AUSTRALIA’S beef industry has to find a way to capture and utilise genetic information far deeper into the supply chain that just breeding better bulls if it intends to be the Apple or Facebook of the animal protein world.
The roundabout we are currently on, dominated by continual talk of who owns data and how it should be stored, is leading us down a path of being run over by our competitors in the same way Netflix left Blockbuster in its wake.
Prominent beef agribusiness leader Jason Strong used the stories of some of the most dominant world businesses to build an argument that beef has to make fundamental changes to go forward on genetics and livestock breeding.
Linking genetics to the end product and the consumer was the way to unlock its enormous potential, he said.
Speaking at a Meat and Livestock Australia genetics forum in Brisbane yesterday, Mr Strong said global demand for red meat protein was continuing to grow and the opportunities right across the beef supply chain were huge.
“To realise even part of that we have to be better at delivering consistent, high quality products and genetics can to play a significant role in that,” he said.
Right now, however, it does not.
The impact and use of genetics is heavily weight at the front end of the supply chain, according to Mr Strong, who has just taken over the reigns as chief executive officer of large-scale Queensland grainfed beef producer Smithfield Cattle Co.
“We have very little mechanism to use genetic information or tools to influence our decisions past breeding better bulls and frankly that’s not good enough,” he said.
“We find out right at the end the benefit of the decision we made right at the start.
“We know there is a massive difference in genetics value if we can exploit it, if we can use it to make decisions about appropriate markets, to respond to weather conditions and changing environmental situations, to know if we have more or less grass how we maximise the value.
“We’ve done a fantastic job of applying technologies to breed better bulls but we’ve fallen short as far as the influence of genetics across the value chain - at the moment is very limited.”
Respond . . . or someone else will
BEEF can take a lot from the stories of businesses that once had the world at their feet but didn’t respond to what was coming down the pipe, Mr Strong said.
“There is a mass of examples of business that have been well-established, have world leading technology, have made massive gains over recent times but then fall in a heap because they’ve become too confident, too arrogant and felt they could ride out the challenge,” he said.
Uber and taxis, Facebook and newspapers, hotels and Airbnb are just a few.
American home movie giant Blockbuster is another.
Mr Strong explained that Blockbuster had the opportunity to buy Netflix for a very low price many years ago but made the call that download speeds would never get to the point where people would routinely watch that sort of content online.
Now Netflix has gone through the roof and Blockbuster doesn’t exist.
Nokia was once the world leading supplier of mobile phones.
“In 2007, at the start of the smartphone revolution, Nokia had all the technology - touch screen, apps - before the others, but their move was to say ‘we will decide when this is put in place’,” Mr Strong said.
Nokia’s famous quote: “We did nothing wrong but somehow we lost” says it all.
“And it sounds a lot like us,” Mr Strong said.
“Are we going to be saying ‘I’ve been putting data in the system, I know all about my bulls but my customers are now making decisions using things I never thought of.’
“There are also plenty of examples of industries in much worse positions that what we are in who have responded.”
The thought was electronic store company Best Buys was doomed - it would be quickly run over by Amazon.
Yet it changed its business model, lifted its online presence, realigned its stores to provide goods in a much more efficient way, and prospered.
“All these examples should give us guidance about the need for changing the way we do things,” Mr Strong said.
“We have world leading systems but we have to keep evolving.”
Give up control
CONTENT control is rapidly becoming less important, Mr Strong argued.
If you think about how things have changed in other sectors, that is clear.
A whopping 25 per cent of the total US advertising spend now goes to Google and Facebook.
Apple is only 11pc of the smartphone sales volume but 79pc of the profit.
The supply of less that 50pc of the parts that make an apple iphone are controlled by Apple.
Facebook doesn’t generate their own content but they supply more than everyone else in the world put together, Mr Strong said.
“There is a massive amount of genetic data and we’re arguing about what is stored where and who owns what before we’ve even done anything with it,” he said.
“The most important thing is what comes out the other end - how we actually use better information to make better decisions.”
Service, conveniences, information and utility will be the drivers of value, he said.
“We have to find a way to understand the customer. We have all these fantastic tools around pasture and weather forecasting and growth rates but we have to find a way to get off the current roundabout we’re on revolving around how we manage genetics information.
“What people need, when and where they need it must be the driver of making better, more timely decisions.”
The story Is Australian beef about to be “run over” on the genetics front? first appeared on Farm Online.