A DEBATE surrounding a new saleable-meat yield pricing structure for the sheep industry has the saleyard system in its firing line.
As Meat and Livestock Australia anticipate a roll-out of DEXA Technology (Dual Energy X-ray Absorptiometry) to AusMeat-approved meatworks across the country, at a cost of $150 million, Sheepmeat Council of Australia (SCA) is exploring an Australian sheepmeat yield indicator.
SCA board member Michael Craig, “Tuloona”, Harrow, Vic, said the impact of industry wide adoption of DEXA would put pressure on the archaic saleyard system as a pricing benchmark.
“It’s imperative our transaction and pricing reflect processing efficiency and measureable eating quality attributes, which saleyards struggle to do,” Mr Craig said.
It is pursuing a price discovery mechanism based on Hot Standard Carcase Weight, Lean Meat Yield and Eating Quality metrics of a Meat Standards Australia score, claiming the current market was “a production-led chain, not a consumer-driven chain”.
“Animal variation, combined with speculative pricing and a history of distrust between producers and processors has seen the evolution of the saleyard system as the dominant way animals are transacted and prices established,” he said.
“It has worked well to provide processors with supply and a simple method for producers to ensure maximum perceived competition – is this the best long-term for creating a quality focused industry?”
Mr Craig, who has rcompleted a Nuffield Scholarship into Australia’s sheepmeat industry with a report, “Commodity or Premium Product?”, said the current system failed to provide transparent price signals to incentivise value adding.
While saleyards are the cornerstone of livestock marketing, illustrated by the Eastern States Trade Lamb Indicator based on reported saleyard prices, they fail to accurately price products.
“Saleyards average animals on guestimates of live weight, fat cover and dressing percentage,” Mr Craig said. “They increase biosecurity and welfare risks, while damaging the product through unnecessary stress.”
“There are unnecessary costs of transacting product at saleyards compared to going direct to processors, yet 60pc of finished product is transacted through saleyards, which directly filters into over-the-hook prices.”
He called for an independent, virtual measurement system to secure supply of animals direct from farm.
“It raises a raft of other issues such as mandatory price reporting and the need to speed up objective carcase measurements around quality of our lamb,” he said.