FROM the time US importers arrived in Australia looking for lean, boneless beef packed in cartons in the 1950s to the first shipment of chilled vacuum-packed primals to Japan, through the beef market crash of the 1970s and 30 years of ensuing rationalisation, the story of Australia’s red meat processing and export trade is filled with defining moments.
For Stephen Martyn, the man at the forefront of what has arguably been the most significant attempt to chronicle its social, economical and cultural impacts - the comprehensive book ‘World on a Plate - A History of Meat Processing in Australia’ - it is perhaps the most vibrant and entrepreneurial industry this country has seen.
Like no other supplier, Australian meat exporters have always accepted high levels of risk in venturing into new markets, identifying what the customer was looking for and then bringing that information back to the processor and producer in Australia, Mr Martyn says.
And it is the need to remain globally competitive in a high-cost environment that underpins the structure of the processing game today, he says.
Mr Martyn, who has close to 40 years experience in most facets of Australia’s export meat markets and is today the Australian Meat Industry Council national director processing, says the sensitive times currently facing the industry courtesy of senate inquiries and Australian Competition and Consumer Commission studies actually highlight just how long some of these factors have been at play as part of the industry.
Meat processing, he said, had always been a high volume, low margin business.
“William Angliss was Australia’s first major meat processor and helped to establish many of the production philosophies and principles that still exist today,” Mr Martyn said.
“In her memoirs, his wife Lady Jacobena Angliss recalled Angliss being impressed in his early days in the US in 1902 by the economies of scale of the major operators in Chicago such as Swift.
“He learned that the big US packing firms were content to make one per cent profit on their huge turnover and he applied the same principles to his business in Australia, one that remains just as current today.”
The conflict between producer and processor has been evident for 100 years. “Concentration of ownership in processing has always been associated with manipulation of prices in producer minds, perhaps understandably when they don’t sign the cheques for livestock, wages and freight,” Mr Martyn said.
“Ross River meatworks general manager Alan Parker was quoted in the 1980s as admitting that a failing of the processing sector was its inability to explain its costs and operational constraints that often forced operators to run well under capacity.
“It wasn’t about ripping off producers but rather that high production costs were often related to surplus production capacity which only operated for part of the year.
“Fearing collusion, producers wanted more meatworks but that road only led to inefficiency and under-utilisation.”
Here Comes the US
‘World on A Plate’ documents how in 1960 Australia exported around 20 per cent of its meat production and 40 years later that figure has tripled but comes from less than half the number of processing facilities.
That rationalisation, which saw more than 90 export plants close and most knocked down between 1980 and 2005, heralded significant changes in technology, industrial relations, shipping and transport, throughput and economies of scale.
But the story starts well earlier - the first big defining moment possibly being the emergence of the United States in the 1950s.
With rationing in Britain continuing post war and food shortages still serious, the famous ‘15-year meat agreement’ was put in place in 1952.
Under the arrangement, the United Kingdom would buy virtually unlimited quantities of frozen beef quarters, plus frozen lamb and mutton, with guaranteed minimum prices, according to ‘World on a Plate’.
It was heavy drought in the US, which depleted the US cattle herd in the 1950’s that brought US traders to Australia late that decade and ‘sent a mild electric shock through the industry with talk of lean boneless beef packed in cartons’.
It was a new proposition for Australia. accustomed to quarter beef to the UK, but the prices being discussed were considerably higher than the UK maximum.
Shipments to the US rose from 5000 tonnes to 200,000t in two or three years, Mr Martyn said.
“These Americans were looking for manufacturing beef to feed their expanding hamburger and hot dog businesses,” he said.
“They wanted beef boned out in cartons. It required the building of new boning rooms in Australia, both within abattoirs and independently.”
The other substantial change was that the United States Department of Agriculture required inspection systems equivalent with their own - that included a government veterinarian on site and new meat inspection procedures.
“It generated huge costs and logistical issues but meet those requirements they did and that change benefitted the whole industry, ” Mr Martyn said.
At the time, four big foreign owners were at play - Thomas Borthwick and Sons, the Vesty Group from the UK and the big US packers Swift and Wilson Meats.
State Governments also owned major meatworks - Cannon Hill in Queensland and Homebush in NSW were two of the more prominent - and a number of councils also owned works.
Numerous farmer co-operatives also had facilities along with innovative private Australian companies.
“Over the years of course the government has moved out of meat processing and all the farmer co-operatives went out of business apart from the Northern Co-operative Meat Company at Casino, which has remained a very viable and commercial operation, and is also unique in that is remains a US and EU approved service works,” Mr Martyn said.
Part two of our look at the history of meat processing in Australia tomorrow.