MEAT processors are often criticised for the prices they set, but the chief executive officer of Australia's largest family owned meat processing company says it is consumers at the retail level who determine what processors are willing to pay.
Thomas Foods International's Darren Thomas – keynote speaker at a recent Lucerne Australia 2015 Business Forum at Keith – told the forum that the industry was on the cusp of some buoyant times but he stressed that high meat prices had previously led to substitution of cheaper red meat cuts, or other proteins.
He also highlighted the company's journey over the past 30 years from a livestock trading entity to a "fully integrated food business" with an annual revenue of about $1.5 billion.
Across its four abattoirs it processes 7200 cattle and 131,000 small stock a week plus service kills through Casino, NSW.
It has 40,000 cattle on feed at Wanderribby feedlot at Meningie, Iranda feedlot at Tintinara, and Myola feedlot in northern NSW.
TFI (previously T&R Pastoral) distributes nationally through Holco, and a joint venture with United States-based Foodcom enables it to export to more than 80 countries.
Mr Thomas said the company had grown against the tide of mass abattoir rationalisation and a plummeting national sheep flock.
He attributed it to hard work and determination and more recently to becoming brand-focused including its retail brand Thomas Farms.
It has also increased its ability for retail-ready packaging in its abattoirs and is engaging directly with chefs and consumers.
Mr Thomas highlighted T&R Pastoral's humble beginnings in the mid 1980s with his father Chris and the late Bob Rowe, working out of an Acco Hut by the eastern ramp at the Gepps Cross saleyards.
"They were a couple of livestock traders – dealers that should never have got off the ground. They took a huge risk and it paid off," he said.
In 1999 they bought the Murray Bridge abattoir from Metro Meat owned by Chinese CITIC who exited the meat industry after making huge losses.
"When we took over Murray Bridge in 1999 there were 230 employees processing 3000 sheep and 300 cattle (a week)."
"Today it processes 11,000 small stock/day and 1200 cattle/day six days/week – it is a big plant with 1500 people on that site."
Murray Bridge was followed by the purchase of Lobethal in 2005, and Tamworth and Wallangarra in late 2009 from Country Fresh.
Mr Thomas said growth presented a significant challenge – supplying 131,000 cattle, sheep and goats/week for its four abattoirs.
But over-hooks selling in the past decade had become a significant part of its business and enabled it to form closer relationships with producer-suppliers.
"We never want to be the farmer," he said. "That's your job but we want to work closely with you," he told the forum.
Mr Thomas said meat processing was incredibly capital-intensive with TFI spending $300 million over 15 years to improve the efficiency and environmental sustainability of its plants. This included a recently completed state-of-the-art $30m beef boning room at Murray Bridge.
At its Tamworth, NSW, plant it was spending $25m to double the 6000-head/week processing capacity.