch into the AWA registry system. Paper Based Registration ¡  Manual calf registration ¡  Paper-­‐based W1 Wagyu Calf Recording & Registration Form ¡  Contains all the fields for data input ¡  Multiple calves may be entered ¡  Mailed to the AWA Registrar along with the DNA Parent Verification results obtained from UQ. ¡  Not recommended -­‐ inefficient -­‐ additional manual entry surcharge of $2.00 per calf FERTILITY MATERNAL GROWTH BULLS Seedstock Producers WEANERS Commercial Producers CARCASE FINISHED STEERS HEIFERS Feedlots BRANDED BOXED BEEF Abattoirs/ Processors CARCASE PROGENY Registration + Performance Data 200, 400, 600 Day WGT Feedlot Entry & Exit WGT) • Wagyu Genetic Analysis (BREEDPLAN) • EBVs -­‐ Predict Genetic Performance • Indices – combine EBVs to rank animals Ausmeat: CWT, Marbling , Fat Digital carcass imaging: Marbling, EMA, Marbling Fineness Wholesalers Retailers Consumers Wagyu Genetic Analysis Graham Truscott, CEO Market Planning ¡  Define Market Position: where you want to be in the market – “ Price maker, not price taker” ¡  Set Objectives ¡  Define the Product for sale: !  Seedstock: ▪  Registered bulls/females ▪  Semen ▪  Embryos Market Planning ¡  Define the Product for sale: !  Commercial cattle: ▪  Breeding females – Fullblood, F1 ▪  Feeder steers ▪  Export steers ▪  Finished carcasses ▪  Branded beef Market Planning ¡  Define the Target Market – who will buy your product? ¡  Define you Marketing Channels – how will you reach your Target Market? ¡  Research your market: !  www.wagyu.org.au/Marketplace !  Call contacts and build confidence !  Attend AWA Field Days and National Conference – build contact networks Market Planning ¡  Establish your Brand – the image you want your customers to s ee and the emotions you want them to feel when they think of you ¡  Establish Product Pricing With a Market Plan Now you are ready to: ¡  Reach out to the market ¡  Find your buyers ¡  Create “top of mind awareness” for your brand and products Marketing & Communications Strategy Wagyu Update Wagyu eNews Wagyu website Rural Media releases National Conference Pop% 2.5% 13.5% 34% Australian Beef Industry No.
1500
8,100 20,400 Cum.
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9,600 30,000 34%
20,400 50,400 Source: Rogers Diffusion of Innovation Theory 16% 9,600 60,000 Advertising your Brand/Product ¡  Immediate – AWA Email Network – classified buy/sell advertisement !  Reach: 500 specialist Wagyu members domestically and in 25 countries Advertising your Brand/Product ¡  Monthly – AWA Wagyu eNews – points to website !  Reach: 1500 specialist Wagyu producers, feedlots and processors domestically and in 25 countries plus broader industry contacts Wagyu Update magazine ¡  4 Monthly – AWA Wagyu Update magazine – strongly demanded by members !  Reach: 500 specialist Wagyu members domestically and in 25 countries Advertising your Brand/Product ¡  Continuous – AWA Wagyu Website -­‐ central repository of AWA Wagyu information !  Reach: 4300 visits per month Advertising your Brand/Product ¡  Continuous – AWA Wagyu Website -­‐ On-­‐line catalogues: !  Live cattle ▪  Private Treaty ▪  Public Sale – can extract Lot data to your printer to develop an expanded catalogue !  Semen Reach: 4300 visits per month Advertising your Brand/Product Advertising your Brand/Product ¡  Annual Milestone Event – AWA Wagyu Fullblood 100% International Sale: !  Culminates at National Conference !  Advertised domestically through: ▪  All AWA communications channels ▪  Fairfax Media – Rural Press !  Internationally through: ▪  AWA communication channels ▪  Wagyu World magazine and email network ▪  American Wagyu Association magazine and email network -­‐ Reach: world-­‐wide Feeder Steers & Heifers – sell direct to: ¡ 
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AA Co. (QLD, Dalby, Emerald) Cabassi & Co. (QLD, Casino) Direct Meats (NSW, Casino) Elders International Greenham Tasmania JBS Australia (QLD, Toowoomba, Mungandi, Caroona, Griffith, Yanco) Macquarie Downs (QLD, Leyburn) Mayura Station (SA, Millicent) – Fullblood only Rangers Valley (NSW, Glen Innes) Stanbroke Pastoral Co. (QLD, Chinchilla) Warmoll Foods (NSW, Casino) Shogo Takeda, Takeda Farms Hiro Numadate, Iwasaki Herd Manager