AUSTRALIA’S sheep meat industry is on the cusp of a processing revolution that will pave the way for a long overdue change in the way producers are paid for their livestock, Meat & Livestock Australia managing director Richard Norton said.
Mr Norton said more than 90 percent of Australia’s sheep meat processing capacity had now been costed for the installation of ‘DEXA’ (dual-energy x-ray absorptiometry) objective carcase measurement technology, with the tool already installed at JBS Brooklyn and Bordertown.
Mr Norton made the revelation around the progress of DEXA within the sheep meat sector to about 250 sheep producers and industry stakeholders at the Woolworths Lambition event at the Australian Sheep and Wool Show in Bendigo at the weekend.
The national initiative was first proposed by Mr Norton at MLA’s 2016 annual general meeting. It will pave the way for scientific measurement of saleable meat yield and a subsequent shift from the notoriously inaccurate price averaging system underpinned by P8 (beef) and GR (lamb) measurements currently used to pay producers, to a value-based marketing system, where producers are paid for the actual quantity and quality of meat produced from each animal, MLA said.
Other major economic benefits unlocked by DEXA include industry-wide productivity gains through beef and lamb processing automation, genetic improvement and data-based on-farm decision making.
“The benefits of the Australian sheep meat industry making a wholesale shift to the use of DEXA start with increased supply chain transparency,” Mr Norton said.
“Producers already have a tool for objectively measuring beef eating quality of the meat they’re producing via the MSA program; DEXA will provide an actual measure of the quantity of meat their animals are yielding, meaning they can make truly informed decisions on farm about the genetics they’re using, their feeding and husbandry practices.
“Independent agencies EY and Greenleaf have verified the whole of industry benefit of using DEXA to increase transparency of how carcases yield and perform, while the Australian Competition and Consumer Commission (ACCC) has also endorsed industry-wide adoption of the MLA initiative,” he said.
DEXA expected to add $270m-plus in value to red meat supply chains
“The reports found the use of DEXA and subsequent enabling of supply chains to meet market specifications more consistently could add in excess of $270 million per annum to the red meat industry.”
Mr Norton said a second tranche of economic benefits already being generated by the installation of DEXA systems has come from the accompanying use of more automation in meat processing plants.
“The precision of the DEXA measurement enables the introduction of automated processes that improve cutting accuracy, workplace health and safety, throughput efficiency and shelf life of the product.
“In plants where these systems are already installed, lamb automation enabled by DEXA has repeatedly demonstrated a return on investment within a year – and a return of up to $7 per head,” he said.
“As we’ve seen with the MSA eating quality system introduced by our industry 20 years ago, the more the industry adopts these objective measurement solutions, the larger the benefits and the faster they will be shared along the entire length of the Australian value chain.”
Mr Norton said with the initial costing of installing DEXA nation-wide completed, the numbers were now being independently verified, following which a total cost and funding model would be put to each of the industry’s peak councils and research and development funding bodies for decision.
It would be appreciated if MLA could be more specific on how the automation will reward producers for the livestock they supply to the abattoirs and when this new process will be adopted. Will sheep purchased by the processor at a saleyard for example receive a top up payment after they have been slaughtered?