After two decades of investment in high-value, Japanese Wagyu cattle, Australian producers are starting to reap the rewards.

"I guess 10 years ago, a full-blood Wagyu carcass might have been worth $3,000 to $4,000, now it could be worth $6,000 to $8,000," said Scott de Bruin who runs one of the largest full-blood herds in the country at Mayura Station in South Australia's southeast.

Wagyu covers several breeds of Japanese cattle.

When production started here in the 1990s, many thought it would go the way of other fads that were around then, like the failed ostrich industry.

But Australia now has the biggest herd of Wagyu, outside of Japan.

And the company that owns about half the animals says the returns are worth the high costs.

"It's one of our more profitable streams. It's one of the front-runners." said Greg Gibbons from AACo which has more than 40,000 full-blood and crossbred Wagyu on grain in its feedlots.

There is room to build on those returns if Japanese prices are anything to go by.

Mr de Bruin, who is also the president of the Australian Wagyu Association's council, says carcasses in Japan fetch anything from $15,000 to $30,000.

"They've been producing Wagyu for a long time. It's very much a luxury item," he said.

"In Australia, it's still in its infancy stages and still developing its international recognition."

But the industry says major developments in animal breeding is helping propel locally produced Wagyu onto the world stage.

Breeding better beef bloodlines

Australia's Wagyu herd was founded on live animals and genetic material imported from Japan in the '90s.

Top Australian restaurants sell Victorian producer David Blackmore's Wagyu beef for up to $1,060 a kilogram. ( ABC: Kerry Staight )

The bloodlines came from top animals and a range of Wagyu breeds.

High-profile Victorian producer David Blackmore was among the industry pioneers to start crossing them.

"You've got all these different strains that weren't being crossed in Japan because the prefectures protected their own breeds and their own bloodlines," he said.

"I never had that restriction on me."

"Probably in the last 10 years they do this in Japan now, but you know we started doing it from day one."

He now supplies his full-blood Wagyu to some of the country's top restaurants, like Nobu in Melbourne, where it sells for $1,060 a kilogram.

While the meat is the main part of the business, he is also among the local breeders who export Wagyu genetics.

Embryos from his cows sell for $1,000, and he averages 10 per cow.

He says this part of his business has come to the attention of the Japanese media, because Japan has stopped exporting its own Wagyu genetics.

"They're talking about what we're doing with Wagyu around the world," he said.

"They're saying that Japanese farmers are missing out by not allowing anymore genetics out."

Wagyu cattle are fed grain at the Mayura Station feedlot in South Australia. ( Kerry Staight )

Innovating the industry's breeding values

With no fresh genetics coming into Australia, the industry says producers now need to focus on finding new blood in its own backyard.

"People have kept on dipping into the same pool cause we can't get anymore genetics out of Japan," said Dr Rob Banks who runs Australia's Animal Genetics And Breeding Unit.

"Basically that means we're not making genetic progress if we just keep using the same animals."

Dr Banks is leading an industry project that will help producers find better-performing animals.

New breeding values for traits that relate to eating quality like marbling are being developed for 10,000 cattle.

Wagyu is renowned for its characteristic marbling quality, which is linked to the beef's eating quality. ( ABC: Kerry Staight )

Until now most of the industry's animal breeding values have been based on ultrasound scans of live animals.

But the new set of breeding values is based on data collected from carcasses.

And when it comes to marbling, which is the characteristic Wagyu is renowned for, Dr Banks says carcass data is five times more accurate.

"What we're doing here is probably going to take us beyond what they're doing in Japan," he said.

And he believes if they are used properly, the new selection tools could take Australia's Wagyu meat to the next level.

"There's no reason we couldn't have the best Wagyu in the world."