The how and why of AACo's unique Mitchell composite

What started as a sheep and wool operation 200 years ago is today a cattle herd of 433,000, with a strategic balance of properties, feedlots and farms, comprising around 6.5 million hectares of land in Queensland and the Northern Territory, which equates to around 1 per cent of Australia's land mass.

The jewel in the crown is the Wagyu herd. AACo is now one of the world's biggest Wagyu producers, with up to 50,000 Wagyu going through its branded beef program on an annual basis.

But AACo's composites, called Mitchells after the most abundant grasses on its properties, are unique and when crossed with the Wagyu, AACo has something no on else has.

AACO managing director and chief executive officer David Harris said Mitchells were the answer to: How do you find more productive cattle that can live in the north?

"It wasn't about specific breeds. We bred for traits," he said.

"The most significant of these was reproductive capability and carcase quality.

"They are traits that speak to both the producer and the consumer. Neither focus on their own will deliver sustainable profitability."

Shorthorns were the breed of cattle the first AACO ship from Britain carried.

In 1824, the British Government decided there was a good enough business case for AACo in Australia and enabled the company by providing a one-million acre land grant. It was to be primarily a sheep venture.

By the end of 1950s, however, the business had 140,000 sheep and 136,000 cattle but 75pc of income was derived from cattle.

The early Shorthorns were chosen for their docility, strong maternal values and quick and efficient growth, perfect for starting a new herd from scratch, the thinking was.

In the 1950s, as Mr Harris tells it, an AACo superintendent travelled to the US to secure poll Shorthorn bulls but was so impressed with Santa Gertrudis that instead he set about gradually replacing AACo's Shorthorns.

A Santa Gertrudis stud was set up at Goonoo Goonoo, Tamworth, NSW.

"It was all about weight on the hooks then," Mr Harris said.

It took until the 1980s before the Shorthorn was completely bred out but by then it was evident the Santas could not perform everywhere and so they were replaced with Brahmans on the principle Brahmans adapt and thrive to any environment with high heat tolerance, walking capability and disease and parasite resistance.

"And with those traits, it made sense to have Brahmans form a part of our unique composite animal that we designed to thrive in the Northern Australian climate," Mr Harris said.

The Mitchell is a mix of at least six breeds: Brahman, Santa Gertrudis, Charolais, Red Angus, Senepol and Bonsmara.

Over 200 years, AACO has invested heavily in cattle genetics.

"Our vertically integrated supply chain allows us to own the full life cycle, and take greater control of the herd, aiming for constant improvement," Mr Harris said.

"The essence of our breeding programs is that we - at scale - taken quantitative measurements from the full production system starting with stud breeding and Growsafe (for feed efficiency) through to reproduction, feeding efficiency and carcass data to develop what we think is a full picture of any animal's capability.

"We use that information to refine our thinking and go around again.

"There's no rocket science in the principles but what I think is our strength is the scale and the integrity of the data of the full system, not just parts of it.

"We've done that over many decades to get to where we are now."

It was a consumer focus that prompted the move towards becoming a premium beef producer, and in another example of adapting, the decision was made to move into Wagyu with the purchase of the Westholme Wagyu herd in 2006.

AACo's Wagyu brands Darling Downs and Westholme are award-winning and globally recognised.

Wagyu bulls are joined with Mitchell cows and this F1 is exclusive to the Westholme brand.

The genetic program is significant, with the current genomics program foundations set around 10 years ago with the introduction of Growsafe.

Over that time, more than 60,000 pedigree Wagyu have been evaluated and more than 67,000 animals genotyped across the Wagyu and Mitchell cattle.

"We have a selection index that matches our supply chain costs and returns against the most important traits for us," Mr Harris said.

"Some of our focus area includes feed efficiency, carcase quality and marbling, along with early growth.

"In total we evaluate 16 traits in Wagyu and 32 in Mitchells with a focus on fertility and efficiency in the Mitchells and we use Growsafe to measure feed efficiency."

In 2017, AACo's poll breeding program started.

The first major line of 150 poll bulls was delivered into AACo commercial herds last year.

"The Mitchells have been heavily selected on poll and currently all calves born in our breeding studs are polled, 60pc of them homozygous poll," Mr Harris said.

"I know there is an almost ideological opposition to poll in some circles but the potential benefits are undeniable.

"If we can maintain the other desirable traits while breeding out horns we have nothing to lose and everything to gain."

The transition to Wagyu, meanwhile, with its premium top-grade restaurant quality product, has enabled AACo to shift away from reliance on live cattle prices as the primary driver of financial performance.