'We told you so!' Drought starts to bite red meat sector

Governments in firing line as 'drought' hits red meat sector

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LIVESTOCK DROUGHT: The meat processing sector is likely to feel the pain of a livestock drought in the coming weeks and months.

LIVESTOCK DROUGHT: The meat processing sector is likely to feel the pain of a livestock drought in the coming weeks and months.

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Governments have been accused of sitting on their hands and doing nothing to help meat processing sector through a livestock "drought"

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The Federal Government has been accused of doing nothing to help the red meat processing sector as it prepares to weather the impact of a serious livestock "drought".

Lamb, mutton and beef cattle prices are on an upward march as the industry confronts the perfect storm of drought-depleted flock and herd numbers and recent widespread rain which has sent restockers on a saleyards rampage.

The National Restocker Lamb Indicator has jumped 92 cents in the past week to 982c a kilogram carcase weight while the National Trade Lamb Indicator has climbed 88c to 909c.

CEO of the Australian Meat Industry Council (AMIC), Patrick Hutchinson, said the drought was now shifting further down the supply chain to meat processors, something he said he,and others in the industry, had been warning about for the past 18 months.

AMIC represents processors, smallgoods manufacturers and retail butchers.

"I've been on record many times in the past 18 months saying very clearly to industry, to community and, most importantly, to government that our industry's drought is coming," he said.

"We are now here and we feel like we haven't been heard."

NOT LISTENING: Patrick Hutchinson, CEO of the Australian Meat Industry Council, said governments hadn't been listening to warnings about the impacts of a livestock "drought" on the meat processing sector.

NOT LISTENING: Patrick Hutchinson, CEO of the Australian Meat Industry Council, said governments hadn't been listening to warnings about the impacts of a livestock "drought" on the meat processing sector.

Mr Hutchinson said AMIC had been saying the meat processing sector, the biggest regional employer, was the largest trade-exposed manufacturing industry in Australia.

And unlike Holden, billions hadn't been pumped into the sector by taxpayers yet the meat processing sector had survived.

Mr Hutchinson said AMIC had repeatedly urged governments to have plans in place to assist the red meat sector which underpins the livestock supply chain for farmers.

"Yet we have not heard anything," he said.

Mr Hutchinson said $8 billion in drought aid had flowed past the red meat processing sector to the producers of the raw product (farmers).

He said while his members recognised farmers were as important as them in the supply chain there had been an apparent blindness among decision-makers that livestock producers should be the only ones to get drought assistance.

Processors were now grappling with managing the worsening livestock "drought" which potentially could force cutbacks in shifts or even closures yet they had no idea if governments had any plans to ease their pain.

COST KILLER: Chris Cummins, managing director of Breakout River Meats, Cowra, says high energy costs are a killer in the meat processing sector.

COST KILLER: Chris Cummins, managing director of Breakout River Meats, Cowra, says high energy costs are a killer in the meat processing sector.

Mr Hutchinson said red meat industry businesses were not expecting government bailouts but relief from payroll taxes (state government) or export fees and charges which cost the industry more than $100 million a year would help.

"There are many things that can be implemented that can ensure that those who are strong and viable and make their own investments in their own business can continue to do so.

"Essentially most of the people who work for our regional manufacturers are conservative voters.

"If the Nationals, for example, say 'we are for the coal miners', they are not for coal mining companies but the coal mining employees.

"Where are they for other manufacturing industries (in the bush)?" Mr Hutchinson said.

Chris Cummins, managing director for Breakout River Meats at Cowra, NSW, said governments had done nothing to address crippling energy costs in the meat processing sector.

Breakout River Meats supplies lamb, beef and pork into the domestic market.

"We've got the highest energy costs in the world," he said.

Mr Cummins said livestock supply had tightened in the past two or three weeks following welcome rain.

He said the Australian economy had become heavily reliant on China buying "our rocks, coal and meat".

He said China's economy had slowed along with the global economy which had him deeply concerned.

The story 'We told you so!' Drought starts to bite red meat sector first appeared on Farm Online.

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