Cost/Benefit Modelling of LDL Program

Summary

The Livestock Data Link (LDL) project has been reviewed by a number of stakeholders through the supply chain. All of these have stated that a cost/benefit analysis on the development of a program such as LDL is essential in ensuring approval and success A number of projects have been undertaken to analysis the costs and benefits of the Livestock Data Link Program for the Australian beef and sheep livestock industries. The outcomes from these projects were used to further assess the net benefits that LDL could potentially deliver to the Australian beef and sheep industries.
One of the projects undertaken assessed the capacity of the Livestock Data Link (LDL) program to provide commercial benefits to the Australian beef and sheep livestock industries. This project encompassed six core components, aimed at assessing the benefits that LDL could potentially deliver to the Australian red meat livestock industries, and to the red meat processing sector. This analysis was used to support the assessment of a business case for further investment into the development and roll-out of the LDL program. Another project independently reviewed the LDL program and undertook a cost/benefit analysis on the development of the program. The LDL cost/benefit analysis included the following:
Developed a costing model that captures the value benefit for each of the various sectors of the industry.
Accessed data available from existing industry studies, conduct higher level liaison with the two processors involved in the pilot project, liaise with UNE and MLA to obtain other pertinent data that will be required to populate the model.
Provided a cost/benefit, based on the available data that quantifies the benefits of LDL feedback information to each section of the supply chain.
A final return on investment should be calculated for the LDL system and where possible, quantify the impact the system will have on relevant MLA Programs.
Another project assisted individual plants piloting LDL, and industry, to assess the technical, operational, and commercial costs and benefits of Livestock Data Link. This project included the beef and sheepmeat industries, and the processor, feedlot and producer sectors of the supply chain. This project encompassed five core components, aimed at collecting and analysing the operational experience of the LDL pilots, complemented by targeted additional research and analysis.