Cattle delivery – a serious cost factor

The beef supply chain can't compete head on with the likes of chicken


Opinion
As land subdivision continues to break up farm size, smaller lines of stock will continue to be common, cementing the saleyard's place as an important selling venue.

As land subdivision continues to break up farm size, smaller lines of stock will continue to be common, cementing the saleyard's place as an important selling venue.

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The many hands that transact cattle on their way to the abattoir adds a lot of cost which our competitors have managed to avoid, writes John Carter.

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In the past few weeks I’ve questioned the efficiency of how we produce our beef, especially the 40 per cent of our annual kill that is feedlot finished (“Can Australia’s feedlots compete?”, The Land, February 1, p23).

However, feedlots are just part of a bigger supply chain challenge, including cost of transport and agent commission.

This is all on its way to our 31 abattoirs across NSW (which slaughter sheep and cattle). Meanwhile, chicken is sold direct to 35 abattoirs across the state.

In 1961, when the Meat Board’s Jack Shute delivered his address in Goulburn, there were saleyards in most small towns, with sale day being a social/shopping day event.

Some stock was still being driven to town on foot at a time when NSW had 463 abattoirs. Rail to centres like the Homebush saleyards and its abattoir complex was the major means of delivery. 

My 1983 Churchill Fellowship report commended the US sale barn (covered) system of weighing, immediate payment on sale day and water available to all cattle. The US system also provides hay and charges half our agent commission.

In 1986, when our NSW Meat Authority licensed saleyards, there were 125 saleyards (70 with scales). None were covered. Water in sale pens was unknown.

In Queensland, I had seen emaciated cattle in the Toowoomba yards, three days off water. Their post-sale rehydration meant a huge gain to processors.

I weigh here at home and expect about five per cent shrinkage after travel and rehydration.

One 1980s consignment to Homebush gave 10pc shrinkage. I rang the agent in anger. He investigated and found a pipe blockage had a row of pens with empty troughs. That cost me an extra $50 on each beast, which across 60 head meant $3000 in today’s money.

In the 1983 drought, I had cattle at Ebor. Auctioneer, Brian Darby, tried to sell the calves on weight (as had been customary in the US and UK for ages). It failed, and he quickly reverted to per head selling. We are still behind on that. 

In 2018, there is also no Local Land Services saleyard licencing of our 67 remaining saleyards (though we still pay the levy).

Contrary to academic thought, saleyards will remain a principal venue. Producers are guaranteed competition (a US survey gave a higher return than direct sale).

As land is continually subdivided, fewer will have the numbers to truck to the remaining “service kill” abattoirs, nor the numbers to offer large lines on our electronic auction systems. 

Without government regulation, we will fall further behind. In 2014 I re-drafted the US Packers and Stockyards Act of 1921 to Australian routines and gave it to the current federal government for implementation. They have done nothing.

Self-regulation rarely works, and when money is involved, it never works.

- John Carter

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