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OUTSPOKEN cattle producer advocates have welcomed the red meat processing sector’s moves to put their vulnerabilities on the table for discussion.
A report published by the Australian Meat Processing Corporation (AMPC) has identified six key strategic risks faced by the sector, based on extensive commissioned research and stakeholder surveys.
It lists international competition, changing consumer meat-eating patterns, a fragmented supply chain, a complex regulatory environment, the concept of a social licence to operate and climate change as being the major challenges processors are facing.
It’s a rarely-seen view through the eyes of those guiding the processing side.
Producer groups say the frank assessment is a sign the time has finally come when the whole industry starts to come together to find solutions.
Tasmanian beef producer David Byard, chief executive officer of the Australian Beef Association, said much of the distrust stemmed from producers having little or no confidence that the issues facing processors were real and were driving pricing decisions.
The perception was processors were “just scamming as much profit as possible from producers”, he said.
The report clearly shows that a ‘business as usual’ approach from here would be inadequate, he believes.
“A pre-emptive and unified approach that addresses the specific causes of the decline of red meat consumption is required, at a minimum, to slow down that trend,” he said.
Mr Byard said insufficient information sharing, as each component of the value chain worked independently, had been one of the big downfalls.
“Data gathered by one business is not necessarily shared along the supply chain to improve the overall productivity and effectiveness of the industry,” he said.
“For example, a large number of processors will collect valuable data on genetics, however will refrain from sharing within the value chain.
“The mistrust between those in the value chain is partly due to the concerns of large players.”
That lack of collaboration had increased the overall production costs.
The release of this report was a step away from that.
“Collaboration enables an industry to become more transparent along the value chain allowing fresh insight and understanding between components,” he said.
“The nature of relationships within the red meat chain, from the producer to processor down to the retailer, must become more transparent and more inclusive.
“As it is now, costs that are leveraged on the processors and retailers are simply sheeted back to be deducted off producer returns.
“If we can't have a unified approach the whole industry chain will suffer the consequences”.
Mr Byard did make the point, however, that “talk is cheap and actions will speak louder than words”, saying the hope now was AMPC, along with other sections of the industry, could drive co-operative action to make the industry sustainable by addressing the risks identified.