A long-term shortfall in slaughter cattle supplies to Tasmania’s two major abattoirs has cast doubt on the viability of a proposed new King Island works.
The King Island Beef Producers Group invited the EAT Group, a Melbourne-based agribusiness firm, to set up the abattoir.
JBS operates a works at Longford, northern Tasmania, and southern chief operating officer Sam McConnell wished the EAT Group luck.
“Tasmania already has two strong processors, producing high quality products,” Mr McConnell said.
“Tasmania already imports 1200 trailers of processing cattle by ship each year, and if a third party believe they can capture adequate numbers for a viable processor then we are doing something very wrong.
“But still there are people who don’t believe, and they will quickly learn how costly it is to process beef in this country.”
Tribunal green light
Tasmania’s planning tribunal recently overruled an appeal against the $53.5 million project.
The Resources Management and Planning Appeal Tribunal ruled against appellant Raff Angus, which objected to the King Island Council and Environmental Protection Authority granting a planning permit.
But Mr McConnell said JBS would continue to support its producers.
“Anyone can do what they like if they have the money,” he said.
Page Transport managing director Geoff Page confirmed 48,000 head of cattle were being imported to Tasmania each year.
“I think there is a critical mass of a daily number of processing animals the abattoirs need,” Mr Page said.
He said between 35,000-40,000 head of cattle came off King Island each year, with about 30,000 going for direct processing.
Mr Page said building an abattoir on King Island would make it hard to convince shipping operators to invest in upgrades, as carting cattle was a substantial part of their businesses.
“In 18 months time, will there be anything coming off the island?” he said.
“We are very cognizant that part of our business may cease to exist.”
Greenham livestock manager Graeme Pretty said there was a big difference between getting approval for the abattoir and finding funding to build it.
“I think it’s quite obvious the processing capacity in Tasmania is sufficient for the needs of Tasmania,” Mr Pretty said.
“There are still a lot of cattle being imported into Tasmania to keep processing plants and the employees of the processors in work.
JBS cited tight lamb numbers for the temporary closure of its Longford sheep processing line last year.
While Beef Group chairman Richard Sutton declined to comment to Fairfax, others were supportive.
In its original prospectus, the EAT Group said it planned to sell 67 per cent of the business to outside investors, offering producers who signed up to supply it a share of a brand use licence fee.
Island producer Simon Vellekoop said he was in favour of the abattoir.
“I wouldn’t want it next to me, but we do need an abattoir,” Mr Vellekoop said.
Another advantage cited by island producers was a reduction in freight costs.
They believe the island abattoir could save between $95 and $118 a head, in sea freight, and a return to a King Island stand-alone regional premium brand.
Tim Roberts-Thomson said his TRT Pastoral Group operated its King Island properties as an Angus cattle breeding and finishing enterprise, with 15,000 head and more than 6000 breeders.
Mr Roberts-Thomson said he felt it would be a positive move for the island.
“We have enormous freight costs with the cattle sent to either Tasmania or the mainland, and this would be a good alternative,” Mr Roberts-Thomson said.
Any new processor would have to match prices offered in Tasmania or Victoria.
The properties currently supplied JBS, Greenham and the Tasmania Feedlot.
The EAT Group has been contacted for comment.