To me the red meat industry is like a shiny mudguard which has been polished and looks fantastic but once the paintwork is scratched it is very rusty underneath. Lately we have had glimpses of just how rusty the whole thing really is.
After publicity on why processors retain the ownership of by-products, processors were quick to tell producers that the value of by-products is built-in to the price that producers receive for carcass beef.
From that point of view I was not surprised about the processors comments; however what I found more concerning were comments attributed to CCA. They agreed that the price producers receive for over the hooks trading is built-in to the final price.
Obviously CCA are aware of the mathematical equation used by processors to come up with a price for by-products. As producers peak Council, perhaps CCA should explain to producers of how the equation actually works.
The Australian Meat Industry Council also said “all revenue streams were considered when purchasing livestock including meat hide and by-products when processors offer a price”.
From CCA’s point of view they state there is a vast difference in US grading and percentage returns from a live animal to a carcass. Something like 52% in Australia and 62% in the US, then we are told that in the US things like skirt, channel fat, kidney fat, kidneys and other trim are not taken out as a carcass before scales. Why? Could it be possible that a committee of AusMeats (Language & Standards Committee) make the rules for trim, offal and any by-products? And this committee is dominated by 4 processors, 1 feedlotter (who could be an employee of a processor), 1 sheep producer and 1 beef producer are some of the members. Democratic? What do you think?
CCA agree that there has been in decline in dressing percentage in the past five years, it seems there were distinct reasons. Most plants are now Halal accredited, which created the need for more trim. Surely if more trim is required it should be agreed to by the producer selling his cattle. To me it is quite possible that Whizzer knives have a lot to do with the extra trim before scales.
It appears the answer is technology development which some believe is very close to being a reality. The fact is there have been many reviews on opportunities to identify carcass meat traits. The beef grading system has been evolving over the last 30 years as a means of classifying carcasses.
If we adopt new technology, it could be a quantum leap. However, there could be problems. For a start, could a single machine keep up with a fast moving kill chain or will we need multiple machines to keep up? The questions keep on coming; however I suspect that the technology is going to be very expensive for not only the machines but the reconfiguration of the kill floor.
Whilst this debate is being had ABA has been asking why we have company graders doing all the grading in processing plants. It should be remembered that these people are employees of the individual processing plants and as such cannot be regarded as a true independent umpire.
Red Meat Advisory Council CEO, Ross Keane, says “it is great if producers want independent graders in the processing centres it could be viable (but they will have to pay)”. Could it be possible that the cost of a company grader is also built in the price that producers receive for carcass beef?
Perhaps the time has come for everybody to sit down and cost the whole process in an honest and open fashion, so we can really see who pays for what, which and how.
If I’m correct the producer is already paying and I feel certain that if independent graders were employed it would not cost producers any more. The simple fact is that we would not have another wage coming out; the only thing to change was that the grader would be become independent and answer to an independent employer. I feel most producers would like the idea of independent graders and even CCA admit that there should be independent graders.
AMIC are quoted as saying better communication between all sectors of the supply chain is important, who could disagree. It seems to me processors hold the cards and it would be very nice if they were to lay their cards on the table and communicate with producers.