THE Australian Meat Industry Council (AMIC) and Australian Meat Processor Corporation (AMPC) are in damage control today, appointing Ernst and Young to evaluate the feasibility of an industry-wide installation of the objective carcase measurement system DEXA.
It follows AMIC and AMPC being brought under spotlight following a leaking of a December 20 letter to Queensland Country Life in which AMIC chairman Lachie Hart refused to support the producers $150 million P150 project in its current form. The letter delivered a damning assessment of the ground breaking objective carcase measurement productivity driver and dismissed producer criticisms of the current subjective carcase measurement system.
Today’s delaying tactics are set against a backdrop of both AMPC and AMIC agreeing to the introduction of objective carcase measurement by 2020, as an stated in the Meat Industry Strategic Plan. The EY report is expected to be released in April.
However, the roll-out the MLA’s P150 project proposal is not mandatory and does not ultimately rely on the support of AMIC or AMPC. Rather the technology is being made available to individual companies.
Adding to the confusion is that JBS and Teys Australia, the nation’s two biggest beef processors with about 50 per cent of the kill, are well on the way to the full implementation of the Dual Energy X-ray Absorptiometry (DEXA) system.
Coles-supplier Australian Country Choice has also indicated its willingness to implement the technology. It is also understood other processing companies are forming a queue, willing and ready adopt the technology.
Interestingly, neither JBS or Teys are members of AMIC. However, both contribute compulsory levies to AMPC.
As part of the long running consultation process conducted by Meat and Livestock Australia, both AMIC and AMPC were previously advised to conduct an independent review to address concerns.
The embargoed media statement issued by AMIC and AMPC this morning says the EY review will provide analysis and recommendations on whether investment in DEXA is a prudent operational and commercial decision for processors.
The review would evaluate all strategic, technical, financial, commercial, operational, governance, and implementation aspects, it reads.
AMPC chairman Peter Noble said that AMPC had commissioned an independent review because it has a responsibility to its members to ensure that investments made on their behalf are thoroughly evaluated and deliver commercial benefits to the industry.
“Without adequate consultation, cost-benefit analysis or due diligence there can be no level of comfort in investing substantial industry funds in DEXA technology which is yet to be sufficiently proven,” he said.
“We take our obligation very seriously to provide members with a comprehensive fact-based approach to investment decisions to ensure their funds are spent in ways which will benefit them and the industry.”
AMIC chairman Lachie Hart said that a capital investment of this scale that was without appropriate governance, consultation and feasibility assessments could encumber an industry already facing unprecedented cost pressures related to regulation, utilities, livestock, and labour.
“Until our members can be confident that this technology will provide a more independent and accurate way to grade and price carcases, we risk undermining the integrity of the cattle pricing process,” Mr Hart said. “If we get it wrong, it would be a costly and backward step.”
“At this early stage of its development, it would not be prudent to unilaterally roll out DEXA technology across the whole of industry.”
Cattle Council of Australia is meeting in Canberra today but is still to announce if producers are willing to bankroll the roll-out of DEXA. The issue will be considered by Sheepmeat Council of Australia next week.
The story DEXA puts processor bodies in damage control | Videos first appeared on Queensland Country Life.