New Zealand farmers are starting to get a cut of the growing demand for high-priced Japanese delicacy Wagyu beef.

Farmer-owned collective First Light, the first New Zealand outfit to rear Wagyu-cross cows in New Zealand, has teamed up with the Livestock Improvement Corporation (LIC) to promote and grow the industry in this country.

Wagyu beef, which has become all the craze due to its desirable marbling and tenderness, traditionally comes from cows kept indoors and fed on grain.

However, the New Zealand outfit is focusing on grass-fed Wagyu, which it believes produces a similarly delectable steak.

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Some 20 years ago, First Light artificially inseminated New Zealand dairy cows with pure-bred Wagyu bull semen for the first time. With the product being 50 per cent Wagyu, it is allowed to be marketed as such.

"Our experience has shown that dairy breeds, including the Kiwi-cross cow, produces a high-quality, marbled beef when mated with First Light Wagyu sires," said First Light chief executive Gerard Hickey.

The collective now has some 18,000 animals.

"In target markets, the grass-fed consumer preference is for premium marbled beef product that is 100 per cent grass-fed, GMO and antibiotic free, and there is nothing better than Wagyu to achieve this," he said.

"Although consumer profiles and preferences differ across markets, grass-fed Wagyu is meeting a growing trend."

With the LIC on board, dairy farmers were able to get greater value out of their livestock because it allowed them to sell bobby calves that would otherwise be slaughtered when they were about 10 days old.

The LIC's biological systems general manager, Richard Spelman, said with the First Light partnership, farmers could artificially inseminate their worst-quality cows with Wagyu bull semen and their calves were on-sold to First Light and raised to maturity.

"This programme creates a win-win situation where non-replacement calves become a value product for farmers, generating income diversification from calf sales in early spring."

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Wagyu-cross cows were not used for dairy, he said. LIC had more than 10,000 dairy farmer customers to whom it could promote the Wagyu beef opportunity.

"With the Wagyu programme, farmers can simply extend their existing artificial breeding period to include First Light Wagyu," he said.

Spelman saw a "large opportunity" to add value to New Zealand's primary sector. "This is the first year that we've been working with dairy farmers with this product and we're confident that as long as the international market continues to grow there will be the opportunity for more farmers to be involved."

First Light, which is comprised of 46 farmer shareholders who raise the Wagyu-cross cows across the country, had "guaranteed buyers in markets around the world".

Spelman hoped that New Zealand-bred Wagyu beef would become more readily available in supermarkets and butcheries here.

Waikato farmer Sandra Kraakman, who supplied the partnership with 63 calves this autumn, said the programme had given her peace of mind.

"We started the programme as an alternative to bobby calves. They take heifers and bulls - every calf goes, and that's brilliant," she said.

"We were getting paid a pittance for bobby calves. Our labour and milk goes into these animals and in the end, we make no money. The Wagyu cross is a totally different scenario. It's a fairer representation of the work that goes into rearing the calf."

Wagyu beef can sell for upwards of $300/kg.