Wagyu Beef for Firstlight Foods

Hawke’s Bay based company Firstlight Foods is producing grass-finished marbled Wagyu beef for export, with market returns of $6/kg.

The Firstlight Wagyu business is identical to the successful Firstlight Venison business which started in 2005. Farmers own half of the business with Firstlight Foods owning the other half.

Mike Glazebrook is a farmer who is running 125 rising three-year-old Wagyu steers on his 100ha Maraekakaho farm, which is part of a 700ha farm business he runs.

Half of the cattle have been on the farm since April and May 2011, and the other half since spring. None have been killed yet and Mike is looking to kill some this coming autumn and winter.

At the moment the steers are weighing at an average around the early 500kg level, and have to get up to about 640kg.

He has been farming Friesian bulls for a long time but on this block of land particularly didn’t want to run bulls because they dig holes, and cause erosion in the light riverside soils.

As a result he was looking for a prime steer option to replace the bulls, and is trying the Wagyu steers first. “I’m just getting to understand them and their temperament. You have to get to know them and how to handle them.

He is also interested in running Wagyu heifers, which he says may suit his land better, as they are finished to lighter weights.

The cattle are ticking along and running on new pastures in a newly developed block of land alongside the Ngaruroro River. “It’s a work in progress,” Mike says. He is sowing high performance pastures and using feed crops as the land is being developed.

Firstlight Foods began its grassfed Wagyu business in 2009, and processes cattle through Greenlea Premier Meats in Hamilton.

Bulls and semen are supplied to Firstlight Wagyu by Wagyu Breeders, under an exclusive arrangement.

Firstlight is building the business to involve 30 farmers and to process 10,000 cattle a year and sees the potential for growth beyond this.

Farmers involved are either finishers or breeders; some are both. Shareholders in the group pay $10,000 to join the company.

The cattle are bred throughout the North Island, and mostly finished in Hawke’s Bay and Manawatu. Farmers as far afield as Northland and the South Island are now also coming on board.

Firstlight’s farmer breeders mate at least 200 Angus cows or Friesian/Kiwi dairy cows to purebred Wagyu bulls/semen, producing weaner cattle which are sold to finishers at prices set a year ahead.

The system is geared towards a 12-month supply, so having the animals spread geographically across the country spreads climatic risk.

Finishers take weaner steers and heifers through to between two and three and a half years old, with target liveweights of 500kg for heifers and 650kg for steers.

Because the Wagyu animals are laying down intramuscular fat, they grow 5-10% slower than conventionally bred cattle.

Export market returns for the grass fed marbled Wagyu beef which Firstlight produces are now approaching $6/kg despite the current market and fluctuating exchange rate. These returns are about 12 months ahead of what the company had forecast.

The best of Firstlight’s Wagyu beef is pitched at a higher price in the market than grain-fed beef, and there’s no other product like it in the world.

It is as juicy and tasty as grain fed and the company is taking advantage of the swing away from industrialized grain-fed beef. Firstlight is exporting to Japan, Europe, Russia, the USA and other small niche markets around the world.

The high marbling scores of the Wagyu animals finished on grass is the key point of differentiation for the product.

Typical grass-fed animals have an average marbling score of 1 or 2. The Wagyu producer group cattle have an average marbling score of 4.5, on a scale of 1-9.

High quality retail customers prefer a lower level of marbling at 3-6, while chefs prefer more marbling, with a score of 7-9.

Of the thousands of Wagyu animals processed to date, 5% have a score of 2, 75% have a score of 3-6 and 20% have a score of 7-9.

The returns are giving a good premium above standard beef prices, and are fixed 12 months in advance. It’s all about a long-term sustainable pricing policy.

Base payments to farmers are based on the marbling score of their animals. They aim to pay out 80% of the total market return in base payments to the finishers 60 days after slaughter, which is $4.50-$5/kg. The remaining 20% of the payment up to $6/kg is retained in the producer group pool and at the end of the financial year is split between the finisher and the breeder.

Being part of the Wagyu producer group also gives access to customers from overseas and in setting the direction of the business.