The Northern Co-operative Meat Company (NCMC) is moving to take advantage of its special business model which fits perfectly with Asian customers wanting food safety guarantees and direct supply relationships with farmers.
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The big Casino co-op, owned by 1500 livestock producer shareholders, is offering its supplier members premiums of 20 cents a kilogram (carcase weight) for veal, meeting new guaranteed pasture-fed requirements set by the Cattle Council of Australia and Meat and Livestock Australia.
NCMC bosses recently returned from China where they identified two potential major customers interested in Australian-raised veal if it can be independently verified as pasture-fed and free of hormone growth promotants.
The Casino abattoir is the first business to use the Pasturefed Cattle Assurance System (PCAS) with a labelled veal product.
The NCMC is the only red meat processor on the eastern seaboard operating as a co-operative.
NCMC chairman John Seccombe said the Chinese connections were immensley interested in its "co-op story" - the fact it was owned and run by farmers.
Incorporated in 1933, the service abattoir has at times been Australia's largest single processing establishment.
The company also recently acquired two new veal marketing businesses, Ramsey Meats and Manning Meats, and its veal section is now operating at capacity.
Chief executive Simon Stahl told a beef field day at Mallanganee this month the PCAS move was about driving value for the product members were turning off.
He said potential new Chinese customers were in online retail and the restaurant trade and, due to the sheer size of their market, it was perceived the greater percentage of the NCMC's veal business would go that way in future.
It was potentially a lucrative market due to increasing disposable incomes in China.
"Those with higher disposable incomes don't trust the local product and are very interested in Australian veal, but the big message was 'prove to us it is what you say it is'," Mr Stahl said.
"PCAS, with its third-party audited verification, is a way to prove our claims of differentiation."
Since its launch last August, PCAS, with it's HGP and antibiotic-free 'add on modules', has signed up more than a hundred producers.
It is designed to deliver an internationally-recognised standard to which “grass-fed” and “natural” brand claims can be attached.
The system has been delivering up to 20c/kg premiums for heavier cattle (over Meat Standards Australia price grids), led by Teys’ Australia-labelled beef products.
The NCMC premium over its conventional veal grid aims to significantly stimulate supply, although Mr Stahl acknowledged that given the additional costs to producers of taking the PCAS path, it would need to be a considered decision.
He said it was still to be determined if enough producers could deliver the volumes needed.
Initially the aim was 100 head a week, with the first PCAS kill scheduled for mid-year, targetting a carcase weighing 120kg (dressed).
Most product from the NCMC’s new veal marketing arms currently goes to China, Japan, Korea and Canada, but Mr Stahl said the new niche markets were “too good not to chase”.
Award-winning beef marketer Atron Enterprises has underpinned its Spring Grove brand on PCAS.
The company’s Heidi Hayes said Atron wanted more supplier numbers and was offering a veal or grown cattle option.
A PCAS workshop recently held in Casino for potential suppliers generated strong interest. Another is organised for April 23.
Contact Anthony Harris on (02) 6660 0772.