Processors won’t be pressured on DEXA

Processors won’t be pressured on DEXA


Commercial
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DEXA financing still up in the air.

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THE beef processing sector is clear it won’t be pressured into throwing money at any research and development project until it is convinced the benefits outweigh the costs.

The risks of jumping the gun are enormous, particularly where a social spend is also involved, according to the processing sector’s service provider the Australian Meat Processor Corporation (AMPC).

In response to a bold request from Meat and Livestock Australia to split the industry costs of installing cutting edge objective carcase measurement technology in all processing plants across the country, AMPC says it is still nutting out the merit of both the technology and the funding request.

MLA, and producer peak groups, are keen to see DEXA (Dual Energy X-Ray Absorptiometry) rolled out, given the potential million dollar benefits that are being touted.

MLA estimates a $150 million price tag on getting it in all abattoirs and has asked AMPC to chip in $37.5m, which it would match. Government dollar-for-dollar funding would make up the balance.

It’s an ambitious and unprecedented plan but many believe DEXA could be the great leap the beef industry is looking for to stay ahead of the game on a very competitive global stage.

AMPC’S chief executive officer Peter Rizzo said the plan had merit but those sort of funds were “a big deal for us”.

To put it in perspective, it equates to two to three times AMPC’s annual levy receipt and its average research and development (R&D) spend is around $10m.

Processor levies added up to a little under a third of producer levies, he pointed out.

So the questions as to whether DEXA was a worthy recipient of such hefty R&D funds when lined up against projects already in place, and new research waiting on the sidelines, had to be comprehensively addressed, according to Mr Rizzo.

When you’re spending taxpayer’s dollars, that was even more critical, he said.

DEXA was being misconstrued as a panacea for all things OCM, he said.

AMPC has invested more than $6m in developing OCM technology.

“OCM is actually a number of single and separate things and DEXA is just a step - a good one - along the way,” he said.

Having said that, there did seem to be upswing of DEXA support from the processor sector following the independent EY report which the processing sector commissioned, Mr Rizzo said.

The discussions now were tending towards answering “how do we change our current spend to accommodate this,” he said

Asked if there were any concerns the technology’s potential might be missed if the due diligence process takes too long, Mr Rizzo said: “If it’s a good idea, it’s a lasting idea.”

The industry as a whole would look pretty silly if it invested to this degree in something that was redundant in two years, he said.

​One thing that has emerged is that for processors taking on DEXA, the aim is efficiencies in their plants, with feedback to producers a secondary aspect.

“From the processor’s side, the direct interest is it might lead into automated boning activities, greater efficiencies and greater yielding opportunities,” Mr Rizzo said.

How that plays out for the wider industry goal of producing more valuable and ‘fit for purpose’ cattle is the big question.

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