Forward Supply Contracts for the Western Australian Sheep Meat Sector

The Sheep Industry Business Innovationproject

Opportunities for Individual animal management of sheep in Western Australia – report summary

Nathan Scott and Helen Mcgregor, Achieve Ag Solutions

Figure 1Electronic tags are printed with a serial or visual ID number on the outside of the tag

How can the Australian sheep industry benefit from EID?

The capability of EID equipment has significantly improved in recent years, while prices have decreased. In Victoria it became mandatory from 1 January 2017 to EID tag sheep and goats born in that year for traceability purposes and there has been an increase in producer uptake of the technology for on-farm use.

Traceability and broader biosecurity applications

Accurate reliable data opens opportunities for improvement across the supply chain.

Livestock commodity markets continue to experience price rises and hold a stable and significant role in the Australian agricultural economy. It is important to demonstrate a robust and repeatable system of traceability to our trading partners.

In any major exotic disease outbreak, the time taken to identify those animals affected and any potentially infected cohorts which have been within close proximity is vital. Timely identification will not only limit the spread of disease, but also allows more rapid proof of eradication.

Due to the impacts of export restrictions, the most significant cost to the economy resulting from a disease event may be the time taken between discovery of a disease incursion and final proof of eradication. The most likely delay in identifying, tracking and eradicating an exotic disease outbreak will come from human error in recording information for traceability. An electronic recording system using EID tags will significantly reduce the reliance upon human input into the system, as has been demonstrated with the cattle National Livestock Identification System (NLIS).

Animal management and monitoring

Producers can use EID to undertake individual animal management and monitoring, in a way which is more accurate, easier, faster and ultimately more likely to happen than using visual or manual systems of data capture. With the increased capability of handheld readers, producers can see information displayed on the screen in real time and implement decisions based upon previously collected data.

Any group of animals will have poor performers, average performers and superior performers for a given trait (Figure 2).

Figure 2Example of the distribution of animal performance within a flock for a given trait(s)

Figure 3(A) traditional mob-based selection and (B) individual animal selection

The poor performers may cost the enterprise money, and in a traditional mob-based management system they may remain for a number of years without being identified (Figure 3). Making management decisions and analysing performance based on the average group of animals rather than the individuals themselves can unfairly disadvantage some animals while overstating the performance of others.

Monitoring individual animal performance can inform management decisions to allow an animal to express its real genetic potential. While heritability is low for fertility traits, the repeatability is more reliable if the animal is given the chance to express its genetic potential. Even low heritability traits will still achieve some cumulative genetic gain if selection pressure is applied.

EID can be used to collect data on:

Birth type and mob details. This activity doesn’t require electronic reading of the tags. The producer tracks the sequence of tags applied to each mob of lambs at lamb marking and can assign birth type or mob information.
Fleece weighing and fleece testing. Using EID reduces errors, making data capture easier, faster, and more accurate.
Individual live weight recording. Collecting live weight can be done as part of existing weighing operations with the addition of EID recording equipment. While the information can be useful, the ease of data capture can also see producers collecting significant amounts of data which will never actually be utilised.
Individual ewe scanning results. This data may be used to apply selection pressure (remembering that heritability of fertility traits is low, while repeatability may be a consideration), or to provide feedback upon management and nutrition.

Figure 4 Pedigree MatchMaker

Pedigree MatchMaker (PMM). This is a walk-by system that uses EID tags to estimate associations between ewes and their lambs, and provides the ability to trace individual animal pedigree.
EID-enabled Walk Over Weighing (WOW). Weights are recorded against individual animals as they walk across a platform in a single file entrance, similar to that of PMM. There are quite a number of constraints and challenges associated with WOW. Therefore, for the majority of intensively run sheep operations, weighing through the standard yard system remains the most cost effective and accurate option.
Kilograms of lamb weaned per ewe. Through the use of PMM and also recording individual weaning weights of each lamb, a flock can be ranked based on the kilograms of lamb produced by each ewe, and the worst performers can be culled.

Figure 5Walk Over Weighing design

Treatment recording.With ever increasing demands and consumer expectations around safe use of chemical treatments, EID introduces an ability to further refine the process to individual animals.
Simple stocktake. When stock theft is suspected, accurately identifying the last known time that the stock in question were present on the property can be difficult or even impossible without EID. This process also facilitates the collection of mortality data.
Anything to be recorded. With an EID system, you can record anything that can be measured objectively or subjectively. This is particularly beneficial in a stud situation where many traits need to be recorded.

Carcase tracking and processing feedback

Carcase feedback helps develop clear market signals that reflect consumer demand and expectation. A combination of technology to provide accurate assessment of carcase traits and quality could be integrated with EID to allocate this to the individual carcase. Producers could use this to close the gap with respect to transparency in carcase information. From the processor perspective, it provides an opportunity to request and enforce a strong and clear market signal based on consumer demand and preference. Both perspectives are important for improving supply chain function and maturity.

A number of Victorian processors are currently installing the required infrastructure to capture individual carcase data, including animal health data. Hook tracking, Dual Energy X-ray Absorptiometry (DEXA) and other technologies such as hyperspectral cameras will provide more accurate and in-depth carcase data with respect to meat eating quality and physical carcase traits (e.g. weight and fat depth). The systems will also provide an opportunity to correlate this with on-farm practices and live animal data.

What opportunities does EID present to the Western Australian sheep industry?

While much of the discussion around mandatory tagging has focused on the ability to trace and contain an exotic disease outbreak, there are potential opportunities for competitive advantage through better meeting consumer expectations.

EID can play some role in improving biosecurity, product integrity, product quality, animal welfare, and attracting the next generation of farmers. This illustrates the difficulty faced when looking to quantify the cost benefit of EID.

The introduction of objective measurement to the processing sector in the areas of lean meat yield, fat, and meat eating quality could, in conjunction with on-farm measurement, transform the sheep meat supply chain and align closely with consumer expectations. With Victoria already positioning itself well to take up the opportunities presented by hook tracking and DEXA, there is potential for eastern states lamb producers to achieve competitive advantage on both a domestic and world stage.

A survey of Western Australian producers in 2014 found that 4% of respondents were currently using EID in some form, with a further 16% indicating that they were considering the use of EID.

How does a producer decide that EID will benefit their business?

Every piece of data costs money to collect and manage, and has the potential to deliver value (money or greater efficiency). The first step to assess the potential of EID for a livestock enterprise is to understand the business and/ or breeding objective of that operation.

The objective should be specific, measurable, achievable, realistic and time-bound (SMART). For example, “I want to mark 145% lambs, turning off 21 kilogram (kg) carcases by 6 months of age, maintaining moderate mature ewe weights under an average of 70kg, and running a stocking rate of 14 dry sheep equivalents (DSE)/hectare, all by 2022.”

To achieve the business / breeding objective:

What trait, treatment, or measurement needs to be collected?
Is it already collected?
What EID equipment would be needed to collect it and how much would it cost?
Could a contractor do the task?

For some producers, this process will highlight that there is no immediate role for EID, while for others the role may be obvious and significant.

For many enterprises, the only role that EID can play is to better inform management decisions. This is because they are in a rebuilding phase where all ewes are retained, or where the reproductive rate of the flock is insufficient to allow opportunities to apply effectual culling practices. One of the greatest constraints to the effective use of EID is the inability to actually apply selection pressure.

Often EID tasks are sporadic in nature and therefore do not require ownership of all of the equipment required, so both equipment hire and use of a contractor should be considered as alternatives to purchasing equipment.

The business should assess the data collection to be undertaken and plan a data management system that will suit the business needs, the producer’s capability and desires. While simple tasks can be done using common software options such as Microsoft Excel, software developed specifically for managing livestock data will provide a more complete and reliable data management option.

What is the cost benefit of EID?

Decisions make money, not an EID tag. Other than an increase in labour efficiency for tasks already undertaken prior to implementing EID, there is little return that can be attributed directly to the investment in the tag or technology itself. It is the quality of decision making that has an enormous impact upon the value garnered from the use of EID.

EID can trigger a change in decision making that can derive a direct cost benefit. The change may be delivered through accessibility to more accurate, consistent, and meaningful data, but there cannot be a direct benefit associated with EID in achieving this practice change.

While labour saving is easily calculated for efficiency gains in a given task, placing a value upon other gains is not as simple.

Cost benefit: labour-saving

If looking simply at the labour saving achieved for a single task, Table 1 illustrates the differences in labour cost associated with recording individual live weights using visual tags, as opposed to EID tags.

Table 1Costs comparison of using visual and RFID (EID) tags for recording live weights of individual animals (Sheep CRC 2006)

Operation 1
(collecting weights only) - visual tags / Operation 1
(collecting weights only) - RFID / Operation 2
(collecting weights
and data cleaning) – visual tags / Operation 2
(collecting weights
and data cleaning) – RFID
No. of sheep / 700 / 700 / 600 / 600
No. of labour units / 3 / 2 / 3 / 2
No. of man hours / 11.67 / 4.67 / 13.5 / 3
Cost @ $40 per hour / $466.80 / $186.80 / $540 / $120
Cost per weight recorded / $0.67 / $0.27 / $0.90 / $0.20
Estimated error rate / — / — / 5% / 0.05%
No. of correction needed / — / — / 30 / 0.3
Time/error / — / — / 0.1 / 0.1
Hourly rate for data management / — / — / $80 / $80
Cost of time for tag correction / — / — / $240 / $2.40
Cost per unit correct data / — / — / $1.30 / $0.20

Cost benefit: extra productivity

Cost benefit was also examined by considering how much extra productivity was required per ewe to achieve a 3:1 return on the cost of the equipment, assuming a 10-year equipment lifespan, and not factoring in opportunity cost, finance cost or a cost differential between EID and visual tags.

For example, if a producer running 2000 ewes was to invest in $6000 worth of EID equipment, then the extra productivity that would need to be achieved per ewe to produce a 3:1 return on investment in equipment would be $0.90 per ewe.

If that same producer is running a prime lamb operation, then with lamb prices at $4.50, the producer would need to increase productivity per ewe by 0.2kg of carcase weight. If the same concept is applied to a wool production enterprise assuming a wool price of $12/kg clean, the producer would need to increase wool production by 0.07kg clean or approximately 0.11kg of greasy wool per ewe.

What problems can users of EID experience and how are they managed?

There are a number of factors which have the potential to limit performance or implementation of EID equipment, or data capture on-farm. Common issues include:
Data capture process: needs to be reliable and repeatable (e.g. consistent curfew period before weighing animals, using the same protocol each time to weigh fleeces).
Bluetooth connection: check that the device is turned on and connected in the right order, always check after a few sheep that the equipment is recording properly.
Battery failure: check batteries are fully charged before the event, and that there is a backup in the case of a flat battery.
Metal interference: remove metal from the entire read area.
Electrical noise interference: eg another reader, laptop, phone charger, powerline.
Multiple tags within read range: e.g. animals presenting two-abreast past the reader, or impact of metal interference on reader.
Inappropriate selection or use of equipment: get independent advice about the equipment before purchase and have realistic expectations of equipment capability.

This publication is a summary of a report commissioned by the Department of Primary Industries and Regional Development’s Sheep Industry Business Innovation (SIBI) project. To view the full report go to agric.wa.gov.au/opportunities-individual-animal-management-sheep-wa

This project is supported by Royalties for Regions.

Disclaimer:Mention of product names should not be taken as endorsement or recommendation.