2025, Volume 33, Paper 3
ISSN: 1883-5675
The ALMTech Project, Phase 2: Revised Economic Evaluation of the Potential Benefits
Garry Griffith – School of Agriculture, Food and Ecosystem Sciences, University of Melbourne, Parkville; and Centre for Agribusiness, University of New England, Armidale
Abstract
The objective of this paper is to present a revised analysis of the expected net benefits to the Australian beef, sheep meat and pig meat industries of the R&D program Advanced Measurement Technologies for Globally Competitive Australian Meat (ALMTech), that was funded over the period 2016-2023. The current analysis updates a previous study completed in 2020 (Griffith et al., 2020, 2022) on Phase 1 of the program. It follows the same general approach and uses the same sources of input data and the same equilibrium displacement modelling tools to generate annual changes in producer and consumer surplus. Adoption profiles are then used to predict benefits out to 2040, R&D and user costs are estimated, all values are discounted to a common 2023 time period, and NPVs and benefit cost ratios are calculated. Major changes in this current analysis are: (a) MLA data for R&D costs for animal health that is directly related to objective measurement have been accessed, so the original omitted scenario on on-farm reductions in animal health costs has been added back in; (b) a new scenario based on savings from offal rejection has been developed, a new scenario has been added for eating quality developments in sheep meat, and the on-farm benefit calculations have been revised upwards; and (c) some of the adoption profiles have been changed to account for the recent rapid developments in accreditation and uptake by processors, and to better reflect the more optimistic longer-term trajectories developed in earlier MLA reports. The estimated NPV for net benefits was $858 million, while the discounted R&D cost was $128 million. The MLA Objective Measurement program resulted in a discounted net benefit of $730 million with an estimated BCR of 6.7:1; for the ALMTech component program only it was $123 million with the same BCR. The estimated NPV of net benefits of $730 million estimated in this report is somewhat higher than that estimated in the Phase 1 report ($510 million) (Griffith et al., 2020), with changes in adoption profiles being the main difference.
Keywords: carcase measurement technologies, value of information, livestock industries, Australia
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