Highland Beef Pastoral: A good hedge for market-weary producers

Highland Beef Pastoral Company, which manages herds in Australia to supply a premium grassfed product into the United States with certified animal welfare and sustainability traits, has pioneered an innovative collaborative supply chain that is ticking both those boxes.

And in a year where saleyard price volatility has been very sharply felt by producers, it's providing a stable, set income stream that allows for longer-term planning and investment.

Highland Beef purchases weaners, generally around the 300 kilogram mark, and pays producers to fatten them on a set per-kilogram basis.

The focus is on crossbred animals from British breeds, with Angus featuring strongly.

Highland Beef buys mostly from the farms it works with but also from others to bring onto a property.

Animals are slaughtered at 500-plus kilograms and must meet strict specifications under the Never Ever program, including no hormones, no antibiotics and 100 per cent grassfed.

Highland Beef typically has around 60 to 70 farms on its books, from Goondiwindi in southern Queensland to Colac in Victoria.

Between 500 and 750 animals are slaughtered each month, with primals sent to US retailers who then cut into portions for their own brands.

Managing director Murray Richardson said it was a different way of looking at a supply chain.

"We are allowing customers to have a relationship back to the farm - there is no doubt about the strength of the interest in traceability of food in overseas markets," he said.

"In other parts of the world, where they don't have the same integrity systems we have in our cattle industry, people just don't trust claims without transparency.

"We supply boxed meat but our product is transparency, not beef."

Highland's customers can, at any time, access their system to see the product's journey right back to the farm it from where it originated.

What is also interesting those customers now is how the Australian farmer is being treated.

"A lot of the farms we buy animals from need the cash flow from selling their weaners each year but still have grass to grow them out," Mr Richardson said.

"The fee we pay on a per kilogram basis to fatten the cattle is a guaranteed rate, so producers have a portion of their herd with a defined return. We are effectively providing an additional, alternate market.

"It makes a lot of sense to not have 100pc of the business in a price-taker, all-risk market, as this year has demonstrated."

The combativeness in beef's supply chain is renowned and Highland says it is effectively absorbing that while connecting the farm to the consumer.

"A customer who wants a piece of beautiful meat needs the farm piece, the processor piece, the retailer piece," Mr Richardson said.

"People are genuinely interested in how the supply chain model can be changed to make the returns fairer."

It's latest venture is starting a small herd in the US.

"We've effectively created our own NLIS (national livestock identification system) in the US to deliver the transparency and traceability customers are demanding," Mr Richardson said.