![Many beef processing plants have used the quiet time brought on by a lack of cattle supply to put in place upgrades. Many beef processing plants have used the quiet time brought on by a lack of cattle supply to put in place upgrades.](/images/transform/v1/crop/frm/38U3JBx5nNussShT8aZyYjc/ca87cb98-29a2-425d-b26d-befd34269adf.JPG/r653_520_5213_3947_w1200_h678_fmax.jpg)
WHILE 2016 may be remembered for some of the heftiest beef processing plant cutbacks ever as Australia’s great cattle shortage kicked in, ticking away in the background this year have been some very big steps forward for the sector.
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The move towards objective carcass measurement (OCM), the application of cutting-edge technologies and multi-million dollar plant upgrades, a strong focus on thinking strategically and big efforts to communicate more effectively have dominated the processing sector landscape.
The industry has been under intense scrutiny with senate inquiries, an Australian Competition and Consumer Commission market study and public meetings highlighting long-standing mistrust issues between producers and processors.
Arguably, the processing sector’s move to lay open its vulnerabilities has served to improve the understanding among other beef supply chain participants, and the general public, of the challenges, and value, of the business.
It’s an industry that contributes $23 billion to Australia’s gross domestic product per year and is, quite frankly, the backbone of many regional and rural communities.
Via it’s research, development and extension body the Australian Meat Processing Corporation (AMPC), the processing sector this year undertook extensive research to identify and prioritise six key material issues it needs to address in order to remain sustainable and profitable in the future.
They were: international competition, the regulatory environment, changing consumption patterns, value chain integration, social licence to operate and climate change.
AMPC chairman Peter Noble said being a trusted supplier of high-quality red meat meant Australian processors were well positioned to tap into the substantial global demand emerging but the “web of strategic risks” had to be mitigated.
Last month, the AMPC held an inaugural national sustainability conference called The Vital Ingredient which outlined many of the ways the sector was responding to those risks.
Meanwhile, Meat and Livestock Australia’s plan to acquire a commercial loan to finance the $150 million one-off cost of installing Dual Energy X-ray Absorptiometry (DEXA) technology in up to 90 slaughter facilities across the country, announced last month, has been hailed as revolutionary.
The initiative paves the way for scientific measurement of saleable meat yield, future value based marketing and industry-wide productivity gains through processing automation, genetic improvement and data-based on farm decision making.
And it will go a long way towards alleviating controversial independent grader issues.
Meanwhile, activity at plants is finally starting to crank up following month after month of slaughter shift cutbacks which saw some big abattoirs go as far as shutting down entirely for a week.
Slaughter numbers started to lift in November, finishing the month at 132,018 head for the Eastern States and there were announcements of more shifts and jobs.
It was welcome relief, given that in July, MLA reported processors accounted for the lowest proportion of Eastern Young Cattle Indicator (EYCI) purchases in more than six years.
Processors usually account for 29 per cent of the July EYCI purchases (five-year average), but during July 2016, they collectively only bought 15 per cent.
MLA’s head of market information Ben Thomas said Eastern states slaughter went from one unprecedented level to another.
“In 2015, on average we were killing just over 160,000 head per week, which was well above any sustained historical average,” he said.
“Then came the abrupt drop in cattle coming forward for slaughter and numbers edged below 120,000 for the first time since 2006.”
Next year, and into the early parts of 2018, expectations are the rolling average will hold below 120,000 per week.
“It may take until 2020 for weekly kill rates to return to what is considered normal,” Mr Thomas said.
While slaughter, particular female, is down significantly year-on-year, production has decreased to a lesser extent.
Higher carcase weights have gone some way to offsetting the fall in cattle supply, Mr Thomas said.