THE tightening of livestock supply when widespread rain eventually arrives is expected to push processing plants into 'new territory' in terms of cost pressures.
The new chair of the processing sector's peak advocacy body the Australian Meat Industry Council, Gary Hardwick, says this is the challenge foremost on the mind of those running abattoirs at the moment.
"We just don't know where the numbers will come from next year," he said.
"A normal period of short supply typically means five to 10 per cent less but this time we're expecting far in excess of that, given the high level of female slaughter this year and the fact the national flock and herd are at record lows.
"As soon as we get good rain up and down the Eastern coast, farmers will want to stock up and will buy anything they can add weight to, which will put big pressure on the price processors have to pay for what little stock they can get."
Mr Hardwick is the founder of Hardwick Meatworks, at Kyneton in Victoria's central highlands district, now owned and run by his sons Luke and James. Mr Hardwick has been the processing industry for both the domestic and export markets for over 40 years. He is a qualified accountant and experienced chair who brings strong industry and financial acumen to the role.
He replaces the outgoing chair, Lachie Hart of Queensland's Stockyard Beef, who has served as AMIC chair since 2015, overseeing a period of change and modernisation for the organisation and industry.
Despite the looming supply issues, and underlying long-term challenges such as labour, regulation costs and energy, Mr Hardwick believes the red meat processing business in Australia has a strong future.
He points out sales last financial year exceeded $18b and the industry is a massive contributor to Australia's economy.
"Fundamentally, Australia has a great product," he said.
"Our farmers over the past 30 years have done an incredible job on improving breeding and feeding regimes and that has created a high quality, consistent product for export and domestic markets and placed us in an optimistic position."
The key to future success, however, would be for processors to remain at the forefront of innovation.
"At the end of the day, we have to keep looking at new ideas and becoming more efficient because we compete against countries with far cheaper labour, and whose inspections costs are paid by their government, among other advantages.
"Our challenge is to maintain our high food safety standards but find ways to cut down our costs."
Energy was an area the sector had made big leaps, Mr Hardwick said.
"Many processors have gone to alternative power supplies - we have 8000 solar panels here at our plant producing 70pc of our power," he said.
Joining Mr Hardwick on the new AMIC board is deputy chair Robert Constable, Trevor Hill, Roger Fletcher, Rodney Sellers, Noel Kelson, Franz Knoll, Greg Smith, Ray Kelos and Terry Nolan.
AMIC chief executive officer Patrick Hutchinson congratulated the new appointments, and thanked outgoing chair Lachie Hart for his leadership over the past four years.
"Our industry has never seen more change. Under the leadership of Mr Hart AMIC has been able to strengthen and amplify its voice for members, as well as establishing six clear priority areas around access to labour, animal welfare, market access, food regulation, small business management and energy efficiency," he said.
The Australian meat sector is worth about $30 billion per year to the Australian economy and between direct and indirect roles, is responsible for around 200,000 jobs.
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The story Processors stare down 'new territory' of tightening supply first appeared on Farm Online.