VICTORIAN livestock producers have supported a move to borrow $150 million to implement objective carcase measurement for sheep, cattle and goats in all AUS-MEAT processing facilities across Australia.
Meat & Livestock Australia managing director Richard Norton told the MLA annual general meeting today the body would acquire a commercial loan on behalf of industry to finance the $150 million one-off cost of installing Dual Energy X-ray Absorptiometry (DEXA) technology in up to 90 AUS-MEAT registered slaughter facilities.
The peak sheep meat and cattle councils have yet to formally support the proposed initiative and loan proposal, but the Victorian Farmers Federation Livestock Group today threw its support behind the loan proposal to fund objective carcase measurements across Australia.
“We want to achieve a more mature supply chain and implementing objective carcass measurement is a big step forward in reaching that goal,” VFF Livestock president Leonard Vallance said.
“DEXA technology will provide a more efficient, cost effective solution to address the independence issue around carcass grading.”
The MLA move addresses a recommendations made by the Australian Competition and Consumer Commission in its interim report into competition in the beef industry. The ACCC’s Cattle and Beef Market Study interim report said there was a lack of transparency and consistency in the grading process undertaken to price carcases. It recommended that the industry, led by the processing sector, should allocate a high priority to the adoption of technology to enable objective carcase grading to be introduced as soon as possible. This will, of necessity, include the development of appropriate auditing and verification systems that instil confidence in the integrity of such systems, the commission said.
Mr Vallance said the new technology would lead to genetic and farm management decisions that would improve returns to the farm gate, as well as improve relationships across the supply chain.
“Objective carcass measurement will help increase trust between processors and producers and achieve farm production benefits with precise carcass feedback so that will improve returns to the farm gate.
“The industry strongly supports a move to objective carcass measurement because it will improve domestic and global competitiveness,” he said.
It is hoped that DEXA technology will begin in 2017, but no timeline has been released for completion of the project.
MLA said the initiative would pave 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. Longer term, the plan is also expected to reduce the industry’s annual multi-million cost of grading.
Mr Norton said MLA’s plan ensures that data collected from OCM will be available to all participants across the value chain.
“We’re now at a stage where our smallstock DEXA technology is ready for commercial deployment, while for beef our DEXA research and development is nearing completion and ready for commercial installation trials in early 2017.”
Mr Norton said the universal adoption of the technology would also contribute to maintaining the Australian red meat industry’s ability to compete in global markets.
“MLA’s plan will drive a shift from the current subjective grading of lamb and beef to a new system of livestock production and marketing where producers can be transparently rewarded against objective data and value measurements.
“On farm, that will stimulate further advances in genetics and livestock production systems,” he said.
“Within the processing plant, the technology will reduce wastage and workforce injuries and boost productivity through the use of accurate, objective measurement and automation.”
Mr Norton said MLA had received in-principal support from the deputy Prime Minister and Federal Minister for Agriculture, Barnaby Joyce, for the introduction of objective measurement across industry, and would continue to consult with the industry’s peak councils about how to best structure the one-off cost of its introduction.