LETTER: Over-government is killing our red meat facilities
Letter to the Editor
IN a sharp reminder of how tough the Australian red meat processing environment is at present, JBS Australia has confirmed it will close two of its flagship Australian red meat processing facilities, for different reasons.
The company’s Dinmore plant west of Brisbane – easily the largest beef processing facility in Australia, with normal daily operating capacity of 3400 head – will shut for at least a fortnight from Monday, August 24, as the processing industry continues to struggle to raise viable kills in the face of a drought-impacted livestock supply.
Further south, JBS will close its Brooklyn beef and sheep plant indefinitely.
Beef Central understands that Dinmore plant will operate for just two days next week – Tuesday and Friday being the last boning shifts – before the closure is enacted.
The company has provided no assurances that it will re-open Dinmore after the scheduled fortnight closure, however.
While the plant had a week-long maintenance shutdown in June due to the growing cattle supply crisis, the upcoming closure is the first extended mid-year closure at the site since 2014, when herd rebuilding was in full-flight and cattle became extremely scarce.
In a clear sign of the industry-wide struggle to secure slaughter cattle supply this year, Dinmore has been operating mostly under three-day weeks since May, delivering throughput at around 50pc of plant capacity.
As a high-throughput, low-margin business, it is well known that red meat processing becomes increasingly unprofitable, as throughput levels decline.
The company told Beef Central that it had been losing money at Dinmore ‘for a long time’ this year.
The closure would have a big impact on customers, it said, with some consignments inevitably delayed by the decision.
Rates of slaughter across eastern Australia have gradually deteriorated during 2020 since the March rain event, as supply has dried up after two years of drought, pushing stock prices sharply higher.
At the same time, cattle prices overseas have declined.
In this recent article, Beef Central pointed out that Australian slaughter cattle are now the most expensive in the world.
Don Stewart, Battery Hill.