Producers support processing proposals

Primary Industries Minister Tim Whetstone said positive feedback from recent public consultation has encouraged the state government and Livestock SA to fund an independent feasibility study into meat processing options.

"The study will determine whether there is a clear path forward for small-scale meat processing on KI, saving local farmers thousands of dollars," he said.

Depending on animal size and distance to the processor, KI producers can pay up to $14 a head for sheep and up to $140/hd for cattle on freight.

Agriculture KI supports the idea of a small to moderate-sized facility that could handle multi-species and service kills.

The island once had a larger-scale abattoir, located near Kingscote, but it closed in the 1990s because of seasonal supply shortages.

AgKI chairman Rick Morris said a smaller facility would provide another marketing option for producers, to locally process and brand products for the tourism industry.

"Perhaps (it could start) processing in the order of 500-1000 sheep and 20 cattle per week, with the capacity to expand upon success," he said in AgKI's submission to PIRSA.

"While this will not be a 'game-changer' for KI producers, it would be a boost for the local tourism industry, who want to sell KI-branded products."

BDO EconSearch will conduct the feasibility study and release its findings later this month.

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The success of the KI consultation has prompted the government to also look into whether a new processing facility was of interest on the Fleurieu Peninsula.

It follows the development of the local Normanville abattoir coming to a standstill, with the new owners - Ternakan Kamran Exports - pushing for $6m in federal funding to complete the rebuild.

Member for Mayo Rebekha Sharkie, who recently met with TKE, said the company had already spent three years developing a "rebuilding" proposal for the site and "millions of dollars".

"TKE bought this facility in 2015 with the ambition of expanding its retail meat market in Malaysia by having its own abattoir in Australia, and yet four years down the track, this job-creating project is languishing for lack of modest government support to bring the abattoir up to Australian standards," she said.

The federal funding call comes as processor Thomas Foods International received $7m in federal budget funding for roadworks in the rebuild of its Murray Bridge facility.

Mr Whetstone said it was one thing to encourage local businesses to establish small-scale artisan meat processing on KI and the Fleurieu, "but it is a completely different proposition for an election candidate to suggest taxpayers should provide a $6m subsidy to a rich foreign business".

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If the Normanville upgrade went ahead, the site would only process sheep and goats, which left limited options for local beef producers.

With TFI remaining tightlipped about where and when it planned to reopen Murray Bridge, the ongoing uncertainty has left local producers concerned about the future of livestock production on the Fleurieu.

Inman Valley beef producer Beryl Price, who farms with husband Paul, is the chair of a local farmer group encouraging investigations into an alternative meatworks for the area.

"Since the closure of Normanville, farmers have felt restricted in where they can market their product," she said. "We want to remain viable farmers in this area, which means we need to start finding a premium for our product.

"But it has become harder these days, because of our limited options to process and then get our products into those markets.

"Instead, we have to sell into the mass market and just take the price that's available, that's our only option. It makes farming very difficult."

FLEURIEU beef producer Sandy Nott supports the idea of a new local abattoir, particularly one that could process cattle for export.

Mr Nott manages seven properties across the Fleurieu, running breeding and trading herds.

He said locally, cattle were either sold at markets or small amounts were processed at Strath Meats, but those options were not feasible for his bulk numbers.

"We used to sell our steers and heifers to TFI at Murray Bridge, which only cost $20/hd to transport and it had an export option," he said.

"But we still don't know when that will be rebuilt."

Mr Nott sends steers and heifers to Teys at Naracoorte, which costs $50/hd to transport, while the only cow processing option is in Wagga Wagga, NSW, costing $110/hd to freight.

Mr Nott said transporting cattle long distances also induced dark cutting meat, which attracted a penalty.

"It means our farmers are not getting paid for what they put in," he said.

Mr Nott said any new facility would need to be export standard to help producers attract a premium.

"Export market access would also reduce the seasonality of the industry," he said. "It is frustrating that we can't value-add to our beef at the moment. If we want to target export markets, we often have to look interstate to send our stock, which is not cost-effective.

"It's pretty reliable country here and close to Adelaide, so we could also target restaurants in Adelaide or even interstate. But without a local meatworks, we don't have that option."